The economic growth, rising salaries, and low unemployment that we've enjoyed over the past decade – before the coronavirus outbreak – also had a positive impact on the economy in the Palestinian Authority. Hundreds of thousands of Palestinians earned a living working inside the Green Line, the settlements and the bustling industrial zones on the seam line areas in Judea and Samaria.
Another positive factor on the economy in the PA has been the relative stability of the PA, which survived the Arab spring – unlike strong and stable regimes in the Arab world that collapsed overnight, ushering in a period of chaos, anarchy and economic crises that still linger today as the world copes with the coronavirus crisis and its ramifications.
Similar to the majority of average households in Israel, Palestinian households grew accustomed to living with monthly bank debt, generous credit frameworks and overdraft at low-interest rates in the assumption that the economic prosperity, higher wages, and low unemployment wouldn't disappear in an instant.
And then came the coronavirus pandemic with quarantine directives and restrictions on freedom of movement, completely shutting down and severely minimizing economic activity and markets in the PA, whose economy and financial system are highly dependent on the Israeli economy and market situation.
In a matter of days, hundreds of thousands of Palestinians employed in Israel, the Jewish settlements in Judea and Samaria and the industrial zones, lost their jobs and are not eligible for unemployment benefits that can ensure them a basic means of existence – in contrast to Israelis who are on unpaid leave or were fired and are eligible to receive unemployment benefits from social security.
According to a senior PA official, the Palestinian Authority's economy is almost entirely incapable of enduring such a crisis. Without basic income and economic prospects, self-employed Palestinians and the majority of households in the PA appear closer than ever to collapse.
Such a collapse will occur in the span of a few days, predict concerned senior PA officials, who believe that anarchy and chaos will erupt. Not only in the PA areas but, even more drastically in the congested Gaza Strip – where the healthcare system is all but non-functioning in regular times, let alone the current emergency.
Meanwhile, senior PA security officials believe the devastation of the healthcare and economic systems in the PA and Gaza increases the odds of security incidents and the extreme scenario whereby hundreds of thousands of Palestinians from PA areas and Gaza will look to escape into Israel in an attempt to save their lives and their loved ones.
PA officials say the outcome is inevitable. The question, in their minds, isn't "if the healthcare and economic systems will collapse but when." In light of the fact that more and more cases of infection are being recorded daily in the PA and Gaza, it is only a matter of days until a general outbreak occurs, and when it does it will be Israel that is forced to deal with it.
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