For two months, 65-year-old businessman Osama Amro was too nervous to leave the city of Ramallah, the economic heart of the occupied West Bank.
In response to Hamas' deadly Oct. 7 attack, Israel has accompanied the siege of Gaza with a blockade of a different kind in the West Bank: closing checkpoints between Palestinian cities, restricting the flow of goods and work between them, and often leaving people stranded.
“I never left Ramallah for two months and traveled abroad every month,” said Amro, whose businesses include solar farm installation, construction and a mechanic workshop. “I'm afraid to tell you the truth. . .[I]may not be allowed to come back.”
The movement restrictions – accompanied by military crackdowns – are part of a series of moves by the Israeli government in response to the Hamas attack that have severely damaged the West Bank economy. Settlers in the occupied territories have also launched their own attacks. According to the United Nations, more than 300 Palestinians have been killed in the West Bank and East Jerusalem since October 7, mostly by the Israeli military.
Since the start of the war, Israel has almost completely stopped the entry of West Bank Palestinians into Israel to work and has curbed the flow of Palestinian citizens of Israel entering the West Bank to shop. Some Palestinians are also too afraid to move on their own.
People wait to enter Israel at the Qalandia checkpoint outside Ramallah © Spencer Platt/Getty Images
At the same time, Israel has withheld tax revenues it collects on behalf of the Palestinian Authority, which governs parts of the territory.
Israeli officials say the movement restrictions are a response to “imminent Palestinian terrorist threats” against Israelis in the West Bank and that cities formally under Palestinian Authority control, such as Jenin, Nablus and Tulkarem, are “hubs” for militants. “Israel has zero tolerance for terror and will confront it uncompromisingly,” a senior official said.
But the International Labor Organization said this month that the pressure was taking a huge toll, estimating that 32 percent of employment – or 276,000 jobs – had been lost in the West Bank since the war began and that the territory had suffered economic losses of $500 million -dollars per month in October and November.
The measures have also left the Palestinian Authority, which employs tens of thousands of people, struggling to pay salaries and weakened its position just as diplomats struggle to ensure West Bank stability – and while the U.S. and others Countries are pushing for authority to play a central role in Gaza's post-war governance.
“[The economic pressure] “Undermines the PA’s motivations in people’s minds,” said Raja Khalidi, director general of MAS, a West Bank-based economic think tank.
“It creates internal social and political tensions.” . The government’s role as one of the major employers and service providers in the West Bank is increasingly compromised.”
Start-ups, which have less of a buffer than established companies, were particularly hard hit by the economic turmoil. Shadha Musallam, an agritech entrepreneur, lost a key pitching spot at an event she qualified for in Morocco because she could not physically leave the West Bank.
She had hoped to raise $500,000 to keep her startup Agritopia, which develops technology to help farmers, afloat for the next 18 months. Now she says Agritopia could survive the first three months of 2024 – but only if spending is kept to an absolute minimum. She had to postpone collecting agricultural data because attacks from settlers made her afraid to use field workers.
“As a company you have to take advantage of the opportunities that come your way, and because of the political situation I’m missing out on a lot of opportunities.”
Businesses are also struggling to adapt to the decline in the number of Palestinian citizens of Israel coming to the West Bank to shop. Nasr Abdul Karim, a Ramallah-based economist, estimated that Palestinians living in Israel typically spend about Shk1 billion ($277 million) a year, providing a significant source of liquidity.
A woman holds a sign calling for a boycott of Israeli products during a demonstration in Ramallah on Boxing Day © Jaafar Ashtiyeh/AFP/Getty Images
Meanwhile, the Israeli government's decision to reduce transfers of taxes collected on behalf of the Palestinian Authority by cutting the share of funds that would have been transferred to PA employees in Gaza has placed a “very harsh financial burden” on the Palestinian Authority Monetary Authority (PMA), said Abdul Karim.
Paralleling the economic slowdown, the cuts – on top of previous allocation cuts by Israel – have left the PMA “financially paralyzed”, Abdul Karim said, while unpaid government contracts and reduced salaries have exacerbated a “cash crunch” in the territories.
These cuts are part of Israel's response to the devastating attack by Hamas militants from Gaza on October 7, which Israeli officials said killed about 1,200 people and took more than 200 hostage, dozens of whom remain captive. According to health authorities in the Gaza Strip, the Israeli military has also launched a heavy bombardment and ground offensive in the Gaza Strip, killing at least 21,100 people.
A Palestinian inspects damage to a money exchange shop after an Israeli army raid © Zain Jaafar/AFP via Getty Images
The cash crunch is visible in Ramallah, where shopkeepers said customers were spending much less and postponed events such as weddings while more people begged for food.
“Business is down 70 percent,” said a cashier at a family-run candy store who asked not to be named.
Amro has cut the wages of its employees in its garage in Ramallah by 40 percent. He said that before, 10 to 15 cars had to be serviced there every day, but now there are only one or two.
“If the situation continues like this, we will not be able to make the payment [remaining] 60 percent [of wages]”,” he added. “Usually I have more than 100, 120, 150 workers in my projects. Nowadays I have less than 50. And maybe a year or two ago I had 200, 250 workers.”
Recommended
Economist Abdul Karim predicted that if the war continued, economic problems would worsen, leading to “higher poverty rates and pressure on international humanitarian organizations” and the Palestinian Authority.
The hospitality industry is also suffering. “Ramallah has always been very popular for its cafes, restaurants, fast food, good food, lounges, drinks and music,” said Mohammad Khalaf, operations manager at the Royal Court Hotel.
“People stay up at 12 p.m. and go to restaurants. . . a party somewhere. Now it’s all gone.”
Of the hotel's 46 rooms, 42 are empty. Because his few guests are often Palestinians stuck in Ramallah because checkpoints are closed, Khalaf has cut room rates to half their prewar levels. The turnover in the hotel café is a tenth of the normal price.
While other hotels and restaurants closed, the Royal Court decided to stay open so as not to lose staff, Khalaf said. But he had to cut her hours. Asked how long the hotel could continue to operate at a loss, he replied: “Not for long.”
Comments are closed.