The Palestinian Economy: A Security File, Not a Development Path

The Palestinian economy is no longer merely a field of numbers and indicators, nor a technical file measured by growth rates or aid volumes. Instead, it has transformed into one of the most dangerous arenas of undeclared conflict. It is an economy meticulously managed between the two extremes of prohibited collapse and forbidden advancement, used more as a tool for security control than a natural developmental path. In this narrow space, Palestinians are allowed to live, but without possessing the conditions for a dignified life or the tools of economic power that could become a lever for liberation and independent decision-making.

Israel, as the dominant power, has never treated the Palestinian economy as a natural right of a people under occupation, but rather as a security variable whose rhythm must be controlled. Extreme poverty is a danger because it generates uncontrollable explosions, and real growth is also a danger because it creates a productive society less susceptible to blackmail and more capable of organized resilience. Between these two limits, the standard of living has been adjusted, natural resources, crossings, and the labor market have been controlled, and the Palestinian economy has been linked to a complex system of dependency that ensures its continuation in a state of “functional survival” without transitioning to a state of historical action.

Despite this, the very persistence of the Palestinian economy, in the absence of sovereignty over land, water, energy, and borders, is a striking paradox. An economy operating without sovereign tools, without freedom of movement for individuals and goods, and under suffocating commercial and financial restrictions, should have collapsed. But it did not. Not because it is structurally strong, but because Palestinian society has, over decades, developed an exceptional ability to adapt and endure, enabling it to maintain a minimum level of social stability within a narrow space where it was allowed to move. However, this resilience has largely remained an individual daily effort, not the fruit of a conscious national economic policy, making it an exhausting resilience without cumulative prospects.

In this context, the Palestinian economy has gradually transformed into a fragile consumer economy, based on salaries, clearing, and foreign aid, while productive sectors have declined, dependency on the Israeli economy has deepened, the middle class has eroded, and unemployment rates have risen, especially among youth. Thus, the economy has been stripped of its developmental dimension, turning it into a tool for permanent crisis management, not a national building project. Even reform attempts witnessed in some stages, as in the experience of Dr. Salam Fayyad, confirmed that the problem lies not only in external constraints but in the absence of a vision capable of intelligently engaging with them instead of merely passively adapting to them.

That experience, despite its limitations and political ceiling, revealed that sound economic management is capable, even partially, of disrupting the logic of control, expanding the margin of movement, and transforming resilience from a defensive state into a cumulative path. The paradox is that the subsequent decline of this approach returned the economy to the square of dependency and crisis management, which confirms that the absence of vision is no less impactful than the harshness of the occupation itself.

This reality is most severely manifested in the Gaza Strip, where the economy has turned into a relief economy, where life is managed on the brink of disaster, without allowing for complete collapse or real advancement. As for the West Bank, a model of “fragile stability” prevails, which ensures security calm but does not open up serious developmental prospects. In both cases, the economy is not a free arena, but a security-managed space, where poverty and growth levels are precisely determined.

From here, the real question is not how to maintain a “viable” economy under occupation, but how to transform it into a resistant economy, built to be a tool for long-term peaceful engagement. Engagement here does not mean the illusion of complete economic liberation, nor jumping over reality, but conscious work within it to reduce dependency, enhance local production, and build self-capacity that accumulates power slowly but steadily.

In this framework, neither the authority alone nor the market alone can be relied upon to build this resistant economy. The modern economic battle is a battle of an entire society, starting from consumption choices, investment patterns, the role of municipalities and unions, all the way to universities and the private sector. Supporting local products, building short production chains, and encouraging cooperative initiatives are not technical details, but forms of daily engagement that quietly accumulate their impact. A resistant economy is not born from a sudden political decision, but gradually takes shape from a network of small decisions, when need turns into awareness, and survival into a project.

Transforming the economy from a security file to a resistant developmental path is not an intellectual luxury, nor a political slogan, but one of the forms of the modern liberation battle. Between an economy managed to stay alive without prospects, and an economy built to be a tool for peaceful engagement that disrupts control and expands the margin of decision, the future and meaning of Palestinian resilience are determined. The question is no longer whether Palestinians can survive, as they have proven that, but whether they can transform this survival into an organized force that deprives the occupation of one of its most dangerous tools of control: controlling livelihoods and the horizon of life.