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Extra resources for Developing the Occupied Territories: Private sector development
The 1948 war led to partition of Jerusalem into the Eastern and Western parts. At the end of the 1967 War, East Jerusalem was occupied by Israeli forces. Following the occupation, the Jerusalem city limits were expanded by Israel to include some surrounding areas from the West Bank, The expanded city was annexed by Israel on July 30, 1980, Arab residents of Jerusalem have been given the option of obtaining Israeli citizenship although very few have Chosen to do so. Israel views Jerusalem as its historic capital and maintains that Jerusalem must never again be a divided city.
Until February 1993, there was only one local insurance company in the West Bank and Gaza, the Arab Insurance Company (AIC), headquartered in Nablus. This company was established according to the Jordanian Insurance Law in effect before 1967, but its activities are now monitored by the Israeli Controller of Insurance; it is required to conform to regulatory standards somewhere between the prudential limits set by Jordanian law and the tougher legal limits in Israel. AIC is only a modest supplier of capital to the OT economy due mainly to lack of investment opportunities.
During the mid-1970s, the first oil shock led to a slowdown in Israeli growth. However, the Gulf oil boom offset the reduced demand for unskilled labor by raising demand for skilled Palestinian labor, and led to substantial transfers from expatriate Palestinians and other Arab sources overseas. The collapse of oil prices in the early 1980s led to the first period of decelerated growth and stagnation in the OT. Israeli inflation was also almost completely imported into the OT. The Intifada contributed to a reduced labor demand in Israel outside construction, and reduced economic activity in the OT due to strikes, closures, and security-related restrictions on the movement of Palestinian personnel and goods.
Developing the Occupied Territories: Private sector development by World Bank