Middle EastAnalysis

Israeli restricitions ‘cost Palestinian economy €50bn’

UN report says ending Israeli occupation of the West Bank and East Jerusalem is critical for economic growth

Israeli restrictions in the West Bank have cost the Palestinian economy $50 billion by blocking growth between 2000 and 2020, according to a report by the United Nations Conference on Trade and Development (UNCTAD).

The report says that ending Israel’s occupation of the West Bank and East Jerusalem “is critical for the sustainable development of the Occupied Palestinian Territory because it will enable the Palestinian people to grow their economy severalfold”.

The report, titled Economic Costs of the Israeli Occupation of the Palestinian People, estimates an annual loss of $2.5 billion (€2.4bn), which is “equivalent to three times the West Bank GDP [Gross Domestic Product] in 2020 and over 2.5 times the [entire] Palestinian GDP in the same year.”

Sixty per cent of the West Bank and the entirety of East Jerusalem are under full Israeli civil and security control. They contain more than 200 Israeli settlements – deemed illegal under international law – with a population of 620,000. Since the 1967 occupation, subsidies and tax breaks have encouraged Israelis to settle in these territories.


Settlement boundaries incorporate 70 per cent of the land in this area, preventing Palestinian development. This area includes, according to the report, the largest and only contiguous part of the West Bank and has the most fertile land and valuable natural resources. UNCTAD estimates that the annual settlement contribution to the Israeli economy is $41 billion, while the cost to Israel of maintaining the occupation and planting settlers is a fraction of this figure.

Palestinian access to the non-contiguous 166 enclaves comprising the 30 per cent under Palestinian Authority administration “remains heavily restricted”, says the report. Palestinian access to all of the West Bank and East Jerusalem “is necessary for the sustainable development of the Occupied Palestinian Territory and for the emergence of a viable, contiguous Palestinian State based on the two-state solution, in line with relevant UN resolutions”.

The report says that “until the occupation is ended, foreign aid and donor support to the Palestinian people must be strengthened to avert future socioeconomic and humanitarian crises”. However, the war in Ukraine has reduced funding.

UNCTAD’s report is bolstered by information on the situation published by international agencies and Israeli human rights organisations.

The World Bank has put the poverty figure for the West Bank population of 2.7 million at 13.9 per cent. The Association for Civil Rights in Israel revealed that “poverty rates in Jerusalem – with 358,804 Palestinians – are the highest in Israel.”

Since 2017, about 75 per cent of Palestinian families have lived below the poverty line.

The Israeli government press office did not respond to a request for comment on the report.