Those who think that the Palestinians live on foreign aid are mistaken. According to the data of the Palestinian Balance of Payments for the year 2021, the share of foreign aid was only 5% of the total resources of foreign currencies, which was repeated in previous years.

The data of the Palestinian government budget resources for the same year also indicated that the percentage of grants and aid reached less than 7% of the budget resources, with a recurrence of this in previous years.

This is something that is added to the greatness of the Palestinian people, who have been sacrificing the lives of their martyrs for decades now in defense of their usurped land, and it was not affected by the struggle of a number of Arab countries to establish relations with Israel in submission to American pressure.

This is evident when he overcame the great impasse in the Palestinian balance of payments, which includes a chronic deficit in the merchandise trade balance that exceeded a quarter of a century without interruption, as well as a chronic deficit in the service trade balance as a result of the deficit in the balance of tourism and the balance of transportation services.

This happened despite the fact that most of the countries in the world that have a commodity trade deficit have a service trade surplus or vice versa, so that the surplus of one of them compensates for the deficit of the other, especially since commodity and service exports usually represent the largest source of foreign exchange in the countries of the world.

Israel's blockade of the Palestinians and its control of the main factors of production limited the ability of the Palestinian economy to provide job opportunities, and this forced the population to abandon work in vital sectors, including agriculture, which was a major source of employment.

Foreign aid half a billion dollars

Despite the conditions of the Israeli blockade, the Palestinian model was able to overcome the deficit of both the trade and commodity balance, through the wages of Palestinian labor in Israel and the transfers of Palestinian labor abroad. These wages and transfers represented 51% of the total foreign exchange resources, and thus enabled it to bridge the The biggest of these is chronic disability.

In addition, other lesser revenues were achieved from some resources, which contributed to achieving a surplus in the total balance of payments in some years, which was necessarily reflected in the formation of foreign exchange reserves amounting to $872.5 million in the middle of last year.

We find that the Palestinian Balance of Payments data for the year 2021 indicates that the merchandise trade balance achieved a deficit of 5 million and 595 thousand dollars, as the difference between exports amounting to 2 million and 299 thousand dollars and imports amounting to 8 million and 254 thousand dollars. Receipts of $8,820,000 and payments of $1,991,000.

Palestinian payments for tourism abroad for treatment, study and trade exceed incoming tourism revenues, which amount to about half a million tourists annually, most of which come from Europe and Asia. Despite this, the total balance of payments resulted in a surplus of $174 million.

This explains the list of foreign exchange resources during the year, which was topped by Palestinian labor wages in Israel with a value of 3 million and 188 thousand dollars, followed by commodity exports with a value of two million and 290 thousand dollars, transfers of expatriate Palestinians amounting to one million and 983 thousand dollars, and foreign deposits and loans with a value of one million and 102 thousand dollars.

Service exports amounted to $822 million, foreign aid amounted to $541 million, capital transfers amounted to $439 million, benefits from Palestinian investments abroad amounted to $307 million, and foreign direct investment amounted to $177 million.

A legalized economic blockade since 1994

Israel's blockade of the Palestinians and its control of the main factors of production has limited the ability of the Palestinian economy to provide job opportunities, and this forced the population to abandon work in vital sectors, including agriculture, which was a major source of employment.

The expansion of settlements also paralyzed the Palestinian economy, with a gap in production costs between the Israeli and Palestinian economies in favor of the Israelis, which increased Israeli exports to Palestine and weakened the competitiveness of Palestinian products.

The occupation’s control of the Palestinian crossings and the borders with Jordan and Egypt contributed to enabling it to disrupt Palestinian trade, exporting and importing, so that the occupying state would be the first trading partner, as 83% of Israeli exports went to it in 2021, and 55% of imports were imported from it.

The United Nations Conference on Trade and Development (UNCTAD) estimated the loss of the Palestinian economy due to the occupation state’s closure of borders and crossings at about $58 billion between 2000 and 2019, as Israel controls the Palestinian borders, natural resources, trade affairs, and monetary and tax policies.

The problem of the occupation authorities strangling the Palestinian economy is due to what is known as the Paris Economic Agreement, or the Paris Protocol to regulate Palestinian economic relations with the occupying state in 1994, including the customs union controlled by the occupation authority within 6 areas regulated by the protocol: taxes, customs, employment, agriculture, industry, and tourism. In addition, it was agreed that the Israeli shekel would be the currency used in the Palestinian territories.

The World Bank had indicated in a 2013 study that the Palestinians could increase their annual gross domestic product by about $704 million if they were allowed to exploit their land located in Area C. The Oslo II agreement in 1995 divided the West Bank into 3 parts, including the area. C, which represents 61% of the area of ​​the West Bank, where the Palestinian Authority handles the medical and educational services for the Palestinians, while the Israeli authorities handle the security, administrative and legal aspects of it.

60% of budget revenues go through Israel

The Palestinian authorities have always tried to break away from the occupation economy by preventing the import of calves and livestock from breeders in the occupying state, as well as transferring the file of medical referrals to Jordanian and Egyptian hospitals, and also stopping the import of mineral water, juices, vegetables and fruits from the occupied territories.

It also tried to import petroleum derivatives from Iraq, but the Israeli authorities responded to that by stopping the entry of Palestinian agricultural products into its markets, and preventing the export of these products through its ports, although it retracted from that after international pressure.

With the Palestinian economy falling within the customs union with the occupying state, the Palestinian Authority applies the same tax rates imposed by the occupation authorities on its citizens, including value-added tax and customs, whether on local or imported goods, despite the large discrepancy between the wage rate in the two economies.

The Palestinian Authority applies the same tax rates imposed by the occupation authorities on its citizens, including value-added tax and customs (Shutterstock)

Israel also delayed paying tax and customs dues that it collected for the benefit of the Palestinian authorities. It is called clearing revenue and accounted for 60% of the total Palestinian budget revenues in the previous year. The Palestinians have always called for changing the Paris Agreement and adopting a new economic framework that achieves the interests of the Palestinian people, but they did not find a special response with The bias of Western countries, led by the United States, to the Israeli side.

24% unemployment rate and higher than Gaza

In light of the incident of shooting at the pioneers of a synagogue in response to the killing of dozens of Palestinians last year and the first month of this year, and the Israeli government’s threat of a violent response, there are concerns about the work of Palestinians in the occupied territories, as the unemployment rate reached 24% in the middle of last year, which is The percentage in Gaza is higher than that. By the end of 2021, the unemployment rate reached about 26.4%, and the rate was 15.5% in the West Bank, compared to 47% in Gaza.

In the middle of last year, Palestinian labor was distributed between 81% in the Palestinian territories and 19% in the occupied Israeli territories. However, the value of wages in the Israeli territories is higher than in the Palestinian territories. At the end of the previous year, the average daily wage in the West Bank was 124 shekels, and in the Gaza Strip 60 shekels, compared to 266 shekels. In Israel and the settlements, despite the difficult conditions in which Palestinians work in Israel and their low wages compared to Israeli labor.

There are also concerns about Palestinian exports, most of which are destined for Israel, and the importance of receiving an Arab side of them to provide resources for project owners, employment, and the population. In 2021, the value of Palestinian exports to Arab countries reached $260 million, of which $188 million went to Jordan, $24 million to Saudi Arabia, and $23 million. Two million for Kuwait, 20 million for the UAE, 3 million for Qatar, one million dollars for Egypt, and less than a million dollars for Morocco, Yemen and Iraq.

In the same year, the UAE's imports from Israel amounted to 384.4 million dollars, Egypt 121 million dollars, Jordan 64 million dollars, Morocco 31 million dollars, and less than that Djibouti, Bahrain, Somalia and Tunisia for their commodity imports from Israel.