World Bank study confirms Israel is strangling Palestinian economy

OCCUPIED JERUSALEM: Burdened by Israeli restrictions that paralyze the economy of the occupied West Bank and the Gaza Strip, Palestinians have become more and more reliant on outside assistance, the World Bank said on Wednesday. “As the Palestinian economy declines, it is becoming increasingly dependent on foreign aid,” the bank said in a report on economic prospects in Palestinian territories.

The report highlighted the fact the Palestinian Authority, led by US-backed President Mahmoud Abbas, had received $1.2 billion in budget support in the eight months through August, in addition to about $300 million in development aid.

It pointed out that official poverty rates of 51.8 percent in Gaza and 19.1 percent in the West Bank (where the West has sought to prop up Abbas’ authority) soar to 79.4 percent and 45.7 percent respectively if remittances and food aid are excluded and the rates are based on household income only.

“With a growing population and a shrinking economy, real per capita GDP is now 30 percent below its height in 1999,” the report said.

Increasing restrictions imposed by Israel, which says they are key to preventing attacks, undermine the Palestinian economy, it said. “With due regard to Israel’s security concerns, there is consensus on the paralytic effect of the current physical obstacles placed on the Palestinian economy.”

The network of Israeli barriers and checkpoints that riddle the Occupied West Bank and partition it from the Gaza Strip, Israel and the rest of the world are only some of the restrictions, the bank said.

“In reality, these restrictions go beyond concrete and earth-mounds, and extend to a system of physical, institutional and administrative restrictions that form an impermeable barrier against the realization of Palestinian economic potential,” the bank said.

Aid and reform are unlikely to revive the Palestinian economy unless Israel removes economic restrictions at the same time, it said. “Recent evidence also supports the possibility of removal of economic restrictions without a commensurate risk for citizens within Israel,” the report said.

At the same time, an Israeli blockade of Gaza imposed after Hamas gained power there in June 2007, continues to erode the economy, it said, citing estimates that 98 percent of Gaza’s industry is inactive. This is also leading to a collapse of the municipal sector that affects key services such as water, sewage and solid waste.

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