JERUSALEM: The Gaza war is speeding up Israel’s “annexation” of the Palestinian economy, say analysts, who argue it has been hobbled for decades by agreements that followed the Oslo peace accords.
While the Israel-Hamas war raging since October 7 has devastated swathes of Gaza, it has also hit the public finances and wider economy of the Israeli-occupied West Bank.
Israel is tightening the noose on the Palestinian Authority, which rules parts of the West Bank, by withholding tax revenues it collects on its behalf, economist Adel Samara told AFP.
Palestinian livelihoods have also been hurt by bans on labourers crossing into Israel, and by a sharp downturn in tourism in the violence-plagued territory, including a quiet Christmas season in Bethlehem.
Samara said that “technically speaking, there is no Palestinian economy under Israeli occupation — our economy has been effectively annexed by Israel’s”.
The Palestinian economy is largely governed by the 1994 Paris Protocol, which granted sole control over the territories’ borders to Israel, and with it the right to collect import duties and value-added tax for the Palestinian Authority.
Israel has repeatedly leveraged this power to deprive the authority of much-needed revenues.
But the Gaza war has further tightened Israel’s grip, Samara said, with the bulk of customs duties withheld since Gaza’s rulers Hamas sparked the war with their October 7 attack on Israel.
“Without these funds, the Palestinian Authority struggles to pay the salaries of its civil servants and its running costs,“ said Taher al-Labadi, a researcher at the French Institute for the Near East.
In February, Norway reportedly transferred to the Palestinian Authority about $115 million from Israel following a deal to release some of the frozen taxes.
Almost all Palestinian workers have also been forbidden from entering Israel for work, driving up unemployment across the territories.
The Palestinian prime minister Mohammed Mustafa bemoaned an “unprecedented financial crisis” during which his government’s deficit had soared to $7 billion, more than a third of the territories’ GDP according to the latest budgetary figures.
– ‘Collective punishment’ –
The Paris Protocol, like the 1993 and 1995 Oslo agreements they were signed under, were meant to be in effect for five years, until the creation of a Palestinian state.
But the absence of a long-term peace deal means it is still governing nearly all aspects of the Palestinian economy.
Investment is also being stifled by the protocol, said Samara, who explained that Israel “controls the land, resources and water sources” of the Palestinian territories.
Before any factory or shop requiring access to these resources can be built in the West Bank, Israel must grant authorisation, he said.
Israel’s stance has become even tougher under far-right Security Minister Itamar Ben Gvir and Finance Minister Bezalel Smotrich, he said, both of whom are settlers in the West Bank.
Critics accuse them of holding Prime Minister Benjamin Netanyahu to ransom by threatening to withdraw the support that gives him a wafer-thin governing majority.
Israeli political analyst Michael Milshtein echoed his take.
“By not allowing Palestinian workers into Israel and withholding Palestinian tax revenues, Ben Gvir and Smotrich aim to overthrow the Palestinian Authority because they view it as an enemy,“ he said.
“It’s a way to collectively punish Palestinians, whom they also see as enemies.”
Milshtein said that before October 7, nearly one-third of West Bank income came from the earnings of the 193,000 Palestinians who worked in Israel, according to Israeli figures.
Today, the number of Palestinians working in Israel has dropped to between 8,000 and 9,000, he said.
– ‘To live in dignity’ –
But Milshtein also pointed to another strain of Israeli opinion, held by centrist minister Benny Gantz and conservative lawmaker Gideon Saar.
They want to allow workers back into Israel to avoid anger sparking an uprising in the West Bank, at a time when Israeli forces are already stretched between Gaza and the Lebanese border, where they are trading fire with Iran-backed Hezbollah.
Milshtein said he believes Netanyahu is probably closer to the Gantz view.
Nasr Abdel Kareem, an economics professor at the Arab American University in the West Bank, argued that the Israeli premier is playing a power game.
“Netanyahu is putting pressure on the Palestinians and signalling to the authority that the levers of the Palestinian economy are in (Israel’s) hands,“ he said.
“Netanyahu believes that he will weaken the authority and make it accept political concessions” when a peace agreement eventually has to be hammered out, he said.
This strategy may be misguided, said Nasr, because it is based on the premise that letting the Palestinian economy flourish would automatically bring peace to the West Bank.
“Historically, previous uprisings broke out” when times were not tough economically, he said, adding that ultimately Palestinians want a state as much as a healthy economy.
“Palestinians want to live with dignity, but for them this also implies liberation and the establishment of a Palestinian state.”
OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.
Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.
The change is scheduled to come into force on Nov. 8.
As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.
The program has also come under fire for allegations of mistreatment of workers.
A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.
In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.
The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.
According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.
The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.
Temporary foreign workers in the agriculture sector are not affected by past rule changes.
This report by The Canadian Press was first published Oct. 21, 2024.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
