Boycott Israel Movement Stunts The Palestinian Economy: Carrie Sheffield ****
Carrie Sheffield is a Warren T. Brookes Journalism Fellow for the Competitive Enterprise Institute and a former researcher for American Enterprise Institute scholar Edward Conard. She is author of editorials for The Washington Times, covered Congress for POLITICO and The Hill.
A push to “boycott, divest and sanction” (BDS) Israeli companies has limited impact on the credit profile of Israel, yet it directly harms its intended beneficiaries, the Palestinians. The BDS movement, including universities, pension funds and leaders of some Christian denominations (to the chagrin of many congregants), ignores economic data. And it coincides with a disturbing rise of violent anti-Semitism across Europe.
“The impact of BDS is more psychological than real so far and has had no discernible impact on Israeli trade or the broader economy,” Kristin Lindow, senior vice president at Moody’s Investors Service and Moody’s lead analyst for Israel (in full disclosure, a former Moody’s colleague) told Forbes. “That said, the sanctions do run the risk of hurting the Palestinian economy, which is much smaller and poorer than that of Israel, as seen in the case of SodaStream.”
While the broader Israeli economy is presently shielded from BDS, one victim is SodaStream, an Israeli company manufacturing DIY soda that shuttered a West Bank factory and moved it to southern Israel. This cut hundreds of jobs for Palestinians that reportedly paid between three and five times the local prevailing wage.
SodaStream’s CEO Daniel Birnbaum denied the move was BDS-related, though its profits plunged after BDS activists locked the fizzy pop maker in its crosshairs.
“It has nothing to do with politics; we’re relocating to a modern facility that is three times the size,” Birnbaum told The Independent. “But if it was up to me, I would have stayed. We showed the world Arabs and Jews can work together.”
The numbers speak for themselves: Israel (population 8.3 million) has GDP of $291 billion, the Palestinian Territories (population 4.1 million), $11.3 billion. In 2012, Israeli sales to the Palestinian Authority were $4.3 billion, about 5% of Israeli exports (excluding diamonds) less than 2% of Israeli GDP, according to the Bank of Israel. In 2012, Palestinian sales to Israel accounted for about 81% of Palestinian exports and less than a percentage point of Israeli GDP. Palestinian purchases from Israel were two-thirds of total Palestinian imports (or 27% of Palestinian GDP).
Such trade flow asymmetry shows Palestine needs Israel, economically speaking. Yet the BDS crowd would impair economic ties between these areas, despite evidence that trade between peoples lessens outbreak of war. BDS-ers want to obliterate the vast trade surplus Israel extends to Palestine and offer nothing in its place.
Source: Bank of Israel, 2014
It’s easy to cast digital stones from the comfort of a California dorm room or a posh British mansion. It’s difficult to gainfully employ some 110,000 Palestinians as Israel does, or build 16 industrial parks in the West Bank and East Jerusalem hosting 1,000 facilities where Jews and Arabs work shoulder-to-shoulder.
Despite overheated BDS rhetoric about exploitation, last year the Palestinian Authority’s official newspaper hailed working conditions for Palestinians employed by Israelis in West Bank settlements. It also scolded Palestinians hiring other Palestinians for low wages with no benefits.
We typecast librarians and mainline Protestants as mild-mannered pleasers, yet The American Library Association, along with the United Church of Christ and the Episcopal Church, have considered BDS in this misguided Holy War against Israel. Throw in White House and congressional Democrats who, against the will of most Americans, might snub Israeli Prime Minister Benjamin Netanyahu during his U.S. visit next month. And a nuclear Iran, a regime vowing ethnic cleansing against Jews, grows more likely each day as Secretary of State John Kerry dithers.
Through all this, Israel grows increasingly vulnerable, even as it continues to economically bolster Palestine. The BDS movement inflames rather than enlightens global dialogue around the peace process. Israel invests heavily in Palestine; the rest of the world doesn’t bother.
One bright spot is leadership in Congress from Peter Roskam (R-IL) and Juan Vargas (D-CA), who just introduced The Israel Trade and Commercial Enhancement Act. It would require U.S. negotiators to discourage Israeli BDS within countries seeking U.S. trade agreements. This would apply, for example, to a deal currently under negotiation with the European Union, where anti-Semitism and BDS are growing. This bill makes moral and economic sense; it would protect the shared prosperity of both Palestine and Israel.
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