Could Sanctions and Divestment End the Occupation?
Recently, the Ontario division of the Canadian Union of Public Employees drew praise and criticism for taking a position
supporting a divestment and sanctions campaign against Israel aimed at ending the occupation of the West Bank, Gaza and
East Jerusalem. Many other churches and organizations have supported the campaign which originated with Palestinian
civil society, political leaders and labour unions. However broad based support has been harder to find.
Additionally, some organizations within Israel have also supported this approach including the more grassroots areas of
the peace movement who have felt boxed in by the confusing politics of Israel’s mainstream peace movement which has
supported the construction of the Separation Wall and the bombing of Lebanon.
In a research report put together by Shir Hever of the Alternative Information Center, it argues that only about 5% of
economic sanctions are effective based on research conducted by political scientist Robert Pape. In the case of South
Africa, sanctions played only a minor role in bringing down the Apartheid regime there although it had a major symbolic
effect by raising the awareness of the excesses of government policy which violated human rights on an international
According to the report, Israel is the “biggest exporter of fertilizers, polished diamonds and industrial oils. It
exports 57% of the total world exports of fertilizers, 34% of the total exports of polished diamonds, 26% of the total
exports of industrial oils and 12% of the total weapons sales.” Since 2002, Israel has become a lending market. Foreign
aid from places such as the United States and Germany has given Israel “a powerful base of foreign currency which
strengthened its economy.”
Since 1996, Israel has steadily increased its Central Bank reserves initiated by a 9 billion dollar grant from the
United States under the Clinton Administration in a move designed to stabilize the Israeli economy. In the event of an
effective sanctions and divestment campaign, Israel is better positioned and protected from the effects for a longer
period of time due to the size of these reserves. Israel’s trade deficit is also declining. Trade with the European
Union in particular is driving economic growth in Israel.
Israel has also, surprisingly, gained revenue from the increase in humanitarian assistance to the Occupied Palestinian
Territories since the signing of the Oslo Accords. Israel has imposed taxes and tariffs on these funds and has benefited
greatly from this financial arrangement.
Israel, according the AIC report, was the 10th largest arms exporter in the world. In 2001, Israel sold a variety of
military systems to over 57 countries in the world. Israel is the 4th biggest arms dealer to developing countries.
Though many Arab countries have boycotted Israel for decades, countries such as Saudi Arabia will be forced to drop
their boycott as a condition of joining the World Trade Organization.
Though South Africa had a wealth of natural resources which lessened the economic impact of the sanctions against it,
Israel’s economy relies on the import of raw materials to drive its economy. Raw materials, energy resources and
unpolished diamonds made up the majority of Israel’s imports. Israel is the 8th largest per capita exporter in the world
and 10th biggest per capita importer in the world. The US funds Israel at a rate of close to $3 billion per annum. In
2004, the US gave $2.64 billion to Israel. The AIC report also shows that the costs of the occupation surpass the amount
of foreign aid which Israel receives. Israel has also confiscated foreign currency sent to the Palestinians.
As with many sanctions and divestment campaigns, there is the need for significant support from within the country
supporting such measures from critical voices in order to build support abroad. Civil society organizations and others
in the peace movement have not sufficiently raised this issue to the degree that is required if they expect civil
society organizations in the West to support these measures.
Imports from EU countries make up 28% of Israel’s imports. Exports to EU countries make up 36% of Israel’s exports.
Boycotts targeted at Israel’s agriculture industry would also have political effects due to the political strength of
the industry in the country. The AIC report also argues that “a boycott of Israeli products will lead to scarcity in
foreign currency and to a slowing of military imports to Israel.”
Faith organizations, civil society and labor unions are best positioned to organize campaigns in the West targeting the
Israeli economy. However, for a campaign to be most effective, it would require significant internal support within
Israeli civil society. Without those voices coming forward, it will be a hard sell in Europe and North America where the
effects of a campaign would be most pronounced and potentially far-reaching in altering Israeli policies of occupation.
As in the case of South Africa, individual consumers not wanting to associate with the regime forced major corporations
to divest from the country from a moral position. As long as Hezbollah is well armed as a militia movement, the
likelihood of building broad based Western support for sanctions and divestment against Israel will be much more
difficult given the most recent conflict. Additionally, the Palestinian and Israeli peace movement needs to build a
broader base of support in order to more effectively call for sanctions as an effective political approach.