Two Years Later: What Does Continued Israeli Control Mean for Palestine’s Economy?
As-salamu alaykum, brothers and sisters. Experts say that even if peace returns to Palestine and the current conflict in Gaza ends, Israel will likely continue to control much of Palestine’s economy. True independence and the ability to make economic decisions will only come with the establishment of a sovereign Palestinian state.
Naser Mufrej, a professor of finance and economics, shared that the situation in Gaza and ongoing negotiations won’t bring major improvements to Palestine’s economy anytime soon. He explained that Israel is expected to keep enforcing restrictions that prevent economic recovery, at least for the next few months.
However, if a just peace is achieved and a strong, independent Palestinian state is formed, this could open the door for economic growth, increased investments, and more optimism among donors and citizens alike.
Raja Khalidi, who leads an economic research institute, mentioned that a free Palestine would become a strong player in the region, with competitive industries like agriculture, services, and banking already present in the West Bank.
Currently, Israel controls many aspects of Palestine’s economy, including movement of goods and people, tax revenue, and monetary policy, as the Israeli shekel remains the main currency. Since the Gaza conflict began, Israel has withheld tax revenues, putting further pressure on the Palestinian Authority’s finances, impacting its ability to pay public sector salaries.
Economic activity in Gaza has nearly stopped, and the West Bank’s economy has also suffered due to increased movement restrictions and closures. Palestinian workers have been denied access to jobs in Israel, cutting off vital income.
Reports show that these restrictions have caused the West Bank’s economy to shrink dramatically, wiping out years of progress. Many small and medium businesses have seen sales drop and had to cut jobs.
While some countries have formally recognized Palestine, experts say this is mostly symbolic without true sovereignty over land, which remains the key missing factor for an independent Palestinian state.
May Allah (SWT) grant peace, justice, and prosperity to Palestine and her people. Ameen.
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