ABSTRACT
The West Bank and Gaza Strip, occupied by Israel since 1967, have stagnated in the number employed (some 17,000) in domestic industry for 20 years and in the percentage contribution (8.5 per cent) to the gross domestic product. Their 4,000 establishments are mostly workshops employing on average just over four workers. Food and textiles are the dominant industries and there is much sub-contracting for Israeli firms. Some 90 per cent of industrial imports come from or through Israel and some 70 per cent of their industrial exports go to Israel, with the remainder going to or through Jordan. There are many barriers to the development of industry in the occupied territories but they overwhelmingly have their origin in the occupation itself and to a lesser degree result from difficulties made by Jordan. The Military Government runs the territories to ensure not only military security but also Israel's "economic security." Three alternative economic scenarios are projected to 1997 based on three possible futures facing the territories: (a) a conservative scenario based on continuing the occupation in its present form (status quo); (b) a reformist scenario in which both Israel and Jordan liberalize their policies within the framework of continued occupation; and (c) a radical scenario in which Israel leaves the territories in return for peace, and a separate Palestinian entity is established. In terms of industrial development the conservative scenario would yield minimal results, the reformist scenario some minor improvements in the "quality of life," and the radical scenario would result in rapid industrial development and settlement of returning refugees.
