TEL AVIV – It would be too simple to blame Israel’s colonialist onslaught against the Palestinian people for the serious economic debacle Israel is experiencing at present. About one third of the country’s families, mainly the working class, are enduring enormous hardships, with officials admitting that a growing percentage of Israel’s children are going to bed hungry.

The Israeli war on the Palestinians is one major cause but not the only one. Statements by economic experts, published in the media, estimate that the 23-month Israeli military effort to subdue the Palestinian Intifada has cost so far approximately 57 billion NIS (New Israeli Shekels). Even if we subtract the $3 billion in annual U.S. military aid to Israel, most of which goes to pay for Israeli purchases from U.S. armament corporations, there still remain almost NIS 30 billion, or about $7 billion to be extracted from Israeli taxpayers to cover the costs of the brutal occupation.

Moreover, one has to add to these costs a vast cross-section of the Israeli economy that is in crisis because of the war. The tourist industry, hotels, restaurants, retail trade, the building industry, etc., are ruined and the tax revenues from these sources are much lower than two years ago.

Formerly burgeoning industrial branches are in ruins; some even have ceased to exist. The once blossoming high-tech industry has followed the lead of the U.S. and Japan, with the work force in this sector cut in half.

But the most shocking example is the textile industry, which once was one of the pillars of Israel’s export industry. In 1991, there were still two major enterprises, about 200 medium-sized plants and 2,100 small ones. Now all of them, with a very few exceptions, are gone. Most of them were situated in so-called “development towns” in the southern Negeb or the northern Galilee districts. In the 1950s, the government established these towns in the wake of its policy of spreading the Jewish populations, especially new immigrants, into outlying areas. In these “development towns” many textile producing plants, backed by generous government grants and loans, became major places of employment.

Now, with the globalization trend, almost all of these enterprises closed down, their owners moving them into free trade zones in Jewish settlements in the occupied Palestinian territories, or into neighboring Arab states, where plenty of super-cheap labor is available. At the free trade and industry zones in Karni, at the approaches to the Gaza Strip, cheap Palestinian labor is allowed to work at Israeli-owned enterprises. Israel plans to open similar “Parks” in Jordan, Kuwait, Oman and the Gulf Emirates. The Israeli government has lavished grants and loans to facilitate this transfer of thousands of jobs out of Israel and into the West Bank, Gaza and the Arab countries.

The former “development towns” in the southern Negeb and northern Galilee districts of Israel should be renamed “poverty-stricken towns.” They are suffering from mass unemployment up to 25 to 35 percent of the job-seeking residents. Most hard hit by this plight are towns and villages with Arab-Palestinian population. Many Arab women found employment with homework for textile enterprises. This has now almost come to an end, and thousands of those women, the husbands or fathers of whom are unemployed too, are without any income to help keep their families afloat.

According to the latest monthly statistics of the labor exchange office, among the 20 cities with 25 percent and above jobless rates, 14 are Arab-populated Israeli towns, two Jewish-Arab “mixed” ones, and four of the so-called “development towns” with Jewish population.

At present, 310,000 Israelis, 11.4 percent of the civil workforce, are unemployed. Sharon’s response to this surge in unemployment is to demand a drastic cut in unemployment benefits. He blames the unemployed for their plight, branding them as shiftless loafers who prefer living on state money to seeking and accepting available jobs.

Well, some hope lies in the fact that the government budget for next year has to go through a lengthy parliamentary path, and will probably, if at all, be adopted by the Knesset not earlier than by the end of March next year.

One thing should be clearly said: The sole scenario for the solution of the deep political and economic crisis is an Israeli withdrawal from all occupied Palestinian and Syrian territories seized in the 1967 war. Israel must take with it all those settlers in the Palestinian territories. This would not only open the way to peace, but also enormously cut the budget expenditures of the large “defense” forces.

The second line should be to separate Israel from the Bush administration’s plans for a war against Iraq and his drive for U.S. military, political and economic control of the Middle East and Central Asia. These are necessary steps in order to extricate Israel and its population from the deep political and economic crisis.

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