Worse than a crisis is a collapse. One year after the terrorist attacks carried out by Hamas on October 7, 2023, Gaza is sinking into a humanitarian crisis and the West Bank is on the brink of implosion, with skyrocketing unemployment and a Palestinian Authority (PA) on the brink of collapse. bankruptcy.
The Palestinian economy is suffering a double blow. In Gaza, where half of the households no longer have any source of income, prices have increased by 250% in one year due to goods arriving in dribs and drabs and the exorbitant cost of transportation. In the West Bank, where the population has been sinking into poverty since October 2023 and has never needed more support, the coffers of the Palestinian Authority are empty, because Israel, which collects customs taxes from Palestine and must pay them every month, retains part of it .
The amounts and reasons given vary depending on the month. Israel highlights the cost of supplying water or electricity and also wants to deduct payments made by the Palestinian Authority to the families of Palestinians detained in Israel or killed in attacks against Israelis.
“Unfortunately, these deductions are completely arbitrary.says Rami Al Azzeh, an economist at the United Nations Conference on Trade and Development (UNCTAD). Each month they represent between two-thirds and three-quarters of the funds allocated to Palestine. » Since October 2023, these monthly deductions have reached an average of 500 million shekels (120 million euros), compared to 200 million shekels previously, halving the Palestinian Authority’s income, according to calculations by the World Bank. In early 2024, payments were also delayed. “The budget crisis has reached unprecedented levels in 2024, largely due to increased Israeli deductions from the Palestinian Authority’s income”notes the World Bank, which is concerned about a “system collapse”.
Clashes with extremist settlers
Palestine depends on Israel for its survival. The Jewish State represents 64.1% of its foreign trade, because, according to Rami Al Azzeh, “The administrative and transportation costs are such that it is very difficult to export to anywhere other than Israel, where most Palestinian products must transit anyway.” It also depends on the Israeli currency, the shekel, and its banking system for international payments. Lastly, it depends on your job market. The International Labor Organization estimated that 22% of Palestinian workers were employed in Israel before October 7, a figure that has since fallen to 2.3%.
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