Palestinian economy struggles up from ashes
AFP
Date: 09-27-05
RAMALLAH, West Bank (AFP) - Sucked dry by a devastating five-year intifada, the Palestinian economy remains heavily dependent on Israel and international aid, despite showing tentative signs of recovery.
Frequent Israeli closures and military roadblocks that significantly disrupt the movement of civilians and merchandise have dealt a terrible blow to the Palestinian economy since the uprising broke out on September 28, 2000.
A relative lull in violence has seen officials detect a slight
improvement in recent months, but a flare-up of violence in the Gaza Strip this week only underlined that fragility.
Speaking in Ramallah on Sunday, Palestinian leader Mahmud Abbas said economic prosperity could flower in the West Bank and Gaza Strip provided there was calm.
"Projects that we have or which have been promised can absorb all our labour, get rid of unemployment and our dependence on others," he said.
If the economy hit rock bottom during the worst excesses of the intifada there is now a visible upswing in fortunes, says economy minister Mazen Sunukrot.
"Gross national product rose 10 percent in 2005 on what it was in 2000," just before the intifada broke out, he told AFP.
He says unemployment soared to 35 percent of the working-age population during the intifada.
Today it has fallen to 29 percent, though still a far cry from the 12 percent of 1999.
The relative lull in anti-Israeli attacks and Israeli reprisals, has also had a "positive affect on income, including customs and fiscal revenue," said Sunukrot.
According to official statistics, nearly a quarter of the 700,000 to 800,000 actively employed Palestinians are civil servants.
The 145,000 Palestinians who worked in Israel before the intifada have since found new jobs or remain unemployed, the statistics say.
"The heaviest blow to the Palestinian economy was the end of the Palestinian labour market in Israel," said social affairs minister Hassan Abu Libdeh.
"Their income used to represent half of the total Palestinian labour market," he said.
If unemployment has fallen slightly in recent months, the poverty rate remains alarmingly high.
According to the projections of the labour ministry, around two million out of a total Palestinian population of 3.7 million live in poverty, 1.5 million of them without source of income.
But the cautious optimism for the future from the Palestinian Authority is not entirely shared by the private sector, whose contribution is indispensable for sustained economic growth.
"The Authority's optimism is only based on promises of aid money from donor countries and the relative calm," said Mohammed al-Masruji, chairman of the private sector coordinating committee.
"The Palestinian economic reality does not inspire confidence because of the continued Israeli occupation and what we have seen in Gaza these last days is a perfect illustration," he said.
"No one knows what the Israelis are going to do and that makes any economic planning extremely difficult," Masruji said.
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