Al Jazeera, August 26, 2005
The Palestinian economy has deteriorated sharply since the start of the
uprising in 2000, and Israel’s separation barrier in the West Bank will
depress it further, a United Nations agency said.
The economy shrank 1% in 2004, one in three Palestinian workers was jobless
at the end of last year and 61% of households had income below the poverty
line of $350 per month, the UN Conference on Trade and Development said in
its annual report on the occupied territories on Thursday.
“Put simply, in the wake of the past four years of Israeli occupation and
war, the Palestinian economy invests and produces less and therefore
consumes more imports, especially those from Israel,” the report said.
Palestinian net imports from Israel represent two-thirds of the total trade
deficit of $2.6 billion, it said. Some 80,000 workers formerly employed in
Israel must also be absorbed.
The Palestinian Authority must now focus on reducing widespread poverty and
boosting production to revive its war-torn economy, the UNCTAD report said.
Ability to Produce
But the barrier or wall Israel is building inside the West Bank will further
erode the fragmented Palestinian production base and resources and “people’s
ability to feed themselves,” it said.
Israel says the wall is a security measure and is intended to keep out
bombers.
Earlier this week Israel finished evacuating all 21 Jewish settlements in
Gaza and four of 120 in the West Bank, part of its plan to withdraw
completely from Gaza, where some 8500 Israeli settlers lived close to 1.4
million Palestinians.
The Palestinian intifada, or uprising, against Israel’s occupation of the
West Bank and Gaza, broke out in 2000 when peace talks stalled. Israel had
occupied both territories since the 1967 Middle East war.
Occupation-related Distortions
“The top priority at this stage of the Palestinian economy’s development is
to focus on poverty reduction while nurturing productive capacity,
eliminating occupation-related distortions and laying the ground for
sustainable economic recovery,” the UNCTAD report said.
The estimated opportunity cost to the economy over the past five years,
representing the value of goods and services that were not produced because
of conflict between Israel and the Palestinians, is estimated at 6.4
billion, while capital stock losses are estimated at $3.5 billion during the
period.
“Economic realities on the ground after the prolonged conflict remain very
harsh and uncertain, regardless of all the positive developments we’ve
witnessed recently,” Raja Khalidi, the report’s main author, told a news
briefing. “In both Gaza and the West Bank, challenges of recovery are
overwhelming.”
Distortions due to decades of Israeli occupation and dependence on the
Jewish state must be corrected before the future Palestinian state turns to
trade liberalisation, the report added.