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The Economic Impact of Conflict on Local Businesses in the West Bank

Explore how ongoing conflicts in the West Bank affect local businesses, from economic instability to shifting consumer behavior. Understand the challenges entrepreneurs face and the resilience strategies they employ to survive in a turbulent environment.

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A Dream Diminished: The Impact of Conflict on Local Business

Less than three years ago, Wassif Frahat made a significant investment of $3 million to launch his opulent, two-story restaurant, known as Ali Baba. With its grand pillared entryway, polished stone floors, shimmering chandeliers, and vibrant frescoes adorning the high ceilings, the restaurant symbolized his hopes for a brighter future.

Located just a short drive from the Jalameh checkpoint, which typically allows entry for Israeli Arab citizens into the West Bank, the Ali Baba offers a distinctly Palestinian atmosphere. The region is known for its lower prices compared to Israel, making it a popular destination for both locals and visitors. The checkpoint also serves as a vital passage for Palestinians holding valid permits to access employment opportunities in Israel.

However, following the Hamas invasion of Israel from Gaza on October 7, the checkpoint was abruptly closed. In a bid to weaken Palestinian governance, Israel has withheld a significant portion of tax revenue intended for the West Bank authorities. This decision has led to a severe economic downturn in the northern territories, shattering the optimistic vision Mr. Frahat once held for the future of his business.

The subsequent conflict has wreaked havoc on Gaza, but it has also inflicted profound economic hardship on the West Bank, turning it into an unanticipated battleground in Israel’s ongoing struggle against Palestinian militancy. The Palestinian Authority, which governs parts of the West Bank but has no control over Gaza, is currently only able to pay approximately 50 percent of the salaries owed to its estimated 140,000 employees. Overall, the West Bank, home to around three million people, has seen a staggering loss of 144,000 jobs since the onset of the conflict, with an additional 148,000 Palestinians employed in Israel losing their positions, according to data from the World Bank.

Mr. Frahat, who once employed 53 people at his restaurant and an additional staff at an older establishment in the city center, now faces a grim reality. “Currently, I only have 18 employees because our business has plummeted by 90 percent,” he lamented, highlighting the dramatic shift in circumstances that has left many in the community struggling to survive.

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