Financial Crime World

Israel’s Illiberal Turn Spells Trouble for Palestinians

Unprecedented Levels of Violence and Destruction

In a year marked by unprecedented levels of violence and destruction, Israel’s occupying forces demolished over 953 Palestinian structures in the West Bank, including water cisterns, homes, and agricultural buildings. The devastating impact of these actions has been exacerbated by a severe fiscal crisis facing the Palestinian Authority.

Fiscal Crisis Deepens

According to a recent report by the United Nations Conference on Trade and Development (UNCTAD), the Palestinian Authority’s debt has ballooned to $3.5 billion, with public employees receiving only 75-85% of their monthly salaries due to budget cutbacks. The authority is now forced to accumulate arrears, which are unsustainable in the long term.

Occupation’s Crippling Effect on the Economy

The report highlights the crippling effect of Israel’s occupation on the Palestinian economy, including:

  • Restrictions on trade and movement
  • Land seizures
  • Deductions from Palestinian revenue These measures have stifled economic growth and eroded the competitiveness of Palestinian producers.

Foreign Aid Decline

The UNCTAD report also notes that foreign aid to the Palestinian Authority has plummeted in recent years, with only $250 million in budget support received in 2022 compared to $2 billion in 2008. The World Bank has described this decline as a “steep fall” and has warned of severe economic consequences if it is not addressed.

Palestinian Government’s Reform Plan

The Palestinian Government has adopted a comprehensive reform plan aimed at:

  • Achieving economic and financial recovery
  • Strengthening resilience
  • Investing in development However, this ambitious plan requires significant support from donors, which has been lacking to date.

Economic Prospects

Economic prospects for the Occupied Palestinian Territory are dim, with GDP growth expected to decelerate as pandemic-related low-base effects fade. The key impediment to economic development remains Israel’s occupation, which is recognized by international organizations and experts alike.

International Action Required

In light of these developments, it is imperative that the international community takes immediate action to address the fiscal crisis facing the Palestinian Authority and provides meaningful support for its reform efforts. Anything less would be a betrayal of the fundamental human rights and dignity of the Palestinian people.