Across the West Bank, olive harvesting season is drawing to a close once again. But this year, the usually joyous occasion has become grimly purposeful because the Palestinian economy, according to some economists, is being held hostage to politics, and is on the verge of collapse.
In the West Bank village of Deir Ibzie, Amal Karajeh and her husband, Basem, comb through the leaves and branches of an olive tree in their front yard.
The plump green olives rain down on the ground, where they're collected in plastic sheets and buckets. Both of the Karajehs have taken time off from their jobs to harvest the olives. She's employed by the Palestinian Authority's statistics bureau; he works for a local telecommunications company.
Amal Karajeh says the government is behind in paying her salary.
"We often eat meat once a month, instead of once a week," she complains. "We cook every other day. We try to lower our standard of living. In order to get by, we borrow money. So when the salary finally comes, it's all owed to other people."
Amal Karajeh says Palestinians are under financial strain, and West Bank society is tense.
"If the government let them, people would explode in its face," she says. "But people are restraining themselves, because of the land and because of the olives. Before, employees just waited for their salaries. That's the wrong strategy. They must go back to farming the land. They must depend on themselves."
Her husband, Basem, explains that most of the family's more than 100 olive trees are next to the Israeli settlement of Dolev. He says that since the second Palestinian uprising in 2000, the Israelis have only allowed him to harvest and tend to his olive trees once a year. He says that if he watered and pruned his trees more often, he could double the amount of olives he harvests from them. But, he says, it's not worth the risk of being attacked or arrested by Israelis. Recently, there have been reports of arson and tree uprooting by Israeli settlers, unnerving many Palestinian olive farmers.
"Ten or 15 years ago, before the coming of the Palestinian Authority," says Basem, "during the Israeli period, life was easier. Now it's getting extremely difficult. This problem will never be solved," he says, shaking his head.
Khalil Shiha is director general of the Palestinian Agricultural Development Association, which helps Palestinian farmers. He says the olive harvest serves not only as an economic safety net; it also symbolizes his people's ancient ties to the land.
The "olive tree is a symbolic tree for peace and for freedom," he explains. "This is why Palestinians insist on cultivating the olive trees and trying to expand the cultivating of these trees everywhere."
Shiha quotes an old Palestinian saying that as long as a family has wheat and olives, it won't suffer poverty or hunger. To poor Palestinians who spend about half of their money on food, olives that are made into pickles and cooking oil remain essential to survival.
But olive farming and agriculture in general contribute only a tiny fraction of the West Bank economy. Unemployment in the West Bank is around 20 percent, and the Palestinian Authority, one of the area's biggest employers, is running an annual budget deficit of around $1 billion.
Until recently, the Palestinian Authority covered this shortfall with foreign aid and local bank loans. But Tel Aviv University economist Yitzhak Gal says that no bank will loan to the Palestinian Authority any more, and foreign aid has dropped by half since mid-2010, because donors have lost hope of progress in the Israeli-Palestinian peace process.
"They're fed up of pouring more and more and more money, and no hope," Gal says. "Because if Israel is not ready to change this set of impediments, there is no chance for sustainable economic development in Palestine, so they will be dependent on external aid forever."
One of the biggest problems is that Israeli policy forces West Bank Palestinians to import food, fuel and other necessities from Israel at Israeli prices. Israel's per capita GDP of more than $30,000 per year is about 10 times that of the West Bank. Gal says that Palestine ranks among the region's poorest economies.
"Taking into consideration real cost of living," he says, Palestine's economy "ranks much below Jordan, much below Egypt, more or less like Yemen, Sudan, these kind of countries."
But, Gal says, the West Bank's links with the Israeli economy are in some ways a great advantage. The Israeli shekel, for example, is far more stable than any currency the Palestinian Authority could issue.
The problem, he says, is the West Bank's dependence on Israel. For example, the 1993 Oslo Accords authorize Israel to collect sales taxes and duties on imports into Palestine, and then give the revenue to the Palestinian Authority. Gal says that Israel could change this very easily if it wanted to. As an example, he cites the Gaza Strip, which imports more reasonably priced goods from Egypt (or has them smuggled in), instead of from Israel.
But the current arrangement gives Israel political leverage that is hard to give up. On Sunday, Israeli said it would withhold $100 million of those revenues, apparently to punish the Palestinian Authority for successfully upgrading its status at the UN last week. It's this sort of punishment, Gal worries, that could be the final straw for the tottering Palestinian economy.
Because fertilizer and water have to be imported from Israel, it is difficult for Palestinian olive oil exports to compete with Italian, Greek and Spanish exports, although there are a few groups that do, like Canaan Fair Trade.
Under these dire circumstances, the Karajeh family says this year's olive harvest gives them a special sense of freedom and accomplishment. They will take the olives to be pressed into oil. They estimate that this year's crop will yield around 25 large cans of oil, enough for their extended family to cook with for a year, and even a little extra to sell to friends and neighbors.
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