2023-12-20 09:24:07
Since October 7, the Palestinian economy has been virtually at a standstill, warns the World Bank, completely asphyxiated by the war and the decisions of the Israeli government.
In light of the bombings which are destroying and mourning the Gaza Strip, the difficulties endured by the three million Palestinians living in the West Bank seem light to them. However, it is a severe economic crisis which is hitting all territories, estimates the World Bank. The damage to human lives, destruction of infrastructure and general decline in income is on an unprecedented scale, its experts say.
Instead of the 3% growth expected this year, the GDP of the Palestinian territories is expected to decline by 3.7% in 2023. Purchasing power had recovered since the end of the pandemic, but these gains are now completely erased by three months of war. Poverty once again affects more than a quarter of the population, it exceeds the peak reached in 2020, at the height of Covid.
Gazan workers suddenly jobless
The day after October 7, Israeli authorities suspended all work permits granted to residents of the territories. There were around 200,000 working for Israeli companies, mainly in agriculture and construction. 20% of Palestinian workers thus find themselves deprived of income, without any compensation from their employer or the Palestinian authority. Tourism is also at a standstill. Due to a lack of visitors and enthusiasm, the city of Bethlehem preferred to cancel the Christmas celebrations. Seventy hotels are closed, thousands of employees find themselves unemployed in the middle of the high season, a period which generates around two thirds of tourism revenue.
The virtual paralysis of the economy has caused consumption to fall, the turnover of certain stores has fallen by half. Israeli army controls, movement restrictions and insecurity linked to settler attacks are stranding tens of thousands of Palestinians in their homes, preventing them from going to work. Truck drivers continue their activity at a slow pace, Ramallah taxis hardly dare to venture outside the city.
Economic paralysis
Deprived of tax revenues, the Palestinian authority is today unable to pay civil servants. Salaries were not paid in October or November. Because the Israeli Minister of Finance is blocking the payment of taxes that the authority collects on imports made from the Israeli port of Hashdod. This normally represents 64% of its revenue. With the fall in economic activity, the authority lost 80% of its revenue. And for the moment, the Gulf States are of no help. Neither do traditional landlords. Because of corruption, they now concentrate their payments on investments and almost no longer cover the operating budget of the Palestinian authority.
Only emergency humanitarian aid is distributed via the World Bank. Until now rather well administered, Palestinian banks are today in danger. The rate of blank checks has more than doubled and banks fear the consequences of the massive destruction in the Gaza bank. Loans granted to those who wanted to build or buy their homes will probably never be repaid. We are talking about a total debt of one billion dollars.
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