Credit gives Palestinian city a ritzy veneer of affluence
The Palestinian economy is crippled by restrictions on trade, investments and access to natural resources, but driving around Ramallah you might get the impression it’s booming. Underground parking lots are brimming with Audis and BMWs, residential buildings are popping up at a frenetic pace, and cafes and restaurants are buzzing with customers. Helping drive the appearance of wealth in the West Bank city, about 10km from Jerusalem, is the emergence of a consumer loan market that was all but nonexistent just a decade ago. Its growth can be attributed to a 2008 law that forced banks operating in the Palestinian territories — which preferred to lend their money abroad — to extend at least 40% of their credit to locals. In the past four years, the debt market has more than doubled to $6.4bn, of which $2.6bn has gone to local residents, according to the Palestine Monetary Authority. "This is a relatively new phenomenon," said Samir Abdullah, a former Palestinian Authority planning and l...
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