The economy in the occupied West Bank is being dismantled, report says
A new report by the International Crisis Group warns that Israeli restrictions on movement, revenue, and land are dismantling the Palestinian economy in the West Bank, deepening unemployment and instability. The report highlights a 50% decline in private sector business activity and the withholding of billions in tax revenue by Israel since May 2025, exacerbating a crisis for the Palestinian Authority and its 3.4 million residents.
The Palestinian economy in the occupied West Bank is nearing collapse due to Israeli policies, according to a report by the International Crisis Group. Restrictions on movement, withholding of tax revenue, and land seizures are crippling businesses, households, and the Palestinian Authority (PA), which governs parts of the territory. The report, based on interviews with Palestinian business leaders and officials, states that Israeli actions aim to prevent a Palestinian state and extend Israeli control. Since Hamas’ October 7, 2023, attack, Israel revoked work permits for nearly 200,000 Palestinians, removing $400 million monthly from the economy—roughly 25% of its output. Private companies report a 50% drop in business due to tightened movement controls, disrupted supply chains, and economic uncertainty. Unemployment in the West Bank stands at around 30%, with the economy contracting further since the war began. The PA, the West Bank’s largest employer, faces severe financial strain after Israel withheld billions in owed tax revenue and imposed unilateral deductions. No funds have been transferred since May 2025, leaving public workers unpaid and infrastructure—such as roads and water systems—deteriorating. The PA relies on Israeli-collected taxes due to its lack of border control, worsening the crisis. Joost Hiltermann, the report’s author and the International Crisis Group’s Middle East adviser, notes that global attention on Gaza has overshadowed developments in the West Bank. Israeli officials, who control key policies, did not respond to requests for comment. Internal disagreements within Prime Minister Benjamin Netanyahu’s government exist, with settler leaders and security officials clashing over economic management. The report warns that prolonged instability risks fueling greater violence, as Palestinian society endures ‘grinding immiseration.’ Without intervention, the economic collapse could lead to a loss of hope and further destabilization in the region.
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