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West Bank Faces Economic Crisis as Israel Withholds Tax Revenue and Work Permits

12 0
07.05.2026

Struggle and Solidarity: Writing Toward Palestinian Liberation

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If it had not been stopped at an Israeli military checkpoint in the West Bank, the garbage truck carrying more than 70 Palestinian laborers seeking work would likely have been able to enter Israel without incident.

But on April 13, the driver was held outside the Israeli settlement of Ariel for failure to carry a license fit for the vehicle, and upon further inspection, Israeli border police discovered dozens of workers hiding inside the truck’s garbage compartment, on the verge of suffocation.

The Palestinians were held at gunpoint on suspicion of “attempted infiltration,” according to the Israeli authorities, or in other words, attempting to cross the “Green Line” into Israel without a permit.

But as Haaretz reported, the Palestinian laborers were all unarmed and were only attempting to enter Israel in order to work. They had paid smugglers thousands of shekels in the hopes of passing through the checkpoint, allowing them to earn wages in Israel before returning to their families.

The incident captured the desperation of Palestinians living in the West Bank, who are facing an economic crisis of unprecedented proportions: GDP has contracted by around 17 percent since October 7, and unemployment currently sits at around 28 percent.

Palestinians Observe May Day Amid a Deepening Crisis for Workers

Two factors are at play: Israel’s closure of permit access for Palestinian laborers from the West Bank, and the withholding of Palestinian Authority (PA) revenues by far right Finance Minister Bezalel Smotrich, all of which has brought the economy to a functional standstill.

On the eve of October 7, 2023, more than 100,000 Palestinians from the West Bank held permits to enter Israel as laborers, and even more entered without permits, primarily in the construction and agriculture industries.

Wages in Israel are more than double those in the West Bank, and jobs are easier to find. The longstanding permit policy was just as much an attempt by the Israeli government to capitalize on the cheap labor costs of Palestinian workers.

Since Israel occupied the West Bank after the Six-Day War in 1967, Palestinian laborers have long been an integral part of Israel’s economy, including in its illegal settlements. Many Palestinians built the very settlements that surrounded their home villages, on land that the state had requisitioned.

All of this changed after October 7, when Israel........

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