Israel has taken steps to cripple the Palestinian Authority (PA) financially, exacerbating its economic crisis amid global recognition of a Palestinian state. The PA’s economic woes stem from Israel’s withholding nearly 7 billion shekels ($2 billion) in Palestinian customs money and imposing caps on cash deposits, which have led to a shortage of liquidity for Palestinian merchants.
Israel’s actions are part of an ongoing campaign of economic warfare against Palestinians in the West Bank, designed to weaken the PA. The Finance Minister’s threat to revoke the indemnity letter allowing Israeli banks to accept money transfers from Palestinians has added pressure on the PA.
Experts warn that if this measure is implemented, it could lead to hyperinflation and a collapse of the Palestinian economy, as trade would have to go through Jordan due to Israel’s blocking of electronic transactions. The lack of access to banking services has already pushed the economy into crisis mode, with unemployment standing at over 30 percent and public schools only open three days a week.
Israel’s actions are part of a broader strategy to undermine Palestinian statehood and control the narrative on the Israeli-Palestinian conflict. The global recognition of a Palestinian state has emboldened some nations, but others have remained silent, allowing Israel to continue its economic warfare against Palestinians.
This situation is not new; economic warfare against Palestinians has been a hallmark of Zionist colonialism since the 1880s. It is contemptible that the international community stands by while Israel perpetuates human rights abuses and genocide against Palestinians. The global community must apply pressure on Israel to end this chapter of human savagery.
Source: https://mondoweiss.net/2025/09/israel-is-trying-to-collapse-the-palestinian-authority-the-first-step-is-destroying-the-palestinian-economy