How Revenue Withholding and War Are Crippling Palestinian Education and Economy

By Minhaz Samad Chowdhury
Independent Human Rights Defender
Focus: State Violence, Political Rights, Minority Protection & Democratic Accountability

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Introduction: When Fiscal Policy Becomes a Human Rights Issue

In conflict settings, the collapse of education systems rarely happens overnight. It erodes gradually—through funding shortages, administrative paralysis, security restrictions, and the steady breakdown of public institutions.

Recent reporting and United Nations data indicate that the withholding of tax revenues owed to the Palestinian Authority (PA), combined with ongoing war and movement restrictions, has severely disrupted public education and accelerated economic collapse in the occupied Palestinian territories.

This is not merely a fiscal dispute. It is a structural crisis with long-term implications for children’s rights, economic stability, and generational development.

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Revenue Withholding and the Education Breakdown

Under existing financial arrangements, Israel collects customs and tax revenues on behalf of the Palestinian Authority and transfers them monthly. According to recent reports, billions of dollars in these revenues have been withheld over the past two years.

The consequences have been immediate and severe:

• Public schools operating only three days per week
• Teachers receiving approximately 60% of their salaries
• Strikes and teacher attrition
• Reduction of subjects, with focus limited to mathematics, Arabic, and English
• Rising student dropout rates (estimated 5–10% increase in two years)

When teachers are unpaid and school hours are cut in half, learning gaps widen rapidly. Over time, these temporary measures risk becoming permanent structural decline.

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Economic Collapse: UNCTAD’s Warning

A report by the United Nations Conference on Trade and Development (UNCTAD) warns that the Palestinian economy has suffered one of the most severe contractions recorded globally since 1960.

Key findings include:

• GDP regressed to 2010 levels
• Gaza’s GDP fell by 83% in 2024
• GDP per capita in Gaza dropped to approximately $161
• Estimated reconstruction costs exceeding $70 billion
• Approximately $4 billion in tax revenues reportedly withheld

When a government cannot access its fiscal transfers, it cannot pay salaries, maintain infrastructure, or fund public services—including education.

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Compounding Factors: Violence and Institutional Erosion

The crisis extends beyond funding. Reports document:

• Military raids near schools
• Settler attacks on educational facilities
• School demolitions and threats of demolition
• Interrogation of minors during raids
• Children walking through high-risk areas to reach classrooms

According to Palestinian Authority estimates, more than 84,000 students have experienced education disruption due to raids, violence, or demolitions. Over 80 schools are reportedly under threat of partial or full demolition.

Such conditions do not merely disrupt schooling—they generate trauma, insecurity, and long-term psychological consequences.

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The Right to Education Under International Law

Education is not a privilege—it is a protected right under:

• Article 26 of the Universal Declaration of Human Rights
• Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR)
• The Fourth Geneva Convention (regarding obligations of an occupying power)

If fiscal policies and security measures collectively result in systemic denial of access to education, serious legal and ethical questions arise regarding proportionality, collective impact, and protection of civilian populations.

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The Intergenerational Risk

Education systems serve as stabilizers in fragile societies. When they fail:

• Child labor increases
• Dropout rates climb
• Poverty deepens
• Institutional trust erodes
• Long-term economic recovery becomes harder

Even with substantial international aid, UNCTAD warns that recovery to pre-October 2023 economic levels could take decades.

Lost school years cannot easily be recovered. A disrupted generation carries consequences far beyond the present conflict.

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A Balanced Perspective

Israel has historically justified revenue withholding on security and political grounds, particularly in relation to prisoner payment policies of the Palestinian Authority. Any comprehensive policy evaluation must consider those claims, as well as internal governance challenges within the PA.

However, from a humanitarian and development standpoint, sustained systemic disruption of public education risks undermining long-term peace, stability, and regional security for all parties.

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Conclusion: Education as a Strategic Necessity

Saving education is not a sectoral issue—it is a strategic necessity.

When classrooms close, societies destabilize. When teachers go unpaid, institutional collapse accelerates. When children drop out, the future contracts.

Durable ceasefire arrangements, restoration of fiscal transfers, protection of schools, and international coordination are not political luxuries—they are foundational requirements for human dignity and sustainable peace.

In any conflict, the measure of justice is found not in rhetoric, but in whether children can safely go to school.

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About the Author:
Minhaz Samad Chowdhury is an Independent Human Rights Defender focusing on state violence, democratic accountability, and minority protection. He writes at hr-defender.blogspot.com.

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Tags: Palestine Education Crisis, Gaza Economic Collapse, West Bank Schools, International Humanitarian Law, Right to Education, Human Rights Analysis, UNCTAD Report, Fiscal Withholding, Conflict and Development