RECENTLY I was in Palestine, running the Bethlehem marathon to raise money for Medical Aid for Palestinians. I spent the weekend meeting Israeli human rights organisations and witnessing first-hand the impact of the military occupation on the lives of ordinary Palestinians.

Despite the occupation, and in the case of Gaza, a more than 10 year blockade, everyday life goes on. Much of my trip confirmed what I expected, but one thing that surprised me was the level of economic activity, and resilience, in the face of adversity.

Palestine shows what happens to an economy when barriers are deliberately placed in the way of free trade. Movement of goods and services, even over short distances, is unreliable. The movement of labour even more so. Pass laws constrain Palestinian travel across the West Bank, Jerusalem and Israel. Even the simple task of getting from Tel Aviv airport to Bethlehem, the same distance as from Glasgow to Edinburgh is complicated.

Taxis and buses are limited to certain destinations depending on whether they are Israeli or Palestinian, and where the driver has residence. Certain roads can only be used by vehicles with drivers from specific ethnic groups – with use of the highway network largely prohibited to Palestinians.

The occupation isn’t good for the Israeli economy in the long run either. There is a short term economic boost from free use of someone else’s land – settlements are illegal under international law and the Geneva Convention. But the costs of maintaining an army and checkpoints eats away at national budgets as much as it eats away at national morale and international standing.

The West Bank has a mainly agricultural economy. It suffers restrictions on access to water and transport. Despite producing some excellent products international exports is hugely problematic. And owning land is no guarantee of access – as I witnessed during my trip. Random evictions by the army, or settler violence, make simple tasks like planting or cultivating extremely unreliable.

Gaza, perhaps surprisingly, is the area with the most potential. Its international airport was completed in 1998, funded by international money, opened by Bill Clinton, and bulldozed by Israel three years later. Many examples of internal infrastructure investment have met a similar fate. And Gaza suffers from the blockade – causing huge humanitarian problems for its population of almost 2 million people.

Its coastline offers excellent tourist potential. Some investments in resorts has taken place, but lie woefully underutilised. Oil and gas discoveries in the Mediterranean lie within Palestinian waters.

Fishing was a mainstay of the economy in the past, but is now much constrained by Israeli limitations on access to waters. And its coastal location ensures some prime agricultural land.

The need for a political solution in Israel/Palestine is long overdue. When it comes, the potential for economic growth to benefit all who live there is huge.