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Palestine is considered as a developing country by the International Monetary Fund. Oil and gas

Palestine holds massive potential reserves of oil and gas. Over 3 Goilbbl of oil are estimated to exist off the coast and beneath occupied Palestinian lands. The Levant Basin holds around 1.7 Goilbbl of oil, with another 1.5 Goilbbl barrels beneath the occupied West Bank area. According to a report by the UNCTAD, around 1250 Goilbbl of oil reserves exists in the occupied West Bank. In the West Bank, according to the Palestinian Authority, 80% of Meged oil field falls under lands of Palestinians.

Masadder, a subsidiary of the Palestine Investment Fund is considering to develop and explore the oilfield in the West Bank. Block-1 field, which spans an area of 432 km2 from northwest Ramallah to Qalqilya in Palestine, has significant potential for recoverable hydrocarbon resources. It is estimated to have a P90 (a level of certainty) of 0.03 Goilbbl of recoverable oil and 6000000000 cuft of gas reserves.

In 1999, natural gas reserves were found in the Gaza Strip. BG Group was granted an exploration license from the Palestinian Authority in 2000. The discovered reserves of gas were lauded as a "gift from God" by Yasser Arafat. Known as the Gaza Marine, the natural gas field, located 36 km from the coastline of the territory, holds between 32 e9m3 to 1 e12cuft of natural gas. It is even believed that, the amount of natural gas present is much more than is needed to power the Palestinian territories.

= Economy = The economy of the State of Palestine is middle income based and is a developing country. As per recent estimates by the International Monetary Fund (IMF), the GDP of Palestine is around US$40 billion. It is classified as a middle income / developing country. Palestine is not counted in least developed countries. Major industries are cement, textiles, software, electronics, glass and building materials etc. Major trade partners of Palestine are Israel, Jordan, Qatar, Saudi Arabia and Egypt. Major exported products are cement, minerals, stone and marble, glass, olive oils, iron and steel and plastics.

Due to ongoing conflict and territorial disputes with Israel, the restrictions imposed by Israeli government have made difficulties for multinational companies to invest in Palestine. Large number of Palestinians in diaspora living in Middle East, Europe and America sent remittance to support their family members living in the country. Many Palestinians also work in Israel and paid high.

The economic situation and performance of the Palestinian territories, including East Jerusalem, are influenced by various factors, including political circumstances, regional dynamics, and broader economic conditions. It is important to note that the economic situation in the Palestinian territories has been volatile and subject to significant fluctuations over the years. During the period, from 1968 to 2000, the Palestinian territories experienced various political developments and conflicts, including the Israeli occupation, which has had a significant impact on the economy. While there were periods of economic growth and development, particularly during the 1970s and 1990s, there were also significant challenges and setbacks. The first Intifada, a Palestinian uprising against Israeli occupation, which took place from 1987 to 1993, had a profound impact on the Palestinian economy. The Intifada led to widespread disruptions, closures, and restrictions imposed by Israel, which greatly affected economic activities and livelihoods. Additionally, the signing of the Oslo Accords in the early 1990s brought some economic improvements and hopes for Palestinian self-governance. However, the full implementation of the accords was hindered by various obstacles, including settlement expansions, restrictions on movement, and political disagreements, which impacted the overall economic progress

It is worth noting that economic indicators alone do not capture the full complexity and challenges faced by the Palestinian economy over the years. Political factors, such as the ongoing Israeli occupation and the lack of sovereignty, have had a significant impact on economic development and stability in the Palestinian territories. Therefore, while there may have been periods of relative economic growth, the overall economic situation has been characterized by volatility and dependence on various external factors. The Palestinian economy continues to face challenges related to restrictions on movement, access to resources, and the unresolved political status of the territories.

Palestine is one of most highly educated countries in the world. The literacy rate is more than 95%, which is considered high according to international standards. A large number of universities are located in Palestinian territories, which provides labor capital. Unemployment rate was reduced to 24.10% in 2023. From 2008 to till date, Palestine recorded an FDI of US$ 3.38 billion.

Ottoman Period (1900 – 1920)
Palestine was part of the Ottoman Empire, and the economy was primarily agrarian, with agriculture as the dominant sector. The population engaged in subsistence farming, and there were limited industrial and commercial activities. By pilgrimage visits, Jerusalem was economically well–developed.

British Mandate
The British mandate administration implemented various economic policies, including land regulations, taxation, and infrastructure development. The Jewish population in Palestine started to grow due to increased immigration, and Jewish settlers played a significant role in developing agriculture, industry, and trade. The citrus industry emerged as a major economic sector, with citrus exports to European markets. The Great Depression had a significant impact on the Palestinian economy, leading to a decline in agricultural prices, unemployment, and economic hardship.

There were tensions between the Jewish and Arab communities over land and economic opportunities. The Arab Revolt against British rule and Jewish immigration erupted, resulting in a decline in economic activity, disruptions in trade, and damage to infrastructure. The British imposed restrictions on movement, trade, and industry, affecting the overall economy. World War II brought some economic opportunities, as Palestine became a base for Allied forces, leading to increased government spending and employment. Jewish immigration continued, and industries such as textiles, construction, and food processing expanded.

Economic rise (1970—2000)
During the 1970s and subsequent years, a considerable number of Palestinians sought employment opportunities in Israel. This labor integration provided income and remittances, which had positive effects on the Palestinian economy. Palestinian workers played a significant role in various sectors of the Israeli economy, such as construction, agriculture, and manufacturing. While there were some economic benefits from labor integration, the overall economic disparities between Israel and the occupied Palestinian territories persisted. Palestinians faced limited access to resources, markets, and capital, which hindered their economic development.

Integration into the Israeli labor market provided Palestinians with access to job opportunities that were not readily available in the occupied territories. Palestinians found employment in various sectors, including construction, agriculture, manufacturing, and services. This helped alleviate unemployment and provided a source of income for Palestinian workers and their families. The General Federation of Trade Unions, representing Palestinian workers, was founded to advocate for their rights and interests.

In 1981, Palestine recorded strongest export during its economic growth period. Since 1981, import was doubled to US$1.7 billion. The first Intifada, a Palestinian uprising against Israeli occupation, which took place from 1987 to 1993, had a profound impact on the Palestinian economy. The Intifada led to widespread disruptions, closures, and restrictions imposed by Israel, which greatly affected economic activities and livelihoods. In 1991, the invasion of Kuwait and resulted Gulf War, affected Palestinian economy. Madrid Conference in same year, was held for economic collaboration between Arab countries and Israel.

Oslo Accords, signed in the 1990s, led to the establishment of the Palestinian Authority (PA) and limited self-governance in parts of the West Bank and Gaza. The PA took on responsibilities in areas such as trade, investment, and public services. However, the overall impact on the Palestinian economy was mixed, as the peace process faced setbacks and the Israeli occupation persisted. In 1994, The Paris Protocol was signed, outlining economic relations between Israel and the PA, including provisions for labor movement and employment. Next year, The Israeli government imposed restrictions on the movement of Palestinian workers within Israel due to security concerns. The PA assumed control over some economic sectors, including tourism, trade, and investment by 1995. After few years, by 1999, Palestinian economy experienced a period of relative growth and stability, with increased international aid and improved economic indicators.

Intifada and recovery (2000–present)
The early 2000s marked a period of economic decline and instability in Palestine. The outbreak of the Second Intifada in 2000 led to a deterioration of the security situation, disruptions in trade and movement, and a decline in investment and tourism. The Palestinian economy faced significant challenges, including restrictions on movement and access to resources. Second Intifada (Palestinian uprising) began, resulting in a significant deterioration in Israeli-Palestinian relations, increased violence, and stricter restrictions on labor movement. The military operations resulted in extensive damage to infrastructure, including businesses, homes, and agricultural land.

In 2006, the Palestinian Legislative Council elections resulted in a victory for Hamas, leading to a political divide between Hamas in Gaza and Fatah in the West Bank. This division resulted in additional challenges for the Palestinian economy, including the imposition of sanctions by Israel and foreign governments on the Hamas-led government in Gaza.

From 2008 witnessed some economic growth in the Palestinian territories. The easing of restrictions on movement and access by Israel, as well as increased donor support, contributed to improved economic conditions. World Bank reported an increase in real GDP growth in the West Bank, driven by improvements in the services, construction, and agriculture sectors. The International Monetary Fund (IMF) noted that the West Bank's economy, including Ramallah, had shown resilience and achieved economic growth in the face of challenging political and security conditions. In 2016, Palestinian Authority launched "Generation Palestine," an initiative aimed at supporting entrepreneurship and innovation, which contributed to the growth of the startup ecosystem in Ramallah.

Tech boom (1999–present)
Zika Abzuk, an Israeli engineer, has played a pivotal role in fostering technology investment and integration in Palestine. As a Senior Manager at Cisco Israel, Abzuk has been at the forefront of several initiatives aimed at promoting social integration and technological advancement. Before leading the Country Digitization Acceleration (CDA) initiative at Cisco Israel, Abzuk spearheaded Cisco's Corporate Social Responsibility efforts in Eastern Europe, Israel, Palestine, and sub-Saharan Africa. In this capacity, she successfully implemented several social investments, including a $10 million commitment in five African countries and an additional $10 million commitment in the Palestinian Territories to support the development of the high-tech sector.

Thanks to Abzuk's efforts, the Palestinian high-tech sector went from virtually nonexistent to contributing 6% of the country's GDP. She also played a crucial role in bringing Cisco's Networking Academy to Arab communities in Israel and Palestine, providing technology exposure and access to Arab youth who previously had limited opportunities in the field. In addition, Abzuk initiated a youth program that brought together Israeli and Palestinian students for social activities and learning opportunities. Over the course of 12 or 13 years, the program has seen thousands of graduates, fostering understanding and collaboration between the two communities. Recognizing the potential of the Palestinian ICT sector, Abzuk collaborated with Cisco CEO John Chambers to invest $10 million in job creation and technology development in Palestine. This investment aimed to replicate Israel's successful high-tech industry in Palestine and empower the highly educated Palestinian population. Zika Abzuk's dedication and innovative approach at Cisco have been instrumental in bridging divides and fostering relationships between different communities through technology. Her work has had a significant impact on the integration of Arab youth into the high-tech industry and the overall development of the Palestinian technology sector.

The Palestinian Information Technology Association of Companies (PITA) was founded in 2000, aiming to promote the IT industry and connect Palestinian companies with international markets. In 2011, the first Palestinian startup accelerator, Oasis500, was launched, followed by other programs such as Ibtikar Fund and FastForward. Cisco signed a Memorandum of Understanding (MoU) with the Palestinian Ministry of Telecommunications and Information Technology to support the development of the IT sector. The MoU included initiatives to enhance networking infrastructure, promote e-government services, and provide training opportunities.

In 2006, Intel in cooperation with ARENA, planned to establish a center of excellence at Islamic University, Gaza. Before that, few such facilities were already established in Hebron, Jenin and Jerusalem.

Manufacturing and industry
Due to economic restrictions and presence of checkpoints, movement of goods within Palestinian territories is difficult. The Israeli occupied parts of West Bank also has numerous industries. Though many Palestinians used to work too, but the production value of these regions are not included in total economic estimation. The restriction factor also deters many foreign companies from investing in the country.

Palestine had a strong industrial base in cities of Gaza and Jerusalem. Atarot was a booming industrial zone in Jerusalem for both Palestinians and Israelis. Many Palestinians and Israelis used to work side-by-side in factories of this industrial zone. Multinational companies including Coca-Cola, Israel Aerospace Industries and Mercedes-Benz had their facilities in those regions. Many Palestinians had joint or independent enterprises, not only in Atarot but also allover in the city of Jerusalem. After 1967 war, Israeli settlers developed a large numbers of greenhouses in Gaza. These greenhouses employed Gaza Palestinians and contributed to the national economy. The intifada broke out in September 2000, destroyed Palestinian industrial base of Jerusalem and Gaza.

After intifada, once again industries gained reforms. New industrial zones and high technology parks built in West Bank and Gaza Strip. Recent reforms have seen development of new factories, storage facilities and transportation hubs. Palestinian Authority have developed industrial cities in Gaza, Hebron, Bethlehem, Jenin and Jericho. Focused sectors are cement, electronics, electricals and food products. Few foreign companies have invested in building up facilities in these industrial park. Many of these industrial parks have been developed in joint cooperation between Palestine and other countries such as Germany, Japan and Turkey. A new industrial zone is planned by Palestinian Authority in the Gaza Strip to end unemployment rate.

Hebron is currently the most advanced industrial center of the country. Blessed with mineral resources, quarrying and mining have turned the city into an export hub of Middle East. The city is known for its stone, marbles, glassmaking, mining and quarrying and plastic industries.

Biotechnology and pharmaceuticals
The pharmaceutical industry of Palestine has sustained significant growth. Palestine's largest exports are pharmaceutical and drug products such as penicillin, streptomycin, deriv and dosages. The pharmaceutical industry of Palestine is worth of US$100 million. Palestine have experience a good growth in the field of pharmaceutical industries. Most of the pharma industry are located in West Bank and East Jerusalem. A large number of Palestinian companies have established in field of pharma products. Some popular pharma companies are Jerusalem Pharmaceuticals, Dar Al-Shifa, Birzeit Pharmaceuticals, Beit Jala Pharmaceuticals, Sama Pharmaceuticals and Allison. The pharma industry cater around 60% of local needs and also exports to more than 70 countries.

In 2013, a biotechnology center was established in a joint venture between Korea International Cooperation Agency and Palestine Polytechnic University, with a cost of US$3 million in Hebron. Biotech center contains several research laboratories and training centers, equipped with equipment supporting research on animal cell and molecular biology etc.

Mining and quarrying
Jerusalem is widely known for

Limestone quarries are found in Hebron.

Oil and gas
According to a report by UNCTAD, more than 1,500 billion barrels of oil are located in Palestinian territories of the West Bank and the Gaza Strip. The Meged oil field, according to Palestinian Authority, falls under the land of which, 80% are owned by Palestinians in PA governed areas.

Stones and marbles
Palestine ranks 12th globally in terms of stone and marble production.

The city of Hebron is widely known for its globally renowned powerhouse of marble and stone industry.

Software and telecommunications
Since 2000, software and telecommunication industry have experience a significant growth. This is supported by its close proximity to Israel. Joint economic efforts between Israel and Palestine have top prioritized the software industry. In recent years, a large number of special economic zones including technology parks have been developed between Ramallah and East Jerusalem as well as in Hebron. The IT industry of Palestine contributes about 5% of the state's total GDP in 2010.

Major telecommunication companies of Palestine includes Paltel Group, Ooredoo Palestine and Jawwal. All these companies have their headquarter in Ramallah. In 2019, Jerusalem Foundation inaugurated a technology park named EasTech in East Jerusalem. This is a joint park developed for both Israelis and Palestinians. Multinational companies such as Intel, Intuit, Synamedia, Lightricks, Exlibris, Natural Intelligence, Wix, HP Inc and Unity etc. have invested and partnered in the technology park.

Jerusalem Innovation Park is another technology complex which will house institutions and technology parks. Gaza Sky Geeks is the first and right now only technology park in Gaza Strip which was funded by companies like Google, Cisco and Meta Platforms. This park consists of startup accelerator and training center.

Oil and gas
There is significant reserves of oil and gas in the Palestinian territories. In 2000, oil and gas reserves were found in the coast of Gaza Strip and parts of Palestinian territories. Yasser Arafat referred it is a gift from God to Palestine. Over 3 billion barrels of oil are estimated to be reserved in the coast and lands of Palestine.

According some economic experts and even local citizens, the ongoing conflict's major reason is for Israel to grab the oil and gas resources.

Banking and Finance
The financial sector in Palestine is an essential component of the country's economy, providing crucial services to individuals, businesses, and the overall financial ecosystem. Despite the unique challenges posed by the Israeli occupation, the Palestinian financial sector has made significant strides in recent years. The Palestine Monetary Authority (PMA) serves as the central bank of Palestine and is responsible for maintaining monetary stability, regulating financial institutions, and promoting a sound and efficient financial system. The PMA works to enhance the resilience and effectiveness of the financial sector, ensuring its alignment with international standards and best practices.

Palestine has a diverse range of financial institutions, including commercial banks, microfinance institutions, and insurance companies. Commercial banks play a vital role in providing traditional banking services, such as deposits, loans, and money transfers. They also offer specialized services, including trade finance, project financing, and investment banking.

Microfinance institutions (MFIs) have gained prominence in Palestine, catering to the needs of small and medium-sized enterprises (SMEs) and individuals who may not have access to traditional banking services. MFIs provide microloans, financial literacy training, and support for entrepreneurship, fostering economic development and financial inclusion. The insurance sector in Palestine has also experienced growth, offering a range of insurance products such as life insurance, property insurance, and health insurance. Insurance companies contribute to risk management and provide financial protection for individuals and businesses.

The Palestinian stock market, known as the Palestine Exchange (PEX), plays a significant role in the financial sector. The PEX provides a platform for companies to raise capital through initial public offerings (IPOs) and facilitates trading of listed securities, promoting investment and creating opportunities for investors. Challenges persist in the Palestinian financial sector, including limited access to financial services due to restrictions imposed by the occupation, political uncertainties, and the lack of a sovereign currency. However, efforts are underway to address these challenges and promote financial stability and growth. The Palestinian government, in collaboration with international organizations and stakeholders, continues to work towards strengthening the financial sector, improving regulations, enhancing financial literacy, and attracting investment.

Overall, the financial sector in Palestine plays a crucial role in supporting economic development, promoting financial inclusion, and facilitating investment. Despite the obstacles, ongoing efforts aim to enhance the resilience and efficiency of the sector, contributing to the growth and stability of the Palestinian economy.

Manufacturing and industry
Production was dropped in Palestine since second intifada of 2000. Israeli withdrawal left industries abandoned in Gaza Strip. The disputes over oil and gas field have prevented Palestinians utilizing it. Infrastructure were destroyed by Israel in intifada. All airports of Palestine have now ceased operation. Jerusalem International Airport and Gaza International Airport closed, the latter one was destroyed by Israel in an airstrike during the intifada. Until 2004, Gush Katif Airport was the only functioning airport. Erection of barriers and checkpoints between Palestinian enclaves and Israeli settlements caused economic difficulties. In 2007, a blockade to Gaza was made by Israel and Egypt, which worsen the economic condition.

The 2010 economic reforms improved manufacturing sector. High technology have been supported by its close proximity to Israel. Investment Promotion Agency of Palestine have developed industrial zones at Bethlehem, Gaza, Jericho, Jenin and Hebron. A new industrial city is planned for Gaza Strip, to end its high unemployment rate. Hebron is industrially most advanced city in the Palestinian Territories. Major exports of the country are cement, building materials, iron and steel and electronic devices. Due to presence of militant organizations, their are few defense factories in Gaza, which is often declared illegal by Israel. The first cement plant of Palestine is under development in Gaza. Construction boom in the country have fueled growth of building material industry. In Jerusalem, most of the factories are located in suburban regions of J1 and produces leather, textiles and other traditional products.

Manufacturing sector have huge potential in Palestine. The discovery of oil and gas and other mineral reserves in the region have increased more hopes. For independence and viability of Palestine, East Jerusalem is very important. The Israeli occupation of East Jerusalem have affected city's Palestinian economy. Palestinians expect negotiations which also includes East Jerusalem. However, the recent reforms have also increased Palestinian presence in Jerusalem. A large number of shopping malls, technology parks and industrial zones by Palestinians have come up in Jerusalem, in both occupied area and Palestinian controlled areas

Building materials and cement
Recent construction boom have resulted a growth in building material industry, specially concrete and cement manufacturing. Jericho is home to the country's first cement plant.

Oil industry
First time, oil was discovered in Palestine in 1921. Around 1.5 billion barrels of oil is found in Gaza Strip. According to a UNTCAD report, around 1,250 billion barrels of oil is located in the occupied territory of West Bank. Around 80% of the Meged oil field falls under the lands owned by Palestinians as per the Palestinian National Authority. Israel began drilling and extracting oil, which created disputes between Israel and Palestine.

Automobile
Before intifada, automobile industry had their presence around the city of Jerusalem, where industrial zones were developed around Bir Nabala and Al-Eizariya to house factories, manufacturing automobiles and tires. Mercedes Benz had a large manufacturing plant and R&D center in Atarot industrial zone of Jerusalem, where many Palestinians used to work and had joint enterprises. Bir Nabala was a booming industrial zone, with large number of tire factories. After intifada, erection barriers have affected the automobile industry. Now only two tyre factories are remaining in Bir Nabala.

High Technology
The tech boom in late 1990s, helped recovering economy after the intifada. Palestinian technology industry is mainly supported due to its close proximity to Israel. A lot of Israeli entities, backed by European and American corporates have been working with Palestinian enterprises. High tech industry, specially outsourcing have fueled economic growth. Palestine have emerged as an outsourcing hub in the Middle East for European and American companies. The It industry of Palestine, contributes around 5% of the total GDP.

Companies including Alcatel-Lucent, Natural Intelligence, Hewlett-Packard, Microsoft Corporation, Ericsson, Oracle Corporation, Nvidia, Mellanox Technologies Freightos, Volvo and Cisco have been outsourcing with Palestinians. Ramallah, East Jerusalem, Hebron and Gaza have emerged as a hub for technology industries in Palestine. Rawabi have been developed a high–tech city, to accommodate technology companies. Palestine India Techno Park in Birzeit was developed in cooperation with India.

Tourism
Tourism, specially religious tourism have a huge potential. Due to rich culture and heritage and religious significance of cities have attracted a large number of tourists towards Palestine. Due to disputes, travelling of peoples is monitored and controlled by Israeli government.

East Jerusalem–Ramallah–Bethlehem
East Jerusalem has been affected since second intifada. Due to which, many enterprises moved to neighboring city of Ramallah. However, in recent years, the growth of tourism and technology industry has revived Palestinian presence in the city. Due to occupation, Palestinian enterprises in Arabian neighborhoods which are now a part of Israeli municipality pays taxes to Israeli government. Though, many Israeli delegations have collaborated with Palestinians of East Jerusalem in the field of technology industry.

Areas like Beit Hanina, Sur Baher and Kafr Aqab which came under control of Palestinian Authority, have made economic improvement. Palestinian entities either independently or in joint cooperation with Israeli corporates have build a number of industrial zones and technology parks throughout East Jerusalem. Some of them also lies in Palestinian enclaves, whose production will be included in Palestinian economy.

Jerusalem Innovation Park is

Banking and finance
Currently, Palestine don't have its own currency. All what here accepted is Israeli shekel and Jordanian dinar. Due to Israeli restrictions, their is no own currency. The financial sector of the state is mainly concentrated around Ramallah and East Jerusalem. Many banks have their regional headquarters over their.

Two major financial districts are under construction — Rawabi and Nablus Financial Quarter. These two are megaprojects in the Palestinian territories. The cost of development of Rawabi is more than a billion dollar. The project is also partially funded by Qatari government. It is the first planned Palestinian city located just outside of Ramallah.

International trade
Due to surroundings by Israel, Palestinian territories' largest export destination is Israel.

Economic restrictions
Israel has imposed several economic restrictions on movement of goods and money. The establishment of checkpoints have also caused trouble in moving raw materials for manufacturing. Though few raw materials, such as minerals of

Lack of proper infrastructure
Lack of proper infrastructure is one of the main challenges to the economic growth.

BDS

Political instability and violence
The ongoing conflict and occupation is an obstacle to the growth of economy. Israeli occupied parts comprises 61% of West Bank, known as Area C, which houses Israeli settlements.