Palestinian workers are bearing the brunt of the escalating conflict between Israel and Hamas. Thousands of people have suddenly lost all sources of income after Israel suspended their work permits as economic activity slowed in the occupied West Bank due to Jewish state restrictions and settler violence.
Noora Abdeen Khalifeh runs a traditional clothing store in the city of Ramallah. The entrepreneur has struggled to run her business since the October 7 attacks and the Israeli offensive on Gaza.
“Our manufacturing process takes place between the West Bank and the Gaza Strip, where we have a workshop employing 200 specialized craftsmen. But their homes were destroyed along with the items they made. Now our Rafah workshop has become a refuge for displaced people,” says the managing director.
The seamstresses employed in the West Bank are currently mostly unavailable. “With schools closed and children staying at home under the supervision of women, it is impossible for them to engage in work that requires as much concentration as embroidery,” explains Noora Abdeen Khalifeh.
With the offensive on Gaza, economic activity is slowing while tens of thousands of people are out of work since Benjamin Netanyahu’s government decided to suspend work permits in Israel. A measure that initially targeted Gazans before affecting many West Bank workers.
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Customers are scarce in downtown Ramallah and shops in the Palestinian Authority’s administrative capital have been forced to adjust their opening hours to reflect this grim context.
“The shops remain open but close earlier. “It’s a lot less busy than usual,” says Taher Labadi, an associate researcher at the French Institute for the Middle East based in Ramallah. “People from surrounding towns and villages are moving less and Palestinians are moving from the interior [Arabes israéliens] Those who regularly came to the weekend no longer come at all.
“People think twice before going out,” the Palestinian economy expert continues. “There is a risk of ill-treatment by soldiers at checkpoints. There is also a risk of encountering settlers crossing certain roads and shooting at vehicles.”
An “unprecedented” situation
To get around, Palestinian workers prefer alternative routes, sometimes taking long detours to reach their destination. Across the West Bank, travel restrictions imposed by Israel and the climate of tension surrounding settler attacks and army raids are impacting all sectors of the economy.
More than 150 Palestinians have been killed by fire from Israeli soldiers or settlers in the occupied West Bank since the start of the war, which was sparked by the deadly Hamas attack in Israel on October 7, according to the Health Ministry.
“The time of the olive harvest, for example, which is very important for many families, has completely passed. Many could not go to their land because they are near a colony or the separation wall, where there is a direct danger of being shot,” explains Taher Labadi.
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Tourism is stagnating, workers are unemployed, logistics problems for companies are worsening… The economic situation in the West Bank is also suffering from the suspension of work permits for Palestinians in Israel.
According to the International Labor Organization (ILO), 192,700 Palestinians worked in Israel before the war, 40,000 of them in the settlements, attracted by higher wages than in the West Bank, particularly in construction, agriculture or the service sector.
“What should I do? Nobody knows whether we can come back or not. “I don’t know how I can provide for my family,” worries Raed, a Palestinian who has been deprived of work in Israel. interviewed by American public radio NPR.
This brutal drop in income for thousands of workers is having a direct impact on the economy of the occupied West Bank. “People tend to reduce their spending and limit it to the bare essentials. They also resort to their savings and postpone any investments or economically important decisions,” analyzes Raja Khalidi, director of the Institute for Policy Research Economic Affairs of Palestine (MAS).
It is not the first time that Israel has cut off Palestinian workers in times of crisis, but the current situation is “unprecedented” in its extent and duration, says the economist.
A dependent and dependent economy
Even before the Hamas attacks and the Israeli offensive on Gaza, the West Bank was already in a deep financial crisis, which was exacerbated by the Covid-19 pandemic. The internationally underserved economy has been burdened by the Israeli occupation for several decades.
According to a recent UN report, restrictions imposed in Area C of the West Bank cost the Palestinian economy $50 billion between 2000 and 2020.
Also read: Area C, this part of the West Bank that the Israeli right never wanted to let go of
The events of October 7th only made the situation worse. The West Bank could lose three points of GDP this year, according to an official from the Palestinian Authority’s Economy Ministry quoted by Al Jazeera.
“Gross domestic product (GDP) allows us to measure how much all this costs, but says nothing about economic development. In reality, the Palestinian production apparatus has been completely collapsed for years and survives thanks to international aid,” recalls Taher Labadi, emphasizing that the public sector employment rate in the West Bank is 20%. A way for the Palestinian Authority to “redistribute aid and maintain some semblance of an economy.”
Furthermore, without Israel, the Palestinian economy has no room for maneuver. The civil servants’ pay is therefore largely based on the repayment of Palestinian VAT levies collected by Israel, a measure that the Jewish state regularly suspends to put pressure on the Palestinian Authority.
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This situation of forced dependence on the West Bank, where 72% of trade with Israel occurs, resurfaces with each closure.
“With a view to a two-state solution, we have to create the numbers for a Palestinian economy,” explains Taher Labadi. “Except that this economy actually ceased to exist a long time ago.”