Israel’s ‘economic peace’ is hollowing out the Palestinian economy

Bennett’s initiative to entice Palestinians to work in Israel’s high-tech sector will make it harder for the struggling Palestinian economy to stand on its own two feet.

Sam Bahour
6 min readDec 30, 2021


Startup accelerator Flow’s office space in Ramallah (Ozy)

ISRAELI PRIME MINISTER Naftali Bennett may have brought about Benjamin Netanyahu’s defeat and created Israel’s most diverse government, but governing is more than electoral gymnastics. It comes down to policies, and Bennett is revealing himself as a polished Netanyahu: right-wing in direction, expansionist in desire and openly defending settler violence towards Palestinians.

The Palestinian economy is currently front of mind for Bennett, who has proposed “shrinking the conflict” under which Israel will take measures to assist its struggling economy while maintaining the military occupation; a new and improved form of Netanyahu’s failed “economic peace”.

Although this initiative has received wide media coverage, nearly all of it has ignored the fact that it recognises Israel as the chief controller of Palestinian economic planning and development, followed by acquiescent foreign state donors enabled by the US, with Palestinians a distant last in the pecking order of influence.

Within this power grid, one of the Israeli government’s key focuses of the “economic peace” is the Palestinian technology sector.

One of the first Israeli cabinet decisions in November stated that “500 Palestinians will be able to receive permits to work in the high-tech industry in Israel in the next three years, […] according to Israeli media.” ( JPOST)

These 500 new permits come on the heels of tens of thousands of work permits issued to Palestinian workers so they may enter Israel to benefit the Israeli economy, leaving Palestinian firms with a second and third-tier labour pool. Palestine’s IT sector is just the most recent beneficiary of this Israeli “generosity”.

Before the IT sector, a critical mass of construction, agriculture, and manufacturing workers were all enticed away from the Palestinian economy to serve Israeli economic interests, including the building of illegal settlements (such as in Gush…



Sam Bahour

Writer, businessperson, activist.