Jerusalem’s Economic Shift and the Gap between the City’s Arabs and Jews
Since the occupation and unilateral annexation of Arab East
Jerusalem in June 1967, Israel has sought not only to annex the
city, but also to change its image and demographic balance.
Therefore, it is obvious that the economic destruction in Jerusalem
must be studied within the framework of the general Israeli
policies in Jerusalem. The geopolitical changes that resulted in
coercive demographic changes led, in combination with the natural
demographic changes in the population, to socioeconomic
Social, economic and demographic transformations in Palestine in
general, and in Jerusalem in particular, are caused both by the
Israeli occupation and by natural development. Natural
transformations result from population growth, migration,
fertility, mortality, technology and new economic spheres, while
"occupation-made" transformations have been imposed through
displacement and compulsory economic mobility. There are direct and
indirect challenges to a healthy economy and the well-being of the
population. High population density, limited job opportunities,
lack of investment, poor quality of services and unmet
service-related needs all have made living conditions extremely
difficult and have deprived society of the chance for
In 1948 about 98,000 Palestinian residents left or were expelled
from Jerusalem. Since Israel annexed East Jerusalem in 1967, the
Palestinians in Jerusalem have been subjected to forced demographic
change aimed at tipping the population ratio. In 1967 the
population of East Jerusalem was, by low-end estimates (due to the
absence of accurate statistics), about 69,000 people. The estimated
population in 1991 was approximately 151,000. Since 1997, when the
first Palestinian census was conducted, there has been an accurate
count of the number of Palestinians in the Jerusalem governorate,
which is now comprised of two parts: the area annexed by Israel in
1967 (J1) and the rest of the Jerusalem district (according to
previous regional divisions) under Palestinian administration
Two integrated stages can be highlighted in the Israeli policies
towards Jerusalem. The first is based on the segregation of and
limitation on Palestinian growth in three dimensions: constraining
physical Palestinian expansion, increasing dependence on Israeli
resources and linking the population's basic needs with Israel.
This was combined with administrative and legal measures to
increase the number of Israeli settlers and to decrease the number
of Palestinians in Jerusalem. Israel also adopted a policy of
demolishing Palestinian houses and separating Jerusalem from the
surrounding Palestinian villages, using the structural scheme of
the city, bureaucratic procedures at checkpoints, the permit
system, physical segregation by the separation wall and
strengthening the links between Jerusalem and the surrounding
Israeli settlements. The second stage is based on weakening the
remaining Palestinian society by undermining the institutional
frameworks, deepening the subordination of the Palestinian
existence in Jerusalem to Israel's judiciary system and minimizing
opportunities to utilize the natural resources.
Recent Statistical Trends
Israel's separation wall adds another challenge to these trends.
Approximately 62% of Palestinians in Jerusalem 10 years of age or
older have been forced to move out of areas surrounded by the wall,
in order to reach educational and health services, to go to work,
and for tourism and social and entertainment activities. In
addition, some 33% of Palestinians in Jerusalem have changed their
place of residence, with 54% of these changing their residence for
the first time after the wall was built. The wall's construction
resulted in the confiscation of land belonging to 19.2% of
Palestinian families in Jerusalem.
Some studies show that the wall has had a major impact on trends in
international emigration. Since the construction of the wall, the
number of people who are thinking of emigrating has risen by
approximately 22% in the Jerusalem governorate. It should be noted
that this tendency is much higher in annexed Jerusalem (J1)
compared with the rest of the Jerusalem governorate, or J2 (54% of
households in J1 compared with 10% in J2). As such, the wall should
be viewed as a system forcing isolation, rather than as a solitary
physical structure. Along with this wall comes a permit system,
specified crossing times and limitations on the freedom of
movement. Combined studies show that the impact of this system is
greater in its ramifications for residents' ability to move than
those of both the Nakba of 1948 and the Naksa of 1967.
Labor and Wages
The labor force in the Jerusalem governorate is comprised of those
who work in Israel, the settlements and the Palestinian
territories. The Israeli labor market provided job opportunities
for 35.6% of workers in 2004, in comparison with 39.1% in 2002.
Residents of the Jerusalem governorate have also suffered from a
rise in unemployment since the outbreak of the al-Aqsa intifada in
Unemployment rose by 53% between 2000 and 2005, from 11.5% to
17.6%. Comparatively, unemployment in the West Bank rose to 26.8%
in 2005, up from approximately 11% in 2000. This high rate is due
largely to the closure policy that Israel has imposed on
Palestinian population centers since the end of 2000. Relatively
speaking, the unemployment rate in J1 is lower than that in J2
because of the relative ease of accessing labor markets in Israel.
The unemployment rate in J1 was 15.5% in 2005, compared to 21.9% in
Even though wages in Israel are higher than those in the
Palestinian labor market, and although Palestinians in the J1 area
are able to move easily within Israel, 43.5% of Palestinian workers
receive less than minimum wage - more than four times that of
Israelis (10%). Furthermore, the main source of income for 32.2% of
Palestinian families in J1 comes from salaries and wages from the
Israeli labor market, compared with 14.2% of families in J2.
Poverty and Social Security
Average household consumption and expenditure are major indicators
for determining the quality of life and proximity to the poverty
line. Even though expenditure and consumption levels in the
Jerusalem governorate are better in comparison to other districts
in the Palestinian territories, the percentage of Palestinian
residents of J1 who live below the poverty line (61.8%) is almost
four times that of Israeli residents (17.5%). Nearly 70% of
children in J1 live below the poverty line, as opposed to 26.7% of
Israeli children, i.e., poverty is three times more prevalent among
Palestinian children than among Israeli children.
The above challenges contribute to a growing deterioration in the
quality of life, as seen in high poverty rates, low standards of
living, low school enrollment rates, low levels and quality of
health services and the lack of entertainment and cultural centers.
This deterioration is compounded by the isolation, geographic
alteration and confiscation of land that has come hand-in-hand with
Israel's separation wall. Social, physical and psychological ills
are up, including the spread of crime, corruption, deviance, hatred
and mental illness. Some studies have shown that 38.3% of families
polled in Jerusalem believe that someone in their locality is doing
drugs, and 16.1% say that members of their family have been
harassed by these people. Twenty percent of families attribute the
spread of this phenomenon to the deteriorating economic
Survey results also show that 84.6% of families report being unable
to visit socially with relatives who live beyond the wall. Another
56.3% of families report being unable to participate in
entertainment, cultural and social activities because of the
The Gap between the City's Arabs and Jews
At the end of 2005, the total population of the Jerusalem
governorate (J1+J2) was approximately 324,000. The Palestinian
residents of the area annexed to Israel (J1) constituted about 34%
of the Jerusalem municipality (following the Israeli-defined
borders of the Jerusalem municipality). Israel has acknowledged its
desire to ultimately lower the percentage of Palestinian residents
of the Jerusalem municipality to just one-fifth of the
municipality's total population (22%).
In 2005, the population of the Jerusalem governorate constituted
approximately 17% of the population of the entire West Bank, with
62.2% of Jerusalemites living in the area annexed to Israel's
borders after the occupation of 1967. Statistical data indicate
that the average housing density in this area today is
approximately 1.8 persons per room, as opposed to 1.1 among the
The stark imbalance between indicators of social and economic
status between the Palestinian and Jewish communities in Jerusalem
affects all aspects of social and economic life. For example,
statistics show that the average number of children to each
Palestinian pediatrics clinic is approximately 69,000, while the
average number of Israeli children per clinic is 1,821. The
percentage of Palestinian schools equipped with computers is 16.5%,
compared with 83.5% of Israeli schools. There is no shortage of
classrooms in Israeli schools in Jerusalem, while an additional 650
classrooms were needed in the city's Palestinian schools in 2005.
In addition, 40% of Palestinian classrooms were originally designed
as houses. There is one public park for every 7,362 Palestinians,
compared with one for every 447 Israelis, in their respective areas
of the city. Furthermore, Palestinians have no public athletic
facilities, while Israelis have 36 facilities. In the Palestinian
areas, there are 2,620 buildings that remain unconnected to sewage
systems, while only 70 buildings are unconnected in Israeli
The Palestinian Authority is prevented from providing services in
the city, while the services offered by Israeli authorities are not
distributed equally among the city's residents. These disparities
place residents under continuous pressure to leave the city and
escape the prohibitions against construction and the high costs of
obtaining a building permit (between $25,000-30,000). According to
a special study conducted by Meir Margalit, a former Jerusalem
councilman, the cost of a building license in Palestinian areas for
a 200-square meter apartment runs at NIS492,109 (nearly $100,000,
an exorbitant fee given Palestinian earning potential). This fee
does not include additional required fees for connecting the
property to the sewage system or for paying lawyers. This means
that the cost of obtaining a building license might exceed the cost
of the actual construction.
Palestinian Resistance to Israeli plans
The Palestinian vision in resisting the Israeli plans in Jerusalem
is based on the political and legal bases concerning Jerusalem
among the PLO resolutions, Arab summits, United Nations General
Assembly resolutions and the Arab position on the Security Council
resolutions. The operational realization of this vision was
affected by the actual sovereignty on the ground, the generally
supportive but often complacent Arab role and the changeable
international position regarding the political and legal status of
Jerusalem. The Palestinians relied on strengthening the
institutional frameworks, raising and reviving religious and
national feelings and mobilizing international support to put more
pressure on Israel. But the conflict in Jerusalem was imbalanced.
The Palestinian efforts were loyal but achievements on the ground
remain modest due to a lack of organization and coordination.
The Palestinians in Jerusalem have been subjected to Israel's
systematic policies of discrimination. These policies weakened
Palestinian identity and downgraded Jerusalem from a resource city
for the whole West Bank to a city in need of development aid at the
institutional level and of humanitarian aid at the population
level. They also weakened the Palestinian infrastructure and
replaced the Palestinian economy with the Israeli economy. As a
result, they diminished the role of the Palestinian institutions in
providing basic services and increased the emigration of persons
and institutions outside the city. These policies have created a
large socioeconomic gap between the Palestinian and Israeli
residents of Jerusalem. Despite all this, the Palestinians still
remain in Jerusalem demographically and economically; they cannot
be neglected or ignored. Therefore, it is Israel's responsibility
to ensure social, economic and demographic justice as a key element
for coexistence and prosperity in Jerusalem.
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