’Israel’s’ Tax Policies Suffocate Palestinian al-Quds Citizens

Electronic Intifada - Jillian Kestler-D'Amours

High taxes have contributed to the closing of Palestinian businesses in al-Quds' Old City

Thick locks hug the front gates of shuttered shops, now covered in graffiti and dust from lack of use. Only a handful of customers pass along the dimly-lit road, sometimes stopping to check the ripeness of fruits and vegetables, or to order meat in near-empty butcher shops.

"All the shops are closed. I'm the only one open. This used to be the best place," said 64-year-old Mustafa Sunocret, selling vegetables out of a small storefront in the marketplace near his family's home in the Muslim quarter of al-Quds' (Jerusalem) Old City.

Amid the brightly-colored scarves, clothes and carpets, ceramic pottery and religious souvenirs filling the shops, Palestinian merchants are struggling to keep their businesses alive.

Faced with worsening health problems, Sunocret said that he cannot work outside of the Old City, even as the cost of maintaining his shop, with high electricity, water and municipal tax bills to pay, weighs on him.

"No other work"

"I only have this shop," he said. "There is no other work. I'm tired."

Abed Ajloni, the owner of an antiques shop in the Old City, owes the al-Quds municipality 250,000 shekels ($68,300) in taxes. He said that almost every day, the city's tax collectors come into the Old City, accompanied by "Israeli" police and soldiers, to pressure people there to pay.

"It feels like they're coming again to occupy the city, with the soldiers and police," Ajloni, who has owned the same shop for 35 years, said. "But where can I go? What can I do? All my life I was in this place."

He added, "Does al-Quds belong to us, or to someone else? Who's responsible for al-Quds? Who?"

"Israel" occupied East al-Quds, including the old city, in 1967. In July 1980, it passed a law stating that "al-Quds, complete and united, is the capital of "Israel"." But "Israel's" annexation of East al-Quds and subsequent application of "Israeli" laws over the entire city remain unrecognized by other countries.

Under international law, East al-Quds is considered occupied territory - along with the West Bank, Gaza Strip and Syrian Golan Heights - and Palestinian residents of the city are protected under the Fourth Geneva Convention.

Isolation

Al-Quds has historically been the economic, political and cultural center of life for the entire Palestinian population. But after decades languishing under destructive "Israeli" policies meant to isolate the city from the rest of the West Bank and a lack of municipal services and investment, East al-Quds has slipped into a state of poverty and neglect.

"After some 45 years of occupation, Arab al-Quds residents suffer from political and cultural schizophrenia, simultaneously connected with and isolated from their two hinterlands: Ramallah and the West Bank to their east, West Al-Quds and "Israel" to the west," the International Crisis Group recently stated ("Extreme makeover (II)," 20 December 2012 [PDF]).

"Israeli" restrictions on planning and building, home demolitions, lack of investment in education and jobs, construction of a massive wall around Palestinian neighborhoods and the creation of a permit system to enter Al-Quds have all contributed to the city's isolation.

Formal Palestinian political groups have also been banned from the city, and between 2001-2009, "Israel" closed an estimated 26 organizations, including the former Palestine Liberation Organization headquarters in al-Quds, the Orient House, and the al-Quds Chamber of Commerce.

Higher prices

"Israel's" policies have also led to higher prices for basic goods and services and forced many Palestinian business owners to close shop and move to Ramallah or other Palestinian neighborhoods on the other side of the wall. Many Palestinian Al-Quds citizens also prefer to do their shopping in the West Bank, or in West al-Quds, where prices are lower.

While Palestinians constitute 39 percent of the city's population today, almost 80 percent of East al-Quds residents, including 85 percent of children, live below the poverty line.

"How could you develop [an] economy if you don't control your resources? How could you develop [an] economy if you don't have any control of your borders?" said Zakaria Odeh, director of the Civic Coalition for Palestinian Rights in al-Quds, of "this kind of fragmentation, checkpoints, closure."

"Without freedom of movement of goods and human beings, how could you develop an economy?" he asked.

"You can't talk about independent economy in Al-Quds or the West Bank or in all of Palestine without a political solution. We don't have a Palestinian economy; we have economic activities. That's all we have," Odeh said.

"Israel's" wall in the West Bank, according to a new report by the United Nations Conference on Trade and Development, has caused a direct loss of more than $1 billion to Palestinians in Al-Quds, and continues to incur $200 million per year in lost opportunities ("The Palestinian economy in East Al-Quds," 9 May [PDF]).

"Israel's" severing and control over the Al-Quds-Jericho road - the historical trade route that connected Al-Quds to the rest of the West Bank and Middle East - has also contributed to the city's economic downturn.

Before the first intifada began in the late 1980s, East Al-Quds contributed approximately 14 to 15 percent of the gross domestic product in the West Bank and Gaza. By 2000, that number had dropped to less than eight percent; in 2010, the East Al-Quds economy, compared to the rest of the West Bank and Gaza, was estimated at only seven percent.

"Economic separation resulted in the contraction in the relative size of the East Al-Quds economy, its detachment from the remaining OPT [occupied Palestinian territory - the West Bank and Gaza Strip] and the gradual redirection of East Al-Quds employment towards the "Israeli" labor market," the UN report found.

Decades ago, "Israel" adopted a policy to maintain a so-called "demographic balance" in Al-Quds and attempt to limit Palestinian residents of the city to 26.5 percent or less of the total population.

To maintain this composition, "Israel" built numerous Jewish-only settlements inside and in a ring around Al-Quds and changed the municipal boundaries to encompass Jewish neighbourhoods while excluding Palestinian ones.

It is now estimated that 90,000 Palestinians holding Al-Quds residency rights live on the other side of "Israel's" wall and must cross through "Israeli" checkpoints in order to reach Al-Quds for school, medical treatment, work, and other services ("East Al-Quds - by the numbers," Association for Civil Rights in "Israel", 7 May).

""Israel" is using all kinds of tools to push the Palestinians to leave; sometimes they are visible, and sometimes invisible tools," explained Ziad al-Hammouri, director of the Al-Quds Center for Social and Economic Rights.

Al-Hammouri said that at least 25 percent of the 1,000 Palestinian shops in the Old City were closed in recent years as a result of high municipal taxes and a lack of customers. "Taxation is an invisible tool ... as dangerous as revoking ID cards and demolishing houses," he said. ""Israel" will use this as pressure and as a tool in the future to confiscate these shops and properties."