Economy of Palestine

Economy of Palestine Last updated on Thursday 22nd April 2010

Following the Israeli occupation in 1967, the West Bank economy has been utterly disrupted. From its traditional agricultural base, the area has become more and more reliant on jobs in Israel. Palestinians have gone into Israel for both skilled and unskilled work, particularly in the construction industry. Palestinians have also been employed in the Arab oil states and income from those sources accounts for a healthy infusion of foreign currency into the West Bank and other areas.

When the intifada began in 1987, access to jobs in Israel became less and less sure because of strikes called by the Palestinian leaders and because of curfews imposed by Israel. In need of income and with time on their hands, Palestinian workers returned to agriculture -- often rehabilitating and enlarging their farm lands.

The end of easy access to employment in Israel for Palestinians and Israeli employment of foreigners to replace Palestinians have resulted in individual hardship and considerable collective loss. The situation has been worsened by the sudden decline in income from the Arab oil states; Palestinians there lost their jobs and were often expelled in retaliation for Arafat's support of Saddam Hussein during the Gulf War. Direct financial aid from the oil states to the Palestinians has also fallen for the same reason. The Israeli policy of closures and cordons of several Palestinian cities and areas since the beginning of al-Aqsa Intinfada makes it impossible for many Palestinian workers to get to their work; the rate of unemployment is very high in the Palestinian-controlled areas under closure and the daily living of many families is badly affected.

All these factors have given rise to a dangerous level of unemployment which must be addressed and solved if the Palestinian state is to attain economic viability.

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