Ma'an News Agency
August 3, 2010 - 12:00am

The development of the Palestinian economy is dependent on donor countries, and its growth follows the political whims of the region, Palestinian Authority Minister of National Economy Hasan Abu Libda told Ma'an.

"The money received from donor countries is the oxygen for Palestinian economy. However, this money is contingent on the political process, so it in effect acts as a sword hanging over our heads," Abu Libda explained during an interview on Ma'an Radio Sunday.

The minister said he believed that despite the uncertainty, the Palestinian economy had large potential for development, saying the current plan for growth was investment in infrastructure and establishing grounds on which to support Palestinians as soon as Israeli restrictions are removed.

Hampering growth in the West Bank, Abu Libda said, is the continued occupation and exploitation of 60 percent of Palestinian lands demarcated Area C, under the Oslo Accords in 1993, when they were set for progressive takeover by Palestinians as part of the peace process. The inability to build on, cultivate, or plan for these areas, the official said, has stymied much potential growth.

In Gaza, he added, vast areas have been categorized as no-go zones, hampering agriculture. An even larger issue of course, he added, was the continued blockade of Gaza, preventing construction in all areas, not just those on the border regions.

Freed from Israeli restrictions, Abu Libda said he believed that the Palestinian economy could double every two years for the next ten, citing what he said was a recent ramp-up in production and trade from three large factories in the West Bank, which have taken on more workers

"Many are unaware that the unemployment rate in June was 14 percent, which is a very low rate compared to previous years, and that all indicate that we have reasonable economic activity," the minister explained.

The expansion of small industrial zones in the West Bank stalled, however, after the creation of two areas in the Bethlehem and Jenin areas. "We are facing a problem in attracting entrepreneurs to build an industrial zone in the Jericho area,” Abu Libda explained, adding that further expansion of the zones would be limited by the unavailability of suitable areas.

Development of the zones falls in two categories, the minister explained, "border zones and internal zones," with Jenin and Jericho forming the former, and Bethlehem an internal area.

“The political atmosphere is hindering progress," Abu Libda said, with Israel citing security restrictions for preventing the expansion of the Jenin industrial zone closer to the border for easier transport and the development of the sector away from the city to allow for growth.

Changing the plan slightly, Abu Libda said, the ministry was looking to build the zones closer to the city, which would accommodate local craftsmen who oftentimes work inside urban areas.


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