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The toll the war in Gaza has taken on the West Bank economy

ARI SHAPIRO, HOST:

More than 11 weeks into the war in Gaza, the Israeli offensive has not slowed. Gaza health officials say an Israeli airstrike yesterday killed at least 70 people in a crowded refugee camp. Israel says it's reviewing the incident. Meanwhile, in the Israeli-occupied occupied West Bank, the economy is reeling. Israel has barred some 100,000 Palestinian laborers from crossing the border to work in Israel, and the Palestinian Authority, which runs some local affairs in the West Bank, has slashed its own workers' wages. As NPR's Frank Langfitt reports from Ramallah, many fear the economic pain could lead to even more violence in the territory.

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FRANK LANGFITT, BYLINE: Muattaz Qatanani used to commute from Gaza to work each day in Israel, where he built bomb shelters - the kind Israelis used to seek refuge from Hamas rocket attacks.

MUATTAZ QATANANI: (Non-English language spoken).

LANGFITT: "I used to make 450 shekels," he tells me - about $130 a day. That's good money by West Bank standards. But when Hamas invaded Israel on October 7, Qatanani fled here to the West Bank. And he hasn't been able to find decent-paying work since.

QATANANI: (Through interpreter) Maybe I get a job once a week to wash stairs, to wash windows. That's how I survive. I work from morning all the way to evening, and I make 150 shekels.

LANGFITT: Or about 40 bucks. After the Hamas attack, Israel banned West Bank workers over security concerns. It's a huge blow. Wages for cross-border workers account for $5.5 billion a year, or one-third of the combined economy of the West Bank and Gaza. That's according to the World Bank.

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LANGFITT: As you walk through the streets of Ramallah these days, you can almost stop anywhere and see the effects of the war on the economy. It's just like everybody here has some kind of story.

I slip into one of Ramallah's many gold jewelry shops. Owner Baha Tamimi says 4 out of 5 people who come to his store these days don't want to buy gold. They want to sell it.

BAHA TAMIMI: (Through interpreter) A woman took off her wedding ring to help her husband pay for the bills and buy vegetables. This happened right in front of me.

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LANGFITT: Nearby, Joudeh Said is cutting a piece of wood in his carpentry shop.

JOUDEH SAID: (Through interpreter) It's very difficult. Maybe I get a job or two, but no one's paying, or they pay very little. They give me a check and then the check bounces, and then I have to chase them.

LANGFITT: Since the war, he says customers owe him $32,000 - again, a lot of money in the West Bank. Per capita gross domestic product here is just $4,500, compared to Israel, where it's nearly $55,000.

How long can your business last under these conditions?

SAID: (Through interpreter) I'm expecting that within one week I will close. In the 1987 intifada, it was not this bad. In the 2000 war, it was not like this. In 2004, it was not like this. In all previous wars, it's never been like this.

LANGFITT: Intifada means rebellion or uprising. Violence is already way up in the West Bank this year. The U.N. says Israel's military has accounted for more than 300 killings. Samir Anati co-owns the carpentry shop. He says if the economy continues to slide, more violence is inevitable.

SAMIR ANATI: (Through interpreter) For sure. I have children to feed. What can I do? I work now and get them food. I may not be able to tomorrow, so it is not me who will go for an intifada. My children will.

LANGFITT: It's not only private businesses that are struggling. The public sector is in trouble too. Israel and the Palestinian Authority are in a dispute over tax money Israel collects for the West Bank and Gaza. And Manal Farhan, the Authority's deputy minister for the national economy, says the government hasn't been able to pay full salaries to its 143,000 workers. They received half pay last month and no pay in October.

MANAL FARHAN: This time it's the worst - the worst hit for our economy since the establishment of the Palestinian Authority.

LANGFITT: Which was in 1994.

Mr. Hulileh, nice to meet you.

SAMIR HULILEH: Nice to meet you.

LANGFITT: Frank, from NPR.

Samir Hulileh is a leading economist and businessman. He worries about the loyalty of the Palestinian security forces if they aren't paid.

HULILEH: You are telling people who have their Kalashnikovs with them, and you are basically telling them, I will not spend money on you. So what's the proposal? It can be a proposal for Hamas to pay money and to buy them out and so on. I mean, you are opening up your security forces in the West Bank for options.

LANGFITT: Khalil Shikaki is a pollster who runs the Palestinian Center for Policy and Research. He's not as concerned about the security forces but worries the West Bank's bad economy is just another ingredient in an already combustible brew.

KHALIL SHIKAKI: Since the start of the war, Hamas' popularity have shot up. The settler violence that is unending, the continued belief of the Palestinians that they do not have a diplomatic alternative to violence - all of this essentially means the West Bank is currently boiling and just waiting for the spark that could eventually lead to a major explosion.

LANGFITT: Shikaki says Israel can help defuse the situation by letting West Bank workers return and showing some commitment to the creation of an independent Palestinian state. But for now, there's no sign of that. Frank Langfitt, NPR News, Ramallah. Transcript provided by NPR, Copyright NPR.

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