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West Bank Economy Nearing Collapse 06/15 06:16
RAMALLAH, West Bank (AP) -- The economy in the West Bank is teetering toward
collapse as Israel maintains a web of restrictions that limit opportunities for
Palestinians living under long-term military occupation, according to a new
report from a leading conflict tracker.
The International Crisis Group says that Israeli measures restricting
movement, withholding revenue and taking land are not only crippling the
Palestinian economy but also fueling deep instability.
"The economic conditions necessary for any Palestinian future other than
permanent subjugation are being dismantled," it says.
The report, based on interviews with Palestinian business leaders, mayors
and government officials, details the financial crisis afflicting companies,
households and the internationally backed Palestinian Authority, which
administers cities and towns in the West Bank.
It says Israeli policies suggest a concerted effort to "advance Israel's own
declared goal of extending its control and preventing a Palestinian state from
emerging."
Throughout decades of military occupation, the Palestinian economy has been
hobbled by checkpoints and military gates that curtail movement of people and
goods. Households and businesses have relied heavily on jobs and imports tied
to Israel, and faced restrictions on land and trade. The roughly 3.4 million
Palestinians living in the West Bank today face roughly 30% unemployment and
have seen their economy contract substantially since the start of the
Israel-Hamas war.
After Hamas' Oct. 7, 2023, attack, Israel revoked work permits for most of
the nearly 200,000 Palestinians who had worked there previously. Officials
cited security but in effect, it deprived the Palestinian economy of nearly
$400 million a month, or almost one-fourth of its overall economic output.
Many businesses today are struggling to pay workers, contractors and
suppliers, with private companies seeing an estimated 50% decline in business
since before the war, "reflecting tightened movement controls, disrupted supply
chains and heightened uncertainty," the report says.
"Palestinian society survives, but in a state of grinding immiseration.
Absent remedies, the result will likely be a loss of hope and a growing risk of
instability and greater violence," it says.
As the occupied West Bank's largest employer and service provider,
Palestinian Authority is at the heart of the crisis. Government agencies have
borrowed heavily to stay afloat as public sector workers go unpaid and
infrastructure like roads and water lines crumble. The inability to fund to
public services is keeping patients out of hospitals and kids out of school.
Most of the PA's money comes from taxes collected on goods entering the West
Bank through Israeli ports, because Palestinians do not control their own
borders. But under hard-line ministers in Israeli Prime Minister Benjamin
Netanyahu's government, Israel has withheld billions of dollars in owed tax
revenue and unilaterally imposed deductions on the funds. No transfers have
been made since May 2025.
Joost Hiltermann, International Crisis Group's special adviser for the
Middle East and North Africa, said the world's focus on more than two years of
war in Gaza had drawn attention away from the West Bank, but that changes
taking place now could have arguably wider consequences for Palestinians'
future aspirations.
Hiltermann, who wrote the report, said Israeli officials, who exert
considerable control over many of the policies in question, did not agree to be
interviewed. But he noted disagreements within Netanyahu's government, with
settler leaders and security officials often clashing on how to manage the
Palestinian economy.
"The security establishment doesn't want the Palestinian Authority or
economy to collapse because they would have to assume the burden of governing
the territory in full after essentially destroying it," he said.
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