Steps to a two state solution: For Israel, for Palestine, for peace

Step Thirty: Allocate territory in Area C for Palestinian economic development

In Step 22, we proposed to expand the Palestinian autonomous zones of the West Bank (Areas A and B, in which more than 90 percent of the Palestinian population lives) by the phased transfer of some 617 sq km of Israeli-controlled Area C. We also advocated the issuing of more building permits to Palestinian residents of Area C and there has been positive movement on this front with Israel approving six Palestinian housing projects in July.

But wider action should be taken to improve the economic prospects of West Bank Palestinians. While the Palestinian economy is beginning to recover from the impact of the pandemic, there also needs to be a major drive to boost jobs and growth in the West Bank, where the unemployment rate is just below 14 percent. 

In line with plans drawn up by Israel’s Institute for National Security Studies (INSS), up to one-quarter of Area C should be designated for Palestinian infrastructure and economic projects. Utilising capital provided by the proposed new International Development Bank of Palestine (which, as set out in Step 25, would be potentially modelled on the European Bank for Reconstruction and Development), there should be a focus on investment in establishing industrial and green energy enterprises, tourism and hi-tech ventures, residential construction, and other projects. The INSS plan envisages that, at the initial stage, Israel would not transfer security and planning powers to the Palestinian Authority in these Area C development regions. But these powers would be “ready and waiting” and gradually shifted to the PA if it cooperates with the development.

Further Reading:

A Strategic Framework for the Israeli-Palestinian Arena