Jerusalem: The ongoing Israel-Hamas conflict, characterized by military operations and attacks, has compounded the challenges facing the Palestinian people. They depend on Israel for vital services such as water and electricity, and Israel wields significant control over the Palestinian economy, with a substantial number of Palestinians working in Israel and its settlements.
In early 2022, over 1.5 million Palestinians were employed in Israel and its settlements, constituting one-fifth of the West Bank's workforce. The income of these workers contributes significantly to the West Bank's GDP.
In addition to high unemployment rates, Palestinians grapple with issues like underemployment and low wages. In 2021, approximately 83% of Gaza's workers earned less than the minimum wage, further straining their livelihoods. These economic challenges, coupled with frequent conflicts and bombings, have hindered GDP growth in the Palestinian territories. In contrast, Israel has experienced rapid economic growth in recent decades.
Israeli restrictions on foreign trade exacerbate economic issues in Palestine. A significant portion of goods imported by the Palestinian territories originates from Israel, and over 80% of exports are directed to Israel. Essential resources like electricity, water, and fuel, which constitute a significant portion of these imports, are primarily supplied by Israel. Over 60% of Gaza's electricity is imported from Israel, and the remaining power is generated locally. However, even the diesel used in these local power plants must be imported from Israel.
Water supply remains a critical challenge in Palestinian territories, necessitating the import of water from Israel at a higher cost. Palestinians must allocate a substantial portion of their income, ranging from 8% to 13%, to purchase water. This high dependence on Israel for essential resources leaves Palestine vulnerable, as any disruption in supply, particularly during conflicts, significantly impacts daily life.
Furthermore, a significant portion of the Palestinian population in Gaza relies on international aid, with nearly 80% depending on this support. However, foreign aid, which began declining during the 2010s, reached an all-time low in the 2020s. In 2021, foreign aid accounted for only 1.8% of Palestinian GDP, compared to 27% in 2008.
The Palestinian territories, including the Gaza Strip and the West Bank, face severe socio-economic challenges, with high poverty rates and record levels of unemployment, primarily due to the absence of a robust industrial base. The labor force participation rate (LFPR) in Palestine is one of the lowest in the world.
As the Israel-Hamas conflict persists, these economic challenges endure and may worsen, affecting the livelihoods of the Palestinian people.
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