End Israel’s system of economic apartheid in Palestine
When the International Court of Justice ruled on July 19 that Israel’s policies and practices in the Occupied Palestinian Territories were unlawful, “tantamount to the crime of apartheid” according to the president of the Court, it was a vindication for Palestinians, their allies, and human rights organizations who have been saying the same for decades. For 75 years, Israel’s theft of Palestinian land, its illegal settlement enterprise, and the systemic discrimination against Palestinian citizens of Israel have all contributed to the more extensive apartheid system. Still, they do not constitute Israel’s entire plan to ethnically cleanse the land and deny any form of Palestinian liberation. Too often, the intentional system that economically fragments and dispossesses Palestinians is overlooked.
There is one clear way to describe this system of financial exclusion and institutional sabotage – financial apartheid
This system imposes economic restrictions on Palestinians, marginalizing them and stripping away their economic agency while inhibiting their ability to receive aid, participate in the global economy, and access financial services. It manifests through the manufactured necessity of aid, legal frameworks that criminalize direct and mutual aid, and obstructive, discriminatory policies from private and governmental entities. When placed in this context, there is one clear way to describe this system of financial exclusion and institutional sabotage – financial apartheid
It is nearly impossible for development and rehabilitation to occur against the backdrop of sustained, engineered political and economic destabilization; a fact which precedes October 7 but has stood out in stark relief since. By refusing to provide Palestinians the support required from occupying powers under international humanitarian law and actively obstructing any means to support themselves, the Israeli state has de facto required international actors to fulfill the needs of Palestinians living under occupation. The current crisis in Gaza is not the source of this engineered reliance, and any claim that it is belies Israel’s 17 year Israeli siege and blockade of Gaza (itself a form of economic warfare against Palestinians) which devastated the Strip’s economy. Rather, it has exacerbated this manufactured necessity and underscored how it contributes to the economic marginalization of Palestinians.
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This financial apartheid has forced Palestinians, especially those in Gaza, to leverage mutual aid networks to obtain the necessities for survival. For Americans (including those with family members in Palestine), supporting Palestinians either directly or through these networks carries significant risk. In a report published this past February, Palestine Legal and the Center for Constitutional Rights demonstrated that since the 1960’s, the US Government “has used anti-terrorism law to target the Palestinian movement and supporters and to stigmatize Palestinians as terrorists.” This dangerous and dehumanizing framework used against Palestinians endangers all non-governmental aid efforts. Among the highest profile examples of this risk is the case of the Holy Land Five, who were prosecuted under the “material support” law for donating to Palestinian charities that the US government itself supported.
On top of the potential legal liability, providing aid directly or through mutual aid networks also carries the risk of bank account closures and bans on using money transfer services. Sanctions regimes targeting terrorist financing have incentivized financial institutions and service providers to refuse relationships and dealings with individuals and organizations associated with Palestine. The threat of severe financial penalties has produced an ecosystem where Palestinians and their supporters are excluded under the cloak of prudent risk management.
As a result of their exclusion from traditional banking systems, Palestinians and those who seek to support them are forced to utilize third-party financial services. Yet even with those servicers, systematic practices hinder or outright prevent access. For example, PayPal refuses to provide its services to Palestinians in the occupied Palestinian territories (though it does provide services to non-Palestinians living on illegal Israeli settlements in the West Bank), citing high-security risks, a gross misrepresentation considering Visa, Mastercard, and Apple still provide financial services on the ground. In another example of online financial services being used to obstruct access, Venmo (which is owned by PayPal)closed the accounts of individuals and blocked funds of individuals who donated to Gaza to provide humanitarian support.
These economic roadblocks are not limited to digital-only platforms. Cash transfer services, like Western Union and Moneygram, also participate in the discrimination against Palestinians by blocking transfers and requesting invasive documentation of both senders and recipients. Palestinians and those seeking financial support must provide birth or marriage licenses, property titles, loan and mortgage statements, business registration information, and tax identification. These unique document requirements are only placed on transfers to Palestinians. Additionally, cash transfers to Palestinians have a significantly lower limit on how much can be sent, and those transfers are restricted to be between individuals related by only one degree.
It is important to note that the systems imposing engineered economic instability on Palestinians are not exclusive to those living in Gaza. Tax revenues belonging to the Palestinian people by way of the Palestinian Authority (PA) in the occupied West Bank are regularly withheld by the Israeli government and often used as bargaining chips to extract concessions from both the PA and the broader Israeli government. This tax revenue is also subject to frequent deductions by Israel. Between April and July of this year, the ultra-nationalist Israeli Finance Minister Bezalel Smotrich refused to release the tax revenues, only conceding after the Israeli cabinet approved five illegal Israeli settlements in the West Bank. During this period, only 50-60% of public sector employees received their pay. The impact of political gamesmanship played with West Bank tax revenue on the Palestinian economy is further compounded by, until now, threats by that same minister to completely cut off Palestinian financial institutions from the global banking system, a move which UN experts caution could “paralyze the Palestinian economy”.
Ultimately, the confluence of sustained economic destabilization and legal frameworks that criminalize direct and mutual aid has created an ecosystem that actively inhibits the growth of a robust Palestinian economy. Through this financial apartheid, Palestinians are isolated economically and prevented from taking any substantive steps toward improving their financial situation. The system of economic exclusion that the Palestinian populations in Gaza and in the West Bank are subjected to must be dismantled. It is time for the Palestinian economy to be reimagined and redeveloped.
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