It has been almost half a 12 months since Israel launched its still-ongoing siege of the densely populated Gaza Strip, killing tens of hundreds of individuals and galvanizing the world’s consideration on this newest eruption of violence within the area. The battle between Israel and Hamas — precipitated by the Palestinian militant group’s unprecedented assault on southern Israel on Oct. 7 — has turn into a serious world flashpoint and threatened to spill throughout the broader Center East. On the identical time, there may be maybe nowhere on earth exterior of Gaza and Israel the place the consequences of the continuing battle are being as acutely felt as within the West Financial institution by the Palestinians residing beneath Israeli occupation there.Â
Of the numerous methods the battle in Gaza is affecting life within the West Financial institution, one of the vital urgent is the financial influence on a territory whose monetary prospects are in some ways inextricably tied to its occupation. With restricted avenues for unimpeded financial progress even earlier than this previous fall, the West Financial institution has spent a number of months watching its financial system strained additional than any time in current reminiscence.Â
With collapse a rising chance, and long-term options nebulous, the place does the West Financial institution financial system stand immediately, and the place may it go from right here?Â
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Since Oct. 7, the Palestinian financial system has “skilled one of many largest shocks recorded in current financial historical past” the World Financial institution stated. Whereas a lot of the downturn has been in Gaza, the West Financial institution’s GDP dropped 22% within the fourth quarter of 2023, with poverty rising as a result of a “marked financial slowdown and constrained fiscal capability, which impacts the effectiveness of social safety applications.” Almost 1 / 4 of employment within the West Financial institution “has additionally been misplaced,” U.N. Growth Program Assistant Secretary-Basic Abdallah Al Dardari advised The Related Press. It is the “equal to 208,000 jobs,” he stated, whereas the West Financial institution is answerable for greater than 80% of the entire Palestinian GDP.
Produce gross sales are down almost 50%, one Ramallah-area grocer advised Al Jazeera in October, explaining the “nice difficulties transporting produce.” Delivery from Israel has turn into more and more “costly by way of fuel and the time it takes for them to reach.”
Specifically, Israel’s transfer to cancel work visas for greater than 170,000 Palestinians within the West Financial institution has alarmed observers, together with U.S. Treasury Secretary Janet Yellen. She urged Israeli Prime Minister Benjamin Netanyahu to reverse the transfer and ease different monetary constraints on the territory in a letter late final month, and described these actions as “important for the financial well-being of Palestinians and Israelis alike” throughout a press convention at a current G20 assembly of finance ministers.Â
Israel has additionally been withholding some tax income funds collected from the West Financial institution, and historically “distributed again to the Palestinian Authority, which used it to fund its working funds,” The New York Occasions stated. Israel collects the import taxes as a result of the Palestinian Authority “doesn’t management its personal borders,” stated The Economist, and people funds “account for 64% of [the PA’s] whole income.” Israel’s present coverage of withholding some tax income from the West Financial institution has dealt a “mortal blow to the PA’s financial system,” Haaretz’s editorial board stated. As an occupying entity, Israel has an “obligation to keep up stability within the West Financial institution, in addition to an curiosity in doing so,” it continued, noting the lack of greater than $800 million in home month-to-month income attributable to the absence of Palestinian employees. In the end, the board argued, Israel ought to enable a “managed entry of Palestinian employees” that, whereas mutually helpful, will most significantly “allow West Financial institution Palestinians to earn a dignified residing.”Â
What subsequent?Â
Wanting forward, there may be hope the West Financial institution’s as soon as thriving IT sector can “buck the broader development of financial slowdown throughout the Palestinian territories,” Context stated, whilst corporations initially noticed enterprise “grinding to a halt” within the battle’s early phases.Â
Extra instantly, Yellen welcomed the information that some frozen tax revenues from Palestinians within the West Financial institution have “began to circulate” again into the territory to “fund fundamental companies and to bolster the financial system within the West Financial institution.”
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