Author: Serena Merrino
Affiliation: UCL School of Slavonic & East European Studies
Organization/Publisher: Review of International Political Economy, Routledge Press
Date/Place: Oct-Nov 2021/UK
Type of Literature: Academic Journal article
Number of Pages: 21
Link: https://www.tandfonline.com/doi/abs/10.1080/09692290.2020.1803951?journalCode=rrip20
Keywords: Saudi-US Relations, MBS, Yemen War, Khashoggi
Brief:
After the 1967 War, Israel delegitimized the use of Egyptian and Jordanian currency in the West Bank and Gaza strip and declared the Israeli lira as the only legal tender in the Occupied Palestinian Territories. This article explores how the shekelization of the Occupied Palestinian Territories works as a systematic tool of settler colonialism. While it is known that the expansion of one country’s currency to another country’s domain, also known as the internationalization of a currency, gives the former means of economic intrusion that restricts the latter’s sovereignty, the case of how this works in a settler colonial context is less well known. The article describes in detail the history and institutional framework by which Palestinians are forced to use the shekel as their national currency. The settler currency works to reinforce the availability and openness of Palestinian land for further annexation and expansion of the Israeli financial system into those new areas by dissolving native society. This new economic system makes the Palestinian Authority ironically the fourth largest importer of Israeli goods and services while also having to coordinate all money transfers, bank transactions, and payment clearances through the Israeli authorities. The use of the settler currency aids in creating a local elite that is dependent on a reliable method of Israeli cooperation. This perpetuates an unstable business environment that benefits local elites at the cost of fair competition. Settler currency creates trade imbalances and overvalues Palestinian goods and services which reduces their overall competitiveness in the global market. This process leads to a slow underdevelopment of Palestinian economy. While shekelization is similar to colonial currencies such as the CFA franc or the Sterling, the settler colonial nature of the project has its own peculiar distributive effects. In the Palestinian case, Israel’s repressive currency policy remains a constant threat that sustains the strategic goals of the settler colonial project. The author suggests that Palestinians should seek alternative methods such as cryptocurrencies.
By: Üveys Han, CIGA Senior Research Associate
