Economic pressures and unemployment are increasing in the West Bank, with daily Israeli incursions into Palestinian cities and villages, amid warnings that the situation could get out of control.
The World Bank expects the Palestinian economy to contract by 6% during the current year 2024.
The Palestinians lost 32% of jobs in the West Bank, equivalent to 276,000 jobs, due to the repercussions of Israel’s war on Gaza, as the International Labor Organization reported last December.
waiting
Hafez Ghazawneh in his small shop in Al-Bireh in the occupied West Bank is impatiently waiting for customers. Since the war launched by Israel after the Al-Aqsa flood operation, only a small number of people have bought sandwiches and falafel from him.
Before the war on Gaza, many craftsmen from nearby workshops would come to Ghazawneh’s shop to buy breakfast or lunch.
Agence France-Presse quoted Ghazouneh as saying, “Now they bring their daily meals with them from their homes, because the situation is very difficult for them as well.”
Ghazauneh fears that he will be forced to close his shop if the war continues, especially since his income has decreased over the past three months.
He says that he used to earn about 8,000 shekels (about 2,122 dollars) per month, but these days his work only brings him 2,000 shekels (530 dollars) per month.
According to estimates, about 30% of the population suffers from unemployment in the Palestinian territories, while the percentage before the war was about 14%, says Taher Al-Labadi, a researcher in political economy at the French Institute for the Middle East.
After the outbreak of war, Israel withdrew 130,000 work permits from Palestinians in the West Bank, leaving them without income.
The West Bank, which has been occupied by Israel since 1967, is separated from Israeli territory by a wall, and its 3 million residents cannot go there without a permit.
powerful hit
For his part, the director of the Arab Industries Company for Cleaning and Cosmetic Materials in the industrial zone in Ramallah, Beshara Gibran, considered himself lucky, as he did not lay off any of his 70 employees.
But his business suffered a severe blow after the outbreak of war, as the soap production line made from ingredients from the Dead Sea has been completely closed since last October 7.
In total, the cessation of this production caused a loss of $200,000 in 2023, and it is expected to lose the same amount in 2024 as the war continues.
However, he continues to sell laundry detergents and other household products to the Palestinian market, and “essential products” for homes, keeping the factory running.
Gibran relied on the Gaza market for 20% of his exports, but none of his goods entered the Strip anymore. He explained that transportation costs in the West Bank increased due to the spread of checkpoints and the closure of some towns by the Israeli occupation army.
A suffocating economy
Gibran says, “Sometimes it takes a truck 4 or 5 hours to reach Nablus in the north, and when it arrives, the driver cannot enter the city due to barriers and closures, so he turns back.”
He adds that he now “delivers one truck every two or three days, whereas before, he used to deliver two trucks a day.”
These factors led to a “shrinkage of the economy,” which is now operating at only 50% of its capacity, says Abdo Idris, head of the Palestinian Chambers of Commerce.
With the war, the Palestinian economy was already “suffocating” and highly dependent on Israel, as researcher Taher Al-Labadi confirms.
Although the Oslo Accords in the 1990s preserved “the political status quo,” they promised “economic development” that “would bring the different parties together,” according to Al-Labadi.
But this status quo has been undermined “because of the occupation in the West Bank. With the division of the lands, this economic development has not happened.”
He explains that as a result, in periods of crisis, the Palestinian economy – which is becoming increasingly weak – finds itself “deprived of all its resources, and has a very limited ability to withstand.”
As an example of such dependence, Israel controls the borders of the West Bank, and collects taxes on Palestinian products, which it must then transfer to the Palestinian Authority. However, since October 7, these taxes have not been paid.
Without its money, the Palestinian Authority “has difficulty paying the salaries of its civil servants and its running expenses,” Al-Labadi explains.
According to the Palestinian Ministry of Finance, the occupation is supposed to transfer the value of the tax owed to the Palestinian Authority monthly, amounting to approximately 600 million shekels ($159.2 million), but it has not transferred these amounts since last October.
Israel announced its intention to deduct a percentage of these amounts, which the Palestinian Authority was allocating to its work in the Gaza Strip, but the Palestinian Authority rejected these deductions, which led to the suspension of the transfer of the amounts and their accumulation to reach approximately 1.8 billion shekels ($477.6 million).
The French agency quoted government employees as saying that the salaries of last December had not yet been paid, while last November they received only 65% of their salaries, compared to 50% last October.
Bishara Gibran confirms that “the situation is worse than it was during the second intifada” (2000-2005) and said, “Then we knew what to expect.”
He adds with concern, “From now on, the fear of the unknown is killing us,” and it is impossible to set a budget or sales forecast “because we do not know whether we will be able to go to work tomorrow or not.”