The Palestinian economy is heavily dependent on Israel for inputs and markets, with small family-owned businesses operating in retail and wholesale trade. Unemployment rates are high, exacerbated by the economic downturn in 2020 due to COVID-19. The Palestinian Authority faces fiscal challenges and is heavily reliant on Israeli transfers. Investment opportunities exist in sectors like tourism, agriculture, and ICT, but legal reforms are needed to incentivize investment. Israeli administrative control over 60 percent of the West Bank creates bureaucratic hurdles, and intellectual property rights regimes are outdated. Efforts are being made to align with international standards, but enforcement remains minimal. The labor force in the West Bank and Gaza is educated, but unemployment rates are high, especially in Gaza. Foreign direct investment is significant, with investments from various countries and companies.

Key Insights

• The Palestinian economy is heavily reliant on Israel for inputs and markets.
• Unemployment rates are high, particularly in Gaza.
• Investment opportunities exist in tourism, agriculture, and ICT sectors.
• Legal reforms are needed to improve the investment climate.
• Intellectual property rights regimes in the West Bank and Gaza are outdated.

Source: 

https://www.state.gov/reports/2021-investment-climate-statements/west-bank-and-gaza/