Palestinians seek end to trade dependence on Israel

A Palestinian worker sticks Intajuna (''Our Products'') stickers on Palestinian goods displayed in a supermarket in the West Bank city of Ramallah August 2, 2009.

RAMALLAH, West Bank (Reuters) - At Garden's grocery store in Ramallah, Dalia al-Khatib hands out fliers and showcases Palestinian goods for Intajuna ("Our Products"), one of many campaigns asking Palestinians to avoid Israeli products.

But across town, an all-Palestinian crew of laborers heads home after a day of work on the nearby Jewish settlement of Adam, like some 30,000 other Palestinians who help build settlements in the Israeli-occupied West Bank.

The contrast illustrates a Palestinian dilemma. After 40 years of occupation, their economy is tied to Israel's, so attempts to reduce its dependence clash with hard realities.

Palestinians use the Israeli shekel as currency. From cars to shampoo, countless goods come from or via Israel.

Most packaged foods and household products have a foreign or Palestinian counterpart, but fruit and vegetable vendors say they would be out of business without Israel, where most produce is grown.

Mocking the boycott, one vendor plucks the shirt he is wearing. "Even if this isn't Israeli, it probably has to be shipped through Israel. So what am I supposed to do?"

Calls for boycott started as far back as 2004, without much result. But that changed after Israel's Gaza offensive last January, says Mustafa Barghouti, a member of the Palestinian Legislative Council and a boycott advocate.

Boycotting, he says, is a great way to oppose Israeli policies non-violently. And it can help reduce Palestinians' dependence on the Israeli economy.

His outlook highlights a new tactic in many local campaigns, which now focus on developing the weak Palestinian economy.

"This isn't actually a boycott of Israeli products," says al-Khatib. "This is about supporting Palestinian goods."

The new trend in Palestinian grassroot movements seems, ironically, to fit with Israeli Prime Minister Benjamin Netanyahu's "economic peace" plan, which calls for Israeli implemented measures to develop the West Bank economy.

This has begun with relaxation of Israeli army restrictions on movement and the planned revival of mothballed foreign projects.

The United States and Britain recently acknowledged the positive impact of Israel's removal of checkpoints on the commercial life of West Bank cities such as Nablus.

Though Intajuna showcases are popping up in more Ramallah grocery stores, Israeli goods remain on the shelves, not least since many Palestinians are wary of their own national products, especially dairy, saying they fear spoiled goods.

Al-Khatib says Intajuna carefully screens goods.

According to many grocers, the campaign has increased shopper interest in Palestinian goods. But in spite of that, only a few noted a real change in buying patterns.

Labeling LAW

What most activists agree on however, is a complete boycott of products from Israel settlements, which are built on West Bank land that Palestinians need, to create a viable state under a comprehensive peace deal with Israel.

Settlements have been growing since Israel captured the land in the 1967 Middle East War. A half million Jews now live in the West Bank and Arab East Jerusalem, among 2.5 million Palestinians.

Ruled illegal under international law, the settlements are seen by major powers as a serious obstacle to a peace agreement.

Palestinian activists say products grown or made in settlements are a form of illegal exploitation.

But settlement goods can be hard to spot, especially fruits and vegetables, which are often unmarked. Settlements are the main exporter of dates for example, which are commonly eaten in Palestinian households during holidays and funerals. Palestinian Economy Minister Basem Khoury wants to block settler goods by implementing previously unenforced regulations that require all imports to have their source labeled.

But the West Bank cannot create instant self-sufficiency, and activists know their limits. They say they won't ask workers to quit settlement jobs while unemployment is over 30 percent.

Palestinian workers ending their shift at one settlement asked to remain anonymous and not be photographed.

"If I had an opportunity to work for an Arab company that could offer steady work, I'd go immediately," said one.

But another was not so sure. "When you work with an Arab contractor, just getting your pay on time can be tough. So in spite of yourself, you go work in settlements. You've got kids to feed, rent to pay."

Settlement jobs pay 150-250 shekels ($40-$65) per day. The same jobs with Palestinian companies pay 70 to 120 shekels.

Nasr Abd al-Kareem, an economist at Birzeit University in the West Bank, doubts the boycott will have much impact on Israel. He notes that Palestinians account for only about $3 billion out of Israel's $100 billion in annual trade.

"In principle, like all Palestinians, I'm with the boycott. But as to the real economic effect ... We as Palestinians can't claim to make Israel's economy suffer from our boycott."

Even if they buy Palestinian goods only, West Bank consumers are still dependent on Israel, argues Abd al-Kareem, since 60-70 percent of raw materials are Israeli.

(Editing by Douglas Hamilton and Samia Nakhoul)