Israel Builders Eye Rebound as Palestinian Laborers Get Vaccines

Israel started to vaccinate Palestinian laborers who work inside its borders and in West Bank settlements on Monday, in a boost for Israeli builders and the Palestinian economy.

Before the outbreak, Israel reached 55,000 housing starts annually but that number sank over the past year to around 45,000 as Palestinian construction workers were blocked from Israeli sites, according to Raul Srugo, president of the Israel Builders Association. While Srugo sees that number holding steady this year, he expects a rebound to pre-crisis levels in 2022 as Palestinian workers return.

“There’s a reason to be optimistic,” Srugo said in a recent interview in Tel Aviv. “Still, there’s damage and the damage is mostly because of a shortage of Palestinian workers.”

After coming under fire for not extending its world-leading vaccine drive to the Palestinians, Israel began inoculating the 120,000 Palestinian laborers it has licensed to work using surplus doses from Moderna Inc. The Builders Association, which had pressed the government to inoculate Palestinian construction workers, is spending hundreds of thousands of shekels to assist with the logistics, Srugo said.

About 65,000 Palestinians typically work for Israeli contractors, accounting for about a third of the construction workforce. At any given time over the past year, however, a third of them were out of work, Srugo said, either because the Israeli government prevented them from entering or the West Bank-based Palestinian Authority sealed its border with Israel.

The Palestinians who work in Israel are a linchpin of the West Bank economy, accounting for 20% of the annual $15 billion output, according to the Palestine Economic Policy Research Institute.

While Israel’s economy has begun to reopen, the Palestinians are still struggling with a vaccine shortage and growing infections that have forced new lockdowns in West Bank cities.

Vaccinating the Palestinians licensed to work in Israel “will help but it’s not going to really change the basic trend,” said Raja Khalidi, director general of the research institute. “If we are lucky, we will have positive growth this year but anemic. It’s not a recovery at this point.”

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