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The economic climate in the West Bank and Gaza (WBG) has changed dramatically
since the second intifada in 2000, from one driven by investment and private sector led
growth, to one sustained mainly by government spending and significant inflows of donor aid,
due to continuing restrictions on movement and access by the Government of Israel (GOI).
Moreover, the political process has continued to stagnate and there has been little visible
progress for a long term peace settlement. As the economy continues to deteriorate with low
investment, its productive base is hollowing out and per capita GDP is declining (by a
cumulative 13 percent between 2000 and 2008). Between 1994 to 1999, before the second
Intifada, the WBG economy was growing on average at about 6 percent per year. Had this
growth trend continued, GDP per capita would be nearly 85 percent higher than it is currently.
Labor force participation rates are low and dropping. Unemployment in the West Bank,
as reported by the Palestinian Central Bureau of Statistics (PCBS), rose from 17.7 percent in
2007 to 20.7 percent in the third quarter of 2008. Unemployment in Gaza, however, increased
from 29.7 percent to nearly 41.9 percent. Although data on poverty are limited, there are clear
indications that overall poverty in both the West Bank and Gaza has risen since 2000. PCBS
reports that poverty rates increased in Gaza from 47.9 percent in 2006 to 51.8 percent in 2007.
The Palestinian territories of the West Bank (population 2.35 million) and Gaza
(population 1.5 million) have been effectively split since June 2007.1 In early 2006, a Hamasled
government won the elections through what is widely regarded as a fair and transparent
process. In response, many donors withdrew their assistance to the Palestinian Authority (PA),
while the GOI intensified its economic and security restrictions. In June 2007, Hamas took
control of Gaza by force, and President Abbas dissolved the Hamas-led government. A caretaker
government of technocrats was sworn in until new presidential and parliamentary elections will
be held. The caretaker government, headquartered in Ramallah, runs the West Bank and
continues to provide basic services in Gaza through PA civil servants who report to and are paid
by the caretaker government. The international community has restored its full cooperation with
the PA in Ramallah. The continued deterioration in operational conditions in Gaza is also leading
to a widening political, social and economic gap between the West Bank and Gaza.
Following these political developments, Gaza has been isolated by a strict closure
policy by the GOI, crippling the local economy and leading to a deterioration of public
infrastructure. Under the closure, only basic foodstuffs and other necessities are allowed to enter
Gaza and there are no exports. The lack of spare parts and materials necessary for maintenance
of infrastructure has severely impacted its quality and ability to deliver basic services. This
deterioration has been exacerbated by the GOI’s large scale military operation in Gaza between
December 2008 and January 2009, that resulted in a large loss of life and over US$ 1.3 billion in
total damages, according to the Palestinian National Early Recovery and Reconstruction Plan.
To download the full report please click below:
| Attachment | Size |
|---|---|
| 485150PAD0Box31ly10IDA1R20091023811.pdf [2] | 1.44 MB |
Links:
[1] http://www.americantaskforce.org/resources
[2] http://www.americantaskforce.org/sites/default/files/485150PAD0Box31ly10IDA1R20091023811.pdf
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