Palestinian workers are suffering fully from the escalation of the conflict between Israel and Hamas. Thousands of people have abruptly lost their sources of income after Israel suspended their work permits, while economic activity in the occupied West Bank is slowed due to restrictions imposed by the State of Israel and violence perpetrated by colonists.
In the city of Ramallah, Noora Abdeen Khalifeh runs a traditional clothing store. Since the October 7 attacks and the Israeli offensive launched in Gaza, the businesswoman has faced numerous difficulties to keep her business running.
“Our manufacturing process takes place between the West Bank and the Gaza Strip, where we have a workshop with 200 specialized artisans. But their houses were destroyed, as were the objects they had made. Now our workshop in Rafah has become a refuge for the displaced,” says the businesswoman.
As for the seamstresses employed in the West Bank, they are mostly not available at present. “Since schools are closed and children stay at home under the supervision of women, it is impossible for them to do work that requires as much concentration as embroidery,” details Noora Abdeen Khalifeh.
With the offensive in Gaza, economic activity has slowed and tens of thousands of people have been left unemployed since the decision of Benjamin Netanyahu’s government to suspend work permits for Palestinians in Israel. This measure initially affected Gazans before reaching many workers in the West Bank.
In central Ramallah, customers are scarce, and shops in the administrative capital of the Palestinian National Authority have been forced to adjust their hours due to this gloomy context.
“The stores are still open, but they close earlier. Activity is much less lively than usual,” describes Taher Labadi, a researcher associated with the French Middle East Institute based in Ramallah. “People from nearby cities and towns are moving less, and interior Palestinians (Israeli Arabs) who used to visit the city on weekends no longer come at all.”
“People think twice before going out,” continues the Palestinian economic expert. “There is a risk of being stopped at checkpoints by soldiers. “There is also the risk of encountering settlers who travel along some roads and shoot at vehicles.”
An “unprecedented” situation
To get around, Palestinian workers choose alternate routes, sometimes making long detours to reach their destination. Throughout the West Bank, movement restrictions imposed by Israel and the climate of tension related to settler attacks and Army incursions affect all sectors of the economy.
Since the start of the war, triggered on October 7 with the deadly attack by Hamas in Israel, more than 150 Palestinians have been killed in the occupied West Bank by gunfire by Israeli soldiers or settlers, according to the Ministry of Health.
“The olive harvest season, for example, which is very important for many families, has been completely overlooked. Many could not go to their lands because they are close to a settlement or the separation wall, where there is a direct risk of being shot at,” explains Taher Labadi.
Tourism is paralyzed, employees are technically unemployed and companies’ logistical problems have worsened. The economic situation in the occupied West Bank is also affected by the suspension of work permits in Israel granted to Palestinians.
According to the International Labor Organization (ILO), before the war, 192,700 Palestinians worked in Israel, including 40,000 in settlements, attracted by higher wages than in the West Bank, especially in the construction, agriculture and services sectors.
“What am I going to do? Nobody knows if we will be able to return or not. I don’t know how I will be able to support my family,” worries Raed, a Palestinian without a job in Israel, interviewed by the American public radio NPR.
This drastic drop in income for thousands of workers directly affects the economy of the occupied West Bank. “People tend to reduce their spending, limiting it to basic necessities. They are also dipping into their savings and postponing any economically important investments or decisions,” analyzes Raja Khalidi, director of the Palestine Economic Policy Research Institute (MAS).
It is not the first time that Israel has turned off the tap for Palestinian workers in times of crisis, but the current situation is “unprecedented” in its scope and duration, says the economist.
A dependent and under-assistance economy
Before the Hamas attacks and the Israeli offensive in Gaza, the West Bank was already in a deep financial crisis that was worsened by the Covid-19 pandemic. Under limited international assistance, its economy has been negatively affected for decades by the Israeli occupation.
According to a recent United Nations report, restrictions imposed in Area C of the West Bank have cost the Palestinian economy $50 billion between 2000 and 2020.
The events of October 7 have only made the situation worse. According to an official from the Palestinian Authority’s Ministry of Economy cited by Al Jazeera, the West Bank could lose three points of its GDP this year.
“GDP measures the cost of all this, but it says nothing in terms of economic development. In reality, Palestinian production has completely collapsed for years and survives thanks to international assistance,” highlights Taher Labadi, underlining that rate of employees in the public sector is 20% in the West Bank. This is a way for the Palestinian Authority to “redistribute aid and maintain some sort of economy.”
Furthermore, the Palestinian economy has no room for maneuver without Israel. The pay of officials depends largely on the transfer of Palestinian value-added taxes collected by Israel, a measure that the Hebrew state regularly suspends to pressure the Palestinian Authority.
This situation of forced dependence on the part of the West Bank, where 72% of trade is carried out with Israel, arises with each closure.
“In the perspective of a two-state solution, it is necessary to create a Palestinian economy in terms of numbers,” explains Taher Labadi. “However, in practice, this economy has long ceased to exist.”
This article was adapted from its original in French
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