Weaponizing Economics: A Critical Look at the Political Economy of Palestine

Aug 6, 2025

Ibrahim Shikaki, an associate professor of economics and expert on the political economy of Palestine, dives into the complexities of economic dependency and occupation. He explores the historical roots of these issues, tracing them back to the British Mandate and the impact of post-1967 military orders on Palestinian labor dynamics. The conversation highlights Israel's exploitation of cheap labor and resource control, touching on the lingering effects of the First Intifada and the Paris Protocol. Shikaki emphasizes how framing these economic challenges is crucial to understanding the broader context of the occupation.

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INSIGHT

Dependency Explains Uneven Development

Dependency theory explains that the Global North grows richer by extracting resources from the Global South, causing divergence not convergence.
Ibrahim Shikaki links Palestine's economy to this systemic extraction rooted in settler colonialism.

INSIGHT

Mandate Policies Reshaped Palestinian Economy

British Mandate policies actively reshaped Palestinian markets by privileging Zionist industries and monetizing taxes.
These changes forced many Palestinians into debt and undermined subsistence agriculture well before 1948.

INSIGHT

Occupation Transformed Subsistence To Wage Labor

The 1967 occupation used military orders to restrict industry, confiscate land and convert Palestinians into wage laborers.
By 1987 roughly 40% of Palestinian labor worked in Israel, deepening economic dependency and hollowing domestic production.

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In this episode of the FREE (Forum for Real Economic Emancipation) podcast, hosts Claire and Professor Ibrahim Shikaki, an associate professor of economics at Trinity College and an expert on the political economy of Palestine, delve into the economic dimensions of the crisis in the region. They discuss Professor Shikaki's paper, "Weaponizing Economics Against Palestine," and explore how economics as a discipline can mystify the true nature of events. The conversation uses dependency theory as a framework to explain how the Global North's wealth is built on the systemic extraction of resources from the Global South.

Key topics include:

Historical Context: The discussion traces the origins of economic dependency back to the British Mandate, where policies encouraged Jewish emigration and shifted the weight of industrial production through concessions to Zionist organizations, changes in tax collection, and manipulation of tariffs.
Post-1967 Occupation: The hosts and guest examine how the Israeli occupation after 1967 implemented military orders to restrict Palestinian industry, confiscate land, and create a dependent economy. This led to a significant portion of the Palestinian labor force working in the Israeli construction sector. The hosts discuss how Israel benefits from this arrangement by exploiting cheap labor and using the Palestinian territories as a supplementary market and a resource for factors of production.

Resource Control and Austerity: The episode highlights the commodification of resources like land and water. Israel's state-owned company, Mekorot, controls the water supply, with 80% of Palestinian water having to be purchased from them. The discussion also covers the Paris Protocol of 1994, which formalized economic dependency and gave Israel the power to use clearance revenues as a tool for economic blackmail against the Palestinian Authority (PA). This fiscal dependency has left the PA unable to pay its public employees their full salaries and has contributed to high unemployment rates.

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