How can economic agreements be transformed from a temporary response into a sustainable structural project in Palestine?

After the recent Israeli war reshaped the Palestinian economic and political landscape, employment rates have declined, supply chains have been disrupted, and the productive infrastructure has partially collapsed. This contraction was also due to tightened cash flow, rising shipping and material costs, and decreased overall demand resulting from security restrictions, and it was also a direct reflection of bombing and destruction, where the GDP in 2025 remained 24% lower than in 2023, with weak growth forecasts for 2026. In this context, bilateral and international agreements emerged as intervention mechanisms aimed at absorbing the shock, but they have not risen to the level of restructuring the Palestinian economy or liberating it from the structural dependency entrenched by the Oslo Accords and the Paris Protocol.

Agreements with Qatar regarding the employment of Palestinian labor may represent merely temporary operational arrangements, but they have opened a partial window to an external labor market in light of the blockage in the local market, easing the severity of unemployment, which reached 28.5% in the third quarter of 2025, and mitigating the depth of contraction through new cash flows. The programs of the World Bank and the European Union have focused more on supporting infrastructure, sustainable energy projects, and digital transformation, in an attempt to compensate for the decline in production capacity and reduce pressure on the balance of payments. However, these interventions can be interpreted within the framework of economic stabilization policies rather than long-term development policies; they respond to the shock of war and seek to alleviate its direct effects, without rising to the level of structural policies capable of reshaping the economic relationship with Israel or with the international trading system.

Despite their temporary nature, these agreements open up opportunities that could be leveraged within the framework of economic diversification policies. External labor provides financial remittances and creates the potential for capital accumulation if mechanisms capable of transforming these flows into local productive investments are established. It is worth mentioning that the value of remittances from abroad reached about $735 million in 2024, a sharp drop from $3.2 billion in 2023 and a peak of $4.6 billion in 2022; however, despite this decline, remittances from abroad constituted 16.5% of the GDP in 2025, reflecting continued reliance on external sources.

Support for infrastructure and digital transformation allows for the reconstruction of part of the productive base on more flexible foundations, while sustainable energy projects contribute to alleviating the burden of imports and improving the balance of payments. However, these potentials remain conditioned on how they are managed and the ability to employ them within a vision that exceeds the logic of emergency response.

Yet these opportunities face deep structural challenges. Israeli control over crossings and borders means continued restrictions on the freedom of movement of capital and goods, which weakens any attempt to build a more independent economy. Additionally, reliance on international aid entrenches a state of dependency, rendering the Palestinian economy hostage to fluctuations in international politics. The absence of a unified Palestinian strategy hampers the ability to formulate integrated industrial policies, while political internal division undermines the construction of inclusive economic institutions capable of managing these opportunities.

The opportunities afforded by the new agreements cannot be treated with the same logic that governed conditional financing in past decades. That logic has contributed to entrenching an economy reliant on external flows tied to political agendas, without translating into local capital accumulation or building a sustainable productive base. What is required today is to transform these interventions from exceptional response tools tied to the security and political reality into foundational blocks within a more liberated economic project. This requires converting labor remittances and international grants into productive social capital through independent community initiatives and small and medium enterprises capable of generating local added value. These agreements, despite the immediate opportunities they provide, remain constrained by the framework established by Oslo and Paris and are unable to create real economic independence unless included within a conscious popular resistance vision.

The resistant economic vision is based on the fact that dependency on Israel is a coercive structural dependency, and in the absence of national governmental investment funds or effective governance mechanisms to manage popular capital, the resistant economic action becomes a popular - cooperative act, based on the role of individuals, cooperatives, unions, and the civil sector in transforming financial flows into local productive projects, and institutionalizing a grassroots economy that can be built from the people up to the state, not the other way around.

In the field of the knowledge-based economy, human capital can be invested through technical education, programming, and digital services; these specializations are among the highest in demand in Palestinian universities, yet they also have the highest unemployment rates, as statistics for 2024 indicate that the unemployment rate among IT graduates reaches 48.8%. However, considering that these sectors do not directly depend on physical movement freedom and create high added value through cross-border service economies, they are thus a promising market that can be exploited by building local e-commerce platforms and digital services linked to regional and international markets, with the understanding that the digital infrastructure itself remains subject to Israeli restrictions.

In the agricultural-energy sector, after agricultural added value declined by 93% in the last quarter of 2023, and recognizing what Israel controls of vast agricultural lands and water sources, and the dangers farmers face from settler assaults and land confiscations, it is impossible to speak of smart agriculture or solar energy apart from these constraints. What is needed here is the adoption of community adaptive strategies: small distributed agricultural projects that reduce risk, local cooperatives that collectively manage production, and initiatives for solar energy at the household and community level to reduce dependence on Israeli networks. These solutions do not eliminate the existing control, but they create partial independent spaces that can be built upon gradually.

In this sense, the new agreements become temporary tools for enhancing GDP, not an end in themselves. They are temporary solutions, but if managed with societal awareness and invested within a resistant economic vision, they can transform from reactionary tools to foundational blocks in an independent economic project built from the grassroots up, based on the principles of resilience and not compromising Palestinian economic identity.