Home inFocus BDS: Who Bears the Burden, Israelis or Palestinians?

BDS: Who Bears the Burden, Israelis or Palestinians?

Dan Diker Spring 2016
A Muslim worker at SodaStream’s new factory in the Idan Negev industrial area in Israel. (Photo: Eddie Gerald)

European dedication to the thesis that Israel’s ultimate peace and security is dependent upon the establishment of Palestinian statehood raises serious questions regarding the wisdom of European Middle East policy in general and on the Palestinian-Israeli conflict in particular.

ISIS’s current crusade destabilizing the Middle East and now threatening Europe’s national security calls into question the newly adopted European policy of labeling Israeli goods manufactured in Jewish settlements. The EU decision in November 2015 to label goods manufactured in “Israeli settlements” in the West Bank underscores Europe’s ill-conceived strategy for advancing Palestinian statehood. The EU guidelines have fed the Palestinian appetite for intensified Boycott Divestment and Sanctions (BDS) activities against Israel, such as its near success in forcing Israel’s ejection from the International Football Federation in 2015.

However, European motivated Palestinian BDS actions have also ricocheted against Palestinian society, causing unemployment, adding economic distress and political instability, and even threatening a potential collapse of the Palestinian Authority (PA).

European Policy and Palestinian Policy Collide

Europe considers labeling of products from Jewish settlements in the former Jordanian occupied West Bank an appropriate pressure point to force further Israeli territorial concessions in order to bring about “two states for two peoples.” As such, the EU does not recognize Israel’s presence beyond the 1949 Armistice Lines. However, Europe fully recognizes Israel inside the 1949 Armistice Lines, (pre-1967, the “Green Line”) and has engaged with Israel in substantial trade inside those lines. This is where the EU and Palestinians policies collide. Neither the Fatah-dominated PA nor Hamas recognizes Israel as the nation state of the Jewish people even within the curtailed 1949 Armistice Lines. Both Fatah and Hamas advocate boycotting Israel on both sides of the Green Line. The PA leadership has spoken publically about collapsing Israel’s economy as a whole.

In fact, it is difficult to find support in Palestinian discourse for the European policy of product labeling as a tool to advance peace between Palestinians and Israelis. On the contrary, the Palestinian narrative fronts BDS as a weapon to cause the economic destruction of Israel.  For example, Najat Abu Bakr, a member of the Fatah party in Nablus, in a seminar near Jerusalem, wrote on her Facebook page that, “BDS is a religious obligation for Palestinians and will cause the destruction of the occupation, especially since it will cause the collapse of Israel’s big factories (in Israel) and the settlements.”

Senior Fatah member Muhammad Shtayya reflects this Palestinian strategy in his comments. For example, Shtayya explained to reporters in an interview with France 24 that Israeli industrialists have taken far-reaching steps to help U.S. Secretary of State John Kerry achieve a peace deal after they realized that a failure to reach an agreement would result in a full boycott of Israel that would batter Israeli industry itself.

Senior Fatah officials have been dedicated to accelerating Israel’s isolation through European diplomacy. During a meeting with French officials in Ramallah, the Palestinian news agency Ma’an reported Shtayya as saying, “The next step after labeling products from Israeli settlements, should be that Israeli settlers with dual nationalities should be stripped of their European citizenship.”

Dr. Nabil Shaath, a top Fatah official and former acting PA Prime Minister and Foreign Minister went beyond talking about boycotting Israel’s economy. He told Ma’an about the need to “label” settlers in order to revoke their right to enter Europe without a visa.

These Palestinian statements reflect a deep-seeded Palestinian commitment to assaulting and isolating Israel through terror, incitement, delegitimization, and the BDS campaign. Europe’s policies are empowering these destructive Palestinian attitudes instead of encouraging the Palestinians to positively advance their statehood project.

Harming the Palestinian Economy

Ironically, it is this last element – advancing BDS – both via the Palestinian Authority and Palestinian civil society that has already exhibited signs of ricocheting and threatening the Palestinian economy. In fact, since 2014, European inspired BDS actions have already cost the Palestinians nearly one thousand jobs among Palestinian employees in 15 major Industrial Zones in Area C of the West Bank that houses joint Palestinian and Israeli factories and other businesses. This development has dragged thousands of Palestinian families into the cycle of unemployment and acute economic distress.

The above comments of Fatah member Najat Abu Bakr regarding BDS’s damage to Israeli “settlement factories” inside the Armistice Lines touches on the critical and potentially fatal error of European policy of Jewish settlement product labeling. In fact, “Jewish settlements” produce only minor products such as wine, Judaica, crafts, and kosher food products. Some agricultural crops are produced in Jewish settlements themselves. The major effect of Europe’s product labeling has ended up in BDS activists targeting the 15 West Bank Industrial zones that employ 35,000 Arab and Palestinian workers.

Investment in the West Bank

Herein lies the major contradiction between European settlement labeling and Palestinian policies on boycotting Israel. The Europeans have only targeted the Jewish settlements themselves; however their policy has energized Palestinian BDS actions that target Israeli businesses on both sides of the 1967 Green Line including the major industrial zones.

These West Bank Industrial Zones are technically located within the municipal boundaries of major Israeli settlement blocs. However they act independently as centers of employment to 35,000 Palestinians that include Palestinians from towns and cities across the West Bank and well as Israeli Arabs. In other words these are “normal” industrial centers that can be found in any Western country and they are the result of major investment by Israeli and foreign investors, as well as Arab-Israeli financiers, who could have established factories in any other place in pre-1967 Israel, in Jordan, the Gulf States, or the Far East, where labor is far less expensive.

These investors have capitalized Palestinian-Israeli economic cooperation and normalization in order to advance good neighbor relations and a pathway to a final peace deal. It is this economic normalization that Palestinian political leadership and civil society BDS activists are working to disrupt.

Ironically, the BDS economic assault against Israeli companies in the West Bank Industrial Zones has exacted a high price from Palestinians employed there. On average these Palestinian workers earn 5,000-6,000 Israeli shekels per month ($1,250 to $1,500 USD) plus health and insurance benefits as guaranteed by Israeli law.  Palestinian BDS campaigns have resulted in the closing of at least one major factory and the forced unemployment of some 850 Palestinian and other Arabs. These Palestinian workers, if they were to find employment in the Palestinian controlled Areas A and B, of the West Bank would only earn some 1,500 shekels per month, a reduction of 72 percent – without the insurance and social benefits that they currently receive from Israeli employers in the Industrial Zones.

West Bank Industrial Zones

The West Bank Industrial Zone model had been established in the late 1990’s by Natan Sharansky, then Israeli Minister of Economy, as a micro example of what a peaceful relationship between Palestinians and Israelis might look like.

The zones stood largely empty until 2002, due to heavy Palestinian employment inside pre-1967 Israel. However, when Palestinian terrorism stemming from the second Palestinian intifada penetrated Israeli cities it became impossible to employ large numbers of Palestinians inside Israel. West Bank Industrial Zones became a solution that enabled tens of thousands of Palestinian workers to work near their homes, solving an acute Palestinian economic problem while maintaining Israeli security requirements.

The model of Israeli and Palestinian economic cooperation in the major West Bank’s Area C commercial centers has been based on complete social and economic equality between Palestinian and Israeli workers as SodaStream’s Israeli American CEO Daniel Birnbaum, a Harvard Business School graduate, testified before a U.S. Congressional Committee in the summer of 2015.

The major gap in income and worker benefits between the tens of thousands of Palestinians working in stable companies in Israeli Industrial Zones in Area C of the West vs. Palestinians working in Palestinian companies in major Palestinian cities also affects the lives of 35,000 families, which translates into a better livelihood for some 200,000 West Bank Palestinians, a substantial percentage of the Palestinian population of the West Bank.

The example of the multi-national corporation SodaStream that was pressured to close its West Bank factory and move to southern Israel illustrates the damaging effect of BDS on both the Israeli and Palestinian futures.

SodaStream, a global public company that is a world leader in home carbonation systems had established a major presence in the West Bank’s Mishor Adumim Industrial Zone, a 15-minute car ride from Jerusalem. SodaStream employed some 850 Palestinian and Arab workers until 2015, when under pressure from BDS leaders and activists, this multinational corporation quit the Mishor Adumim Industrial Zone and relocated in the southern Israeli town of Rahat. Despite intensive efforts, SodaStream’s senior management was unable to secure special permits to save the jobs of its Palestinian employees and bring these workers to the company’s new factory in the Negev, forcing the termination of hundreds of Palestinian jobs.

SodaStream’s Palestinian managers who spoke with this writer noted their frustration with the BDS movement. One Palestinian manager, said, “BDS does not represent me, and it does not represent the Palestinian people.” He continued, “SodaStream is a family, and the BDS people destroyed this family.” Daniel Birnbaum condemned the BDS campaign, telling the British Guardian newspaper, “It’s propaganda; it’s politics; it’s hate; it’s anti-Semitism.”

Palestinian Leadership Doesn’t Care

Empirical evidence of BDS’s damage to Palestinian employment has not deterred the Palestinian leadership or civil society from continuing to back BDS. Fatah senior member Najat Abu Bakr, explained that boycott of Israeli settlement products “will provide a partial solution to the problem of Palestinian employment, as it would create 90,000 Palestinian jobs, and if the occupation will lose the revenue from the settlement products in the West Bank it will amount to four billion dollars annually and that will lead to Israeli unemployment, not Palestinian unemployment.”

It is difficult to comprehend Najat Abu Bakr’s comments.

Presently there is no cash flow to create Palestinian infrastructure and generate the mass employment to which she refers. Her comments illustrate the Palestinian strategy, which is to assault Israel economically instead of advancing Palestinian economic wellbeing.  In fact, the Palestinian Authority can ill afford to attacks its economic relations with Israel.

Israel’s GDP is approximately $291 billion annually for 8.3 million people. The PA population of 3-4 million people had a GDP of $11.3 billion in 2012, according to Moody’s investment service. Israel sold $4.3 billion worth of goods to the PA in 2012, a mere 5 percent of Israeli exports and less than 2 percent of its GDP, while Palestinian sales to Israel accounted for some 81 percent of Palestinian exports. Palestinian purchases from Israel in 2012 accounted for 66 percent of its total imports. As Forbes Magazine’s Carrie Sheffield noted in a 2015 analysis, “The BDS-ers want to obliterate the vast trade surplus Israel extends to  ‘Palestine’ and offer nothing in its place.”

Europe’s Role

Despite the PA leadership’s economic and political belligerence and its damaging effect on Palestinian economic prospects, there is a growing chorus of Palestinian voices arguing for Palestinian Israeli economic cooperation and opposition to BDS. One Palestinian critic of the PA’s BDS policy has been Shaher Saad, the head of Palestinian Workers Union. Saad, after listening to a program on Radio Palestine that featured the pro–BDS declaration of PA official, told Radio Palestine,  “We demanded from the [PA] government and the previous government that they must create alternative places of employment.”

Saad continued, “It is impossible to revoke the employment of 35,000 workers that are employed in the settlement [the Israeli Industrial Zone], it is impossible to discuss this issue [the boycott of the settlement Industrial Zones] without finding a solution or without providing an alternative for these workers. The Palestinian Workers Union is not responsible but the government should do it. But our opinion is clear – that all sides should comport themselves responsibly and find places of employment for everyone and not simply impose BDS. It’s illogical to say to the 35,000 workers to sit at home… This is a catastrophe. It will increase poverty and the related social problems that the PA will have to confront.”

Has the European Union foreign policy establishment listened to and internalized the anti-BDS warnings of Shaher Saad, Chairman of the Palestinian workers Union?  There is no evidence that European policy makers have paid attention. In fact, the opposite appears to be true.

Europe has ignored the increasing Palestinian economic crisis and resulting political instability. It is not unreasonable to asses that current BDS pressures that have resulted in the termination of nearly 1,000 Palestinian workers in the West Bank in the past 18 months alone will metastasize into tens of thousands of Palestinian worker terminations from their places of employment which could recreate the Palestinian version of Egypt’s Tahrir square, but in Ramallah, the economic capital of the Palestinian Authority.

Palestinian restiveness has already exhibited anti-European sentiment and current European policies on settlement labeling will clearly result in blame on the EU for the political instability of the PA. Israeli peace activists, including former deputy foreign minister Yossi Beilin, have also voiced these concerns toward misguided European policies. Beilin, an author of the Oslo Peace Accords, recently warned against the possible collapse of the PA in an interview with Israel’s Ynet online news site.

The possibility of the PA’s collapse is not theoretical. In the Palestinian city of Nablus, on the evening of the outbreak of the current “knife intifada,” in August 2015, angry masses protested opposite the Nablus municipality following disruptions in the supply of water and electricity.  Demonstrators forced the resignation of Nablus strongman and confidante of Mahmoud Abbas, Mayor Gassan Shaka.

Europe has committed repeated mistakes in addressing the Islamic revolutions across the Middle East. Instead of learning from these errors, Europe insists on perpetuating them by sacrificing Palestinian economic and social-economic wellbeing.


The European Union’s policy of labeling products from Jewish settlements in the West Bank will likely fail to fulfill the EU vision of a peaceful viable Palestinian state living next to the State of Israel. In fact the opposite is true. Ironically the European policy’s resultant BDS actions will most likely endanger the existence of the fragile Palestinian Authority that is struggling to manage an ongoing economic crisis. High double-digit unemployment, worker strikes, and increasing public discontent with the PA’s corruption and economic incompetence have stunted the PA.

At the same time, the West Bank Industrial Zones have proved to be anchors of economic and social stability for more than 200,000 Palestinians who depend on the monthly salaries of some 35,000 Palestinian wage earners employed in these industrial centers. The hostility of the PA leadership and civil society and their increased BDS activity threaten the Palestinian future. If the BDS campaign continues to pressure companies such as SodaStream and the Israeli supermarket chain Rami Levi to abandon the West Bank and remain in major Israeli cities, the result will likely threaten the stability of the pre-state Palestinian Authority and even trigger a new wave of Palestinian refugees that Europe can ill afford to absorb. 

Dan Diker is Project Director of the Program to Counter Political Warfare and BDS at the Jerusalem Center or Public Affairs. He also served as Secretary General of the World Jewish Congress and can be reached at diker@jcpa.org