[Lyna Ouandjeli] Thank you very much for taking the time out of your busy schedule. I am truly honored to speak with you. I have been looking for someone to discuss Palestine with, particularly its economic and social aspects, and I came across your profile online.
I have a few questions, but I’ll make sure they are concise so you have more time afterwards. Perhaps we could focus on the political economy of occupation and the fragmentation of the West Bank and Gaza. Have you examined Palestine’s social and economic structures beyond the obvious economic costs? To what extent do you think these structures apply in this context? I hope my questions make sense.
[Leila Farsakh] Given the current situation, it is difficult to discuss the Palestinian economy in conventional terms. After nearly 700 days of sustained violence, Gaza’s economy has been almost destroyed and is barely surviving. It has shifted into what can be described as a war economy, with extremely high prices, rampant inflation, and widespread poverty, mostly within an informal sector.
In the West Bank, Israeli policies continue to dismantle Palestinian economic agency, such as through attacks on banks and moneylenders to control monetary flows. Historically, the Palestinian economy has never been fully independent; it has always been tied to Israel. Its autonomy has been limited and conditional, relying on access to Israeli markets, with roughly 70–90% of imports and exports dependent on Israel, and around 80% of Palestinian labor from the West Bank employed within the Israeli economy. Additionally, the Palestinian public sector has relied heavily on international aid, which functionally reduced the burden on the Israeli economy.
[Lyna Ouandjeli] Under international law, specifically the 1907 Hague Regulations, an occupying power has obligations to provide for the occupied population. Israel has consistently failed to meet these obligations, and as a result, Palestine has relied heavily on international aid framed as humanitarian relief rather than development. How do you interpret the long-term effects of this aid on Palestinian autonomy and state-building?
[Leila Farsakh] As long as the economy depends on aid, a viable economy cannot develop. Aid has been essential to sustain the Palestinian population and to maintain governance through the Palestinian Authority. Essentially, aid prevents extreme poverty, which could otherwise lead to unrest.
After the Oslo Accords, reliance on the Israeli labor market diminished and was replaced by international aid. This aid has created a dependency; if it were withdrawn, the Palestinian economy would be far weaker than it is today. Aid serves not primarily to support the Palestinian economy, but to sustain the Palestinian Authority, fulfilling both political and economic objectives. In effect, it subsidizes the occupation by compensating for Israel’s obligations under international law to the occupied population.
[Lyna Ouandjeli] You have repeatedly challenged the idea of partition. Given the fragmentation between Gaza, the West Bank, and the Palestinian diaspora, do you see opportunities to reconstruct Palestinian governance and self-determination beyond the Oslo framework?
[Leila Farsakh] Absolutely. The Oslo framework has effectively collapsed, but people cling to it because it is all they know. Adherence to the Palestinian Authority is seen as a way of asserting Palestinian self-determination. While there is international recognition of Palestinians as a people with the right to a state—recognized by 147 countries—the facts on the ground indicate that no such state exists. Instead, we observe an apartheid system.
The destruction of Gaza signals Israel’s ongoing effort to eliminate Palestinian self-determination. Palestinians face the challenge of creating new political strategies. If they pursue a one-state solution, how can they coexist with those actively seeking their annihilation? If they adhere to a two-state solution, there is no international pressure to compel Israel to retreat. Palestinians are effectively in a limbo: they maintain their presence and resilience, but the creation of a new political project is impossible without the cessation of war.
[Lyna Ouandjeli] In addition, justice must take into account Palestinian memory and identity. Palestinians should not be denied their history or existence. Denial of Palestinian identity undermines any potential path forward. Historical attempts at secular, democratic, anti-colonial political organization—such as Sabri Jiris’ 1979 initiative—remain central to Palestinian political memory. How do you see the legacy of such groups today?
[Leila Farsakh] These legacies are central. Despite nearly 78 years of Nakba, Palestinians continue to assert their rights. The ongoing violence in Gaza represents a modern Nakba, with severe civilian casualties. The international community recognizes Palestinian existence and rights, but Israel continues to act with impunity. Palestinian activism and memory are being revived, though often violently suppressed, as seen in actions in Tulkarem. Political organization and new strategies are impossible while war continues. The conflict must end before any new political framework can be established.
[Lyna Ouandjeli] Comparisons with South Africa and Algeria highlight the challenges of creating statehood after oppression and genocide. Palestinians face similar hurdles: they must assert sovereignty, defend their identity, and navigate destruction. What might a future political economy look like for Palestinians, both in the territories and in diaspora, under these conditions?
[Leila Farsakh] International recognition of the Palestinian people exists, but dismantling Zionism is essential for any meaningful one-state solution. Palestinians are advocating for a bi-national state, a concept with historical precedent, but implementation requires political movements capable of challenging Zionism—a challenge currently unsupported internationally. Europe and other powers must use leverage to ensure Israel respects Palestinian rights, including trade and labor access, if a sustainable economy is to develop.
[Lyna Ouandjeli] International law must play a key role in holding governments accountable, ensuring Palestinians’ right to heal, and clarifying that anti-Zionism is not anti-Semitism. Only then can pathways to justice and sustainable solutions emerge. Regarding labor migration, you have analyzed how labor shaped Palestinian society. With Gaza’s destruction and potential end of the conflict, how might Palestinian labor patterns evolve? Could regional or transnational labor markets play a renewed role?
[Leila Farsakh] If the conflict ends, skilled labor may migrate to Gulf states. Palestinian labor will likely continue to work in Israel due to economic dependence, particularly in construction. For a truly independent economy, Palestinians must have unrestricted trade and labor movement, potentially facilitated by international leverage. Otherwise, labor dependency on Israel will persist. Sovereignty is essential for developing a sustainable Palestinian economy and state.
