In addition to examining the costs of internal trade in the territory, the report focuses on the restrictions on exports. It finds that exporting through Israel is becoming more difficult and that the current alternative through Jordan is severely limited. For Palestinian exporters to effectively compete on the international market they must be allowed to use modern door-to-door logistical systems. Such systems are in use at sensitive security borders worldwide but must be adapted to meet Israel’s legitimate security concerns.
Noting that the Separation Barrier between the West Bank and Israel will soon be completed and sealed, the authors analyze the new system of commercial crossings, through which all Palestinian trade to and through Israel will now be channeled. These are very limited in number and will be based on the inefficient back-to-back transfer arrangement. Though the GOI has stated that it will ensure that the crossings will not become a bottleneck to Palestinian trade, it is very likely that any system of back-to-back loading will add to transit times and increase costs.
The authors note that an improved international trade route through Jordan would make the West Bank economy much more competitive for exports, particularly to the Arab Gulf. A significant first step would be the opening of the Allenby Bridge to container use.
“The Palestinian economy has the potential for dramatic growth, even in the midst of the current global recession,” said David Craig, World Bank Country Director for the West Bank and Gaza. “This can only be achieved by the private sector through export oriented growth. The new restrictions described in this report undermine this goal."
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