The UN has found that 2020 was one of the worst years for the Palestinian economy since 1994. Gaza has borne the worst of the economic pain. Last summer, when one sweet factory in Gaza advertised five vacancies, 2,000 jobseekers turned up at the office and 20,000 applied online. Since the pandemic hit, movement to and from the Strip has been virtually frozen, primarily by Israel, but also by Hamas. Decades of Israeli closure, occupation and conflict had already corroded the Palestinian economy and vital infrastructure, particularly Gaza’s. At the end of 2020, unemployment in the Strip stood at almost 49 percent, compared to nearly 19 percent in the West Bank. On Tuesday, international donors to the Palestinian Authority (PA) will gather to discuss Palestine’s socioeconomic situation. It will be a test case for the Biden administration, which has pledged to return the funding that was slashed by the Trump administration. The Ad Hoc Liaison Committee (AHLC), chaired by Norway, comprises the PA and Israel, alongside the EU, UN, US, Saudi Arabia, and other important donors. This takes place against the backdrop of reconciliation talks in Cairo between Hamas and Fatah, which aim to pave the way for possible Palestinian elections. Gaza’s economic suffering is not an unhappy accident. Since the Hamas takeover of the Strip in 2007, Israel has imposed harsh restrictions on the movement of people and goods; sweeping measures it claims are justified by security and which constitute collective punishment of civilians. A united, independent Palestinian economy is impossible: Gaza is cut off from the West Bank market by Israeli restrictions, exacerbated by the internal Palestinian political split. Gaza has no seaport, no airport, and no access to the offshore gas field, while West Bank residents face their own maze of movement restrictions and are denied access to natural resources. The asymmetric model of economic cooperation agreed between Israel and the Palestinian leadership in 1994 stutters on, with Israel collecting Palestinian tax revenue and possessing the power to withhold it. International aid has prevented the total collapse of the Strip, but it cannot address the underlying political drivers. It is well documented that the primary impediment to the Palestinian economy is Israel’s movement restrictions. But the international community does little to pressure Israel to meet its legal obligations toward Gaza — including protecting livelihoods — as the occupying power. Countries have instead opted to deepen their trade flows to and from Israel and sign more and more cooperation agreements. The recent wave of normalization agreements with once-hostile Arab countries adds to the favorable environment for Israel. Meanwhile, Israel continues weaving settlements throughout the West Bank, blocking movement to and from Gaza, fragmenting Palestinian territory beyond recognition, and stifling economic activity. The international community strengthens relations with Israel and continues paying out to keep the Palestinian economy on life support, while Israel undermines and even physically destroys their efforts. This absurd dynamic is audible in the thrum of bulldozers razing donor-funded humanitarian structures in the West Bank — 156 of them in 2020. And, during conflicts with Gaza, Israeli planes have bombed civilian infrastructure, some paid for by donors. Economic growth can only be achieved by ending Israel’s restrictions. Rather than just providing cash injections, donors should harness their diplomatic and economic leverage to push Israel to meet its obligations toward the 5.1 million Palestinians under its control. At a time of acute economic distress for Gaza, the international community should urge Israel to strike a balance between protecting public health and livelihoods. Since March of last year, almost 6,000 Gaza traders, mostly laborers, have been unable to exit to work. Israel justifies this on the basis of health concerns, but it has also been eager to reopen its own economy and willing to allow laborers in from the West Bank when it suits its own economic interests. Thus far, Israel has largely neglected to assist the PA in procuring vaccines for Palestinians, as it is obliged to do. There are reports that Israel may provide vaccines to Palestinian workers from the West Bank; this should be expanded to Gaza. Israel needs to ensure the provision of vaccines not only to protect Palestinian health, but also livelihoods.
Israel has also inflicted deliberate economic harm over the past months. It has banned the entry of fuel and blocked goods from entering, fired on fishermen at sea, and bulldozed crops near to the fence. “It looks like the Israeli military wants us to internalize that living and working in this area is impossible,” one local farmer, Ismail Abu Taimah, told my colleague in Gaza. “We’re facing a stifling economic crisis.” Beyond the pandemic, Israel should remove its long-standing, sweeping restrictions on the movement of people and goods, subject only to proportionate security checks. There is support for easing measures among the Israeli defense establishment, as well as in the southern border communities, which recognize that socioeconomic desperation in Gaza is counterproductive for Israel’s security. The international community can do more to put pressure on Israel to facilitate this. Israel should allow in “dual-use” goods that are essential for economic activity, particularly in the fishing and agriculture sectors. Israel should also remove restrictions on the exit of goods, especially agricultural products and “processed” foods like snacks. The food sector was once an important industry in Gaza, but today producers cannot sell their products in their nearest market — Israel or the West Bank — without enduring an expensive and labyrinthine bureaucratic process. Tuesday’s donor meeting will center on long-anticipated and long-postponed development projects and pledges of donations. But, so long as Israel imposes mobility restrictions and the occupation continues, and without access to natural resources, Palestine’s economy will continue to hemorrhage. Donations from the international community can only ever be a tourniquet. The international community must seize the moment to challenge Israel on its policy of inflicting harm on the Palestinian economy as a weapon of war.