The Economy

by EA Cassie    –    6 min read

‘From the military control of imports and exports, to the restrictions on land access and work travel, to the destruction of olive groves, water springs and many other means to livelihood – the Israeli occupation has suffocated the Palestinian economy and led to widespread unemployment. This leaves many Palestinians forced to work in Israel or in Israeli settlements, building away their own futures, with little to no employment rights.’ (EA, Sara)

In its report in October 2019, the UN Conference on Trade and Development repeatedly states that the Israeli occupation of Palestine hinders economic development for the Palestinian people and territory. Israeli control of the movement of goods and people, as well as control of natural resources, make economic growth extremely difficult for Palestinians.

A Palestinian farmer awaits authorisation from the Israeli military to access his farmland

Palestinians living in the West Bank are limited when it comes to economic potential:

(Source UNCTAD 2019, Catalyst 2019, PCBS 2019)

Unemployment rate in…

Palestine:    25%

Palestine 25%

United Kingdom:    4%

Palestine 4%

Over one third of Palestinians employed in the private sector are earning less than minimum wage

Palestine:    > 35%

Jordan 35%

United Kingdom:    7%

Jordan 7%

Women’s participation in the paid workforce

Palestine:    21%

Israel 21%

United Kingdom:    72%

Israel 72%

‘Israel uses us as a company. They herd us into our open air prison. They make us buy their products. We are cheap labour. We build their settlements; they take our quarries and our water; even the cows in Israel have more water than us.’

Abdullah, South Hebron Hills

Over 25 years after the Oslo Accords were signed – intended to be a temporary measure to last 5 years – Israel retains control of Palestine’s economic borders, leaving Palestinians with limited access to affordable goods and services.

As part of the Oslo Accords, the Paris Protocol (1994) established an economic customs union between Israel and occupied Palestine, as well as a shared external border. The agreement gave Israel sole control over the external borders and collection of import taxes and VAT, and international trade would be conducted through Israeli air and sea ports, or through land border crossings controlled by Israel.

In the agriculture sector for example, Palestinian farmers are not able to import certain fertilisers, which would be more effective. According to the World Bank, this has resulted in ‘lower land productivity in the Palestinian territories, in comparison to Israel, amounting to, on average … only 43 percent of the yield in Israel, per dunum [1000 square meters], despite nearly identical natural environments.’ Palestinian farmers also report difficulty obtaining licences for pesticides and water treatment solutions which means they struggle to grow produce which can meet certain market standards.

Palestinians ‘cannot meet European export standards or grow produce that is competitive in regional markets’.

World Bank Economic Monitoring Report 2019

Palestinian farmers assess their land before starting their work day. Fawsi (pictured centre) reports that it is frequently too dangerous to farm his fields due to violent attacks from Israeli settlers.

The Palestinian olive harvest is the most important time of year for the Palestinian economy, yet many farmers face access restrictions and destruction of their trees by Israeli soldiers and settlers.

The ongoing occupation, with an economic framework that was intended to be temporary, results in Palestinians today suffering from the restriction of movement of goods and severe limitations on their ability to reach international markets.

‘The Palestinian economy has been losing this capacity as the manufacturing sector has stagnated. In relative terms, the share of manufacturing in GDP has dropped from 19 percent in 1994 to around 10 percent currently. This is mainly attributed to the multi-layered system of Israeli restrictions.’

World Bank Economic Monitoring Forum 2019

Despite the West Bank being rich in resources, many Palestinians have to buy back tankered water from Israel, even when the pipes run through their own land

‘The Palestinian people are denied the right to exploit oil and natural gas resources and thereby deprived of billions of dollars in revenue.’


Additionally, Israel controls all water resources in the West Bank and sells it back to Palestinians through its half nationalised, half private water company Mekorot. The lack of control of water significantly impacts the lives and the livelihoods of Palestinians – especially those whose primary income source is agriculture and/or livestock.

Palestinians who are not working in agriculture or raising livestock often seek employment in Israel or in Israeli settlements located in the West Bank, including East Jerusalem. These settlements are illegal under international law, but in some cases provide wages 60% higher than in the domestic labour market (UNCTAD).

‘In attempting to obtain [work] permits, Palestinians face an arbitrary, entirely non-transparent bureaucratic system. Applicants have no way of assessing the chances that their applications will be approved or how soon. Many applications are denied without explanation, with no real avenue for appeal. In addition, permits already granted are easily revoked, also without explanation.’


In order to work in Israel or in settlements, Palestinians need to obtain a work permit from the Israeli Civil Administration. The work permits are issued to the Israeli employers, so Palestinians are permitted to enter Israel only through this specific employer who has applied for this specific work permit. The employer can revoke the permit at any time, and often Palestinians do not find out that their permit has been revoked until they arrive at the checkpoint crossing, having spent several pre-dawn hours waiting to pass through the checkpoint. According to many human rights NGOs, thousands of Palestinians either pay for illicit permits to cross, or are unable to cross because they have been put on a permit ‘blacklist’.

All checkpoints between the West Bank and Israel are controlled by the Israeli military, and tens of thousands of Palestinians cross the checkpoints each day in order to find work. Palestinians have to queue, often for a number of hours, in order to reach their place of work. Israelis living in the settlements in the West Bank, by comparison, use well maintained settler-only highways without having to stop at the checkpoints on their daily commute. In addition to checkpoints between Israel and the West Bank, UNCTAD reports that ‘within the 5,655 km² total area of the West Bank, 705 permanent obstacles restrict Palestinian vehicles and pedestrian movement, including checkpoints, road gates, earth mounds, roadblocks, trenches and earth walls.’

Palestinians have to queue, often for a number of hours at military checkpoints to travel to work.

A Palestinian farmer in the South Hebron Hills works his land.

In this military occupation, Israel retains control of natural resources, revenue from imported and exported goods, and the movement of people and goods throughout Israel and occupied Palestine. Palestinians will suffer from limited economic opportunities as long as the Israeli occupation continues.

‘The prospects for the Palestinian economy are grim because the sources of growth that have propelled it in the last two decades are disappearing, while the constraints imposed by prolonged occupation persist and worsen.’ (UNCTAD)

What does international law say?

'All peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development.'

Article 1, International Covenant on Economic, Social and Cultural Rights, 1966

'The States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right.'

Article 6, International Covenant on Economic, Social and Cultural Rights, 1966

'The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions.'

Article 11, International Covenant on Economic, Social and Cultural Rights, 1966

'Everyone lawfully within the territory of a State shall, within that territory, have the right to liberty of movement and freedom to choose his residence.'

Article 12, International Covenant on Civil and Political Rights, 1966

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