Australia and the World Past and Present

If the Palestinian Territories were to become a state, what might it look like?

Would it be a micro-nation?

Could it stand on its own feet economically?

How does it compare with other countries?

The Palestinian Territories cover 6,220 square kilometres.

Gaza is 365 square kilometres – 41 kilometers long and 6 to 12 kilometers wide.

The West Bank is substantially bigger at 5,860 square kilometres.

If the Palestine Territories were to become a state, the country would not be the smallest in the world.

There are some 30 countries which are smaller in terms of area.

Some are tiny Pacific island states such as Nauru.

There are some tiny states which have served as tax havens in the past. On example is Liechtenstein. It is said to have have more registered companies than citizens. The country is known for its finance sector and also pharmaceutical production.

Many Caribbean nations are smaller in area than a future Palestine.

The Maldives in the Indian Ocean relies heavily upon its natural environment and surrounding waters to draw in tourists.

Singapore has less land than the Palestinian territories and is an economic powerhouse among micro-states. Singapore benefits from its proximity to massive Asian markets. Its workforce if highly educated. Many citizens are multilingual and English and Chinese are widely spoken. Because of this, Singapore can benefit from acting as a conduit for trade between China and English-speaking countries. The country has relatively low taxation. Infrastructure is good and corruption is low. The rule of law is strong. This helps to attract business investment which looks for stable legal environments.

In Luxembourg, the financial sector has grown in importance in recent decades. Interestingly, Luxembourg has managed to attract many of the European Union institutions to be based in the country. The country has also sought to attract tech firms. Amazon and Skype have their regional headquarters there.

Population Figures

As of 2022 the Palestinian Territories had a population of just over 5 million.

The West Bank has around 3 million while the Gaza Strip has around 2 million.

Population Density

The Territories as a whole have a population density of around 892 people per square kilomtre, but this doesn’t paint the whole picture.

The densities of the two territories are very different.

The West Bank has a density of 522 people per square kilometre while the Gaza Strip is significantly more crowded with 5,500 per square kilometre.

In fact, the Palestine Territories have one of the highest population densities in the world. There are only 7 independent countries with densities higher than this.

These include Monaco, Singapore and Bangladesh.

The Palestinian Economy

What has been important to the Palestinian economy in recent decades?

Foreign aid has been important as have remittances from Palestinians living and working in other countries.

Olive oil and livestock have also been important.

What could the economy of a future Palestinian micro-state look like?

Palestine would have a limited land area. But there are countries with less. A future Palestine would have a large population and therefore a lot of human capital.

Heavy industry probably doesn’t make a lot of sense given the land constraints.

If Palestinians can focus on investing in educating their people, it would make more sense to focus on creating a financial services or technology economy. In recent years, there has been a move to create IT companies – particularly in Ramallah.

One issue with IT is that in recent years, Israel has maintained a lot of oversight on the telecommunications systems in the area. There has also been Israeli oversight on the technology coming into the Palestinian Territories.

Could a future Palestine become a tax haven? A seat for regional institutions? A pharmaceutical hub? If a lasting peace can come to the Palestinians, there are some exciting options for growing a new economy.