Crisis in Palestinian-Run West Bank Clouds Post-War Gaza Hopes

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(Bloomberg) — The new Palestinian prime minister is a former World Bank executive who has pledged to fight corruption and waste. The Finance Minister worked for PricewaterhouseCoopers. The Ministry of Foreign Affairs is headed by a woman who holds an American doctorate and has deep experience in the field of human rights.

By many measures, the new Palestinian Authority in the West Bank is precisely what the United States and others want for a future Palestinian state capable of extending its rule into postwar Gaza: a modern, technocratic group focused on solving problems.

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But as a series of interviews in the administrative capital, Ramallah, and elsewhere show, the chances of success are low and the reasons are many. Management is bloated and ineffective. The economy is collapsing after Israel prevented 150,000 citizens in the West Bank from going to work and withheld tax revenues needed to pay the salaries of Palestinian public sector employees. Israeli settler violence is increasing.

Farsin Ajabakian, Minister of State for Foreign Affairs, said: “We need someone to tell Israel: This is a terrible situation.” “At the end of the day, people need to find bread and butter on the table.” She added about the new group of leaders: “We all come from prominent positions and left everything to come and put all our energy and effort into getting this work done.”

Read more: Israeli ban on Palestinian workers hurts both economies

Israel launches a devastating attack on the Gaza Strip to disrupt the Palestinian Hamas movement. Prime Minister Benjamin Netanyahu, who leads the most right-wing government in Israel's history, has resisted American calls to allow the Palestinian Authority to extend its jurisdiction over Gaza, and rejects the goal of establishing an independent Palestinian state.

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Once upon a time, the official Israeli position – and even Netanyahu's position – was supportive of the two-state solution. But the nation's rightward drift, coupled with the shock of the October 7 Hamas attacks, has hardened its stance to focus on security. Likewise, since the attack, Palestinians have embraced Hamas, which the United States and the European Union consider a terrorist organization and seeks to destroy Israel.

A poll of 830 people in the West Bank, conducted from March 5 to 10 and published in mid-April, showed dismal satisfaction with 88-year-old Palestinian President Mahmoud Abbas and his Fatah movement (8% and 24%, respectively). ). Hamas support rate is 75%.

“Confidence in the Palestinian Authority is at one of the lowest levels we have ever recorded,” said Khalil Shiqaqi, head of the Palestinian Center for Policy and Survey Research, which conducted the poll.

Read more: Yellen urges Israel to end restrictions that are hurting the West Bank economy

In the West Bank alone, GDP fell at an annual rate of 22% in the last three months of 2023, while unemployment is estimated to have more than doubled to 30%, up from 14% before the war.

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The authorities expect the Palestinian economy as a whole, including the West Bank and Gaza Strip, to continue to decline in 2024 by about 5% after falling by 33% in the fourth quarter. This is very optimistic, according to Ramallah-based economist Raja Khaled, who expects a 25% to 30% contraction this year.

“We are now in free fall,” Khaled said.

The Palestinian Authority no longer receives the portion of tax revenues from Israel that it needs to pay salaries and pensions to employees in Gaza, and says it owes $1.3 billion. The World Bank said in a report issued last February that it is facing an “escalating financial crisis.” It had to cut salaries by up to 60% of pre-war levels.

Washington said that “avoiding a major recession, a significant rise in poverty rates, and a sustained unparalleled shock to the economy” would require halting hostilities in Gaza, providing urgent international aid, and transferring tax revenues to the Palestinian Authority in full. said the based lender.

Ahmed Al-Sudani, owner of a men's clothing store in Ramallah that was deserted during a recent visit, has seen his business decline by 95% since October 7.

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“The last thing anyone would think about is buying clothes now,” said Al-Sudani, who laid off 10 of his 14 employees.

Read more: UN says Gaza reconstruction will cost $50 billion over two decades

Even in the best of times, power will face an uphill struggle. Khaled, the economist, said that the government inherited a bloated administration that includes 25 ministries, dozens of public agencies, and 147,000 government employees who barely provide basic services.

Public discontent escalated after Israel imposed movement restrictions within the West Bank in addition to closing the borders following October 7.

Since then, violence has escalated by Israeli settlers and security forces, who freely enter all areas of the West Bank – including the 20% area nominally under full Palestinian control. Attacks launched by Palestinians are also increasing.

Since October 7, 474 Palestinians have been killed in the West Bank, including at least 10 by Israeli settlers, according to the United Nations, which in 2023 recorded the highest number of Palestinians killed by Israeli security forces since it began collecting such data in 2023. 2005.

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Land confiscation and settlement expansion in the West Bank, where nearly 500,000 settlers live alongside 2.8 million Palestinians, is another major source of friction.

The United Nations says that about 4,000 Palestinians were displaced in 2023 due to the actions of security forces and settlers. This year has already set a new record for land seizures, with Israel seizing some 1,100 hectares (2,718 acres) of West Bank land so far in 2024, more than double the previous annual figure of 520 hectares seized in 1999. , according to the Israeli report. Advocacy group Peace Now.

“It seems that the Palestinian Authority is unable to help Gaza or the West Bank,” said Al-Shaqaqi, the pollster. “I believe that the ability of one man and one government to do anything in light of all these challenges is almost non-existent.”

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