Agricultural Decline
Agriculture is key to Gaza's economy but has been in relative decline since the middle of the 1970s.105 The percentage of the total workforce employed in agriculture dropped from 31.8 in 1968 to 18.3 in 1988. Between 1981 and 1991, per capita agricultural GDP dropped from approximately $5,235 to $4,330.106 When considered by themselves, these figures could be interpreted as signs of economic growth: the decline of agriculture relative to other sectors of the economy, such as industry and services, is often a hallmark of a developing economy. However, in the case of Gaza, other economic sectors grew too slowly to absorb any significant percentage of labor moving out of agriculture. The overall result of agricultural decline in Gaza has not been economic development, but rather increased poverty and economic dependence on Israel.
Agricultural decline in Gaza is in part a result of water scarcity. Discriminatory allocation policies and the contraction and degradation of the water supply interact to produce significant reductions in crop yields. During the occupation, Israeli policy not only limited Palestinian water consumption for agriculture, but also restricted the cultivation of water-intensive crops. In some cases, Israeli authorities even uprooted Palestinian fruit trees: between 1973 and 1987, for example, about 700 hectares of citrus trees were uprooted in the Territories. To protect Israeli production from competition, exports from Gaza were heavily restricted; furthermore water resources were allocated to Palestinians on the basis of soil conditions and type of crop.107 Today, production is heavily influenced by trade imbalances that have their roots in the occupation. While Israel restricts imports of Gaza crops that compete with Israeli produce, Israel sells freely in the Occupied Territories.108 Israel exports "substantial quantities of fruits and vegetables at prices with which Gazan farmers have been unable to compete."109 Previously a net exporter of agricultural produce, Gaza has been a net importer since 1984 (see Table 5).
Water scarcity and imbalanced trade have affected citrus production. The area under citrus cultivation contracted steadily from the early 1970s to the mid-1980s. Productivity per hectare also appears to have declined (see Table 6).110 In the late 1980s, citrus production accounted for only 20 percent of the value of agricultural output, down from 50 percent in the previous decade.111 This drop in production has affected other sectors of Gaza's economy, such as processing. "Many orchards lie abandoned because water salinity is too high for the crop. Today it is uncertain whether Gaza citrus production can utilize the full capacity of a newly constructed orange juice production plant."112
Israel claims that agriculture in Gaza expanded under the occupation. The Israeli claim may be based on a steady increase in the area used for vegetable production: from 300 hectares in 1967 to 4,800 in 1985-86. While the output of all fruits, including citrus, has declined from a 63 percent share of total agricultural value in 1969 to 27 percent in 1990, vegetables have increased from 14 to 50 percent in the same period. Vegetable crops are less water intensive and more salt tolerant, but they are also less productive (particularly in rain-fed areas) and more labor intensive. Profitability of vegetables has suffered because some export markets (for instance, Jordan) have imposed annual quotas, and competition has increased.113
Water scarcity has also adversely affected grazing areas and animal husbandry. Although livestock increased its share of total agricultural value from 21 percent in 1969 to 30 percent in 1990,114 military constraints on land use and overgrazed rangeland have combined with water scarcity to limit real growth in this sector.115 The greatest growth has occurred in the area of poultry production; more profitable types of livestock, such as cattle and sheep, have remained comparatively limited
In sum, water scarcity has hampered agriculture in Gaza, discouraged investment and forced many Gazans to look for off-farm work. Hydrologist Gwyn Rowley writes, "The net effect [of water scarcity] is that carrying capacities and herd sizes are diminished and crop outputs are reduced or fail and the population has to 'move on,' for example, with younger elements seeking employment elsewhere as in urban areas."116
Economic Decline
Industry now accounts for a larger share of Gaza's GDP than prior to the occupation, rising from 4.4 percent in 1965 and 1966 to 12.2 percent in 1990. But overall industrial growth in Gaza has been slow, well behind the pace of "similar" cases, according to the World Bank.117 As a result, labor has moved from agriculture to wage employment in Israel rather than into other sectors of Gaza's economy (see Table 8).
A recent World Bank report says that the increase in migrant labor during the occupation was simply a function of "pull" factors in Israel: "Following the occupation, major changes took place; Occupied Territories workers were allowed to seek employment across the 'Green Line' which ultimately created a massive drain of people out of the agricultural sector."118 This perspective neglects the "push" side of the process. While it is likely that the prospect of wage labor in Israel is attractive to some Palestinians,119 the lack of economic opportunities in Gaza also contributes to the movement of labor.
An exclusive focus on pull motivations also ignores the role that Israeli policy in Gaza played in creating the migrant labor economy. Policies that enforced low levels of water consumption made agriculture "a burden rather than a source of income and jobs." Restrictions on development in other sectors of the economy contributed to general stagnation. As a result, local job opportunities were rare, and by 1994 more than 140,000 out of 2 million Palestinians in the Occupied Territories had, at some point, worked in Israel.120
The dependence on wage labor in Israel is a strong contributor to the current economic crisis in Gaza. If population growth and agricultural decline were responsible in large part for the territory's economic instability, Israeli border closures have triggered an economic debacle. In 1994 alone, closures produced an estimated loss of $400 million in earnings in the Occupied Territories.121 The impact has been proportionately greater in Gaza, which is much poorer than the West Bank. Prior to the intifadah, close to 70 percent of Gaza's workforce was employed in Israel. In January 1994, this number was 11 percent (see Table 9).122 Not only has the migrant labor economy collapsed, so too have the support services that grew out of it. The remainder of Gaza's economy has been unable to absorb this new wave of jobless Palestinians. Unemployment is currently estimated at 60 percent;123 among working males, underemployment is around 38 percent.124
Faced with the task of creating a stable political structure within a territory that has been in upheaval for decades, the fledgling PA found itself woefully ill equipped to deal with the additional burdens of an exploding population and a shrinking resource base. A little over a year after the signing of the Accord, initial elation had faded. "We can now go freely to the beach," one resident said, "but we have also never been so badly off in economic terms."125 The hardship faced by Gazans perpetuated the long-standing resentment of Israel; it also contributed to the emergence of dissatisfaction with Arafat's regime.
Legitimacy and Control
The 1990s have been years of rapid change in the Middle East. Elements of the following analysis may therefore be quickly superseded by events. Yet it remains likely that unless an alternate source of fresh water is developed, water scarcity in Gaza will continue to place real constraints on economic development and threaten political and social stability. The Gazan case appears to support the hypothesis that environmental scarcity can simultaneously increase economic deprivation and disrupt key social institutions, leading to civil strife and insurgency.126
To cause civil strife, economic crisis must be severe, persistent, and pervasive enough to erode the legitimacy or moral authority of the dominant social order and system of governance. System legitimacy is therefore a critical intervening variable between rising poverty and civil conflict. It is influenced by the aggrieved actors' subjective blame system, which consists of their beliefs about who or what is responsible for their plight.127
While the majority of Gazans continue to hold Israel accountable for the conditions under which they live, it is clear that Arafat's administration is being held accountable as well (see Figure 2). The survival of the PA in Gaza rests on its ability to balance the dual objectives of achieving legitimacy in the eyes of Gazans and achieving the stability demanded by Israel. In these early years of autonomy, the latter objective seems to be the priority: Arafat's authority derives more from his police force as popular support for his administration wavers.
In major population centers, Palestinian police have replaced Israeli soldiers as the immediate source of authority. Arafat's ability to serve simultaneously as an effective administrator and as a nationalist icon is in question. Diaspora Palestinians see Arafat as a distant local leader who has lost the ability to represent their interests internationally; many Gaza Palestinians see him as an autocrat committed to a peace process that ignores their immediate economic needs. Arafat risks becoming a "Mr. Palestine increasingly disowned by Palestinians."128