News / Middle East

Long-Term Prospects for Palestinian Economy Worsen

Palestinian Nadia Abu Nada holds a picture of her son Ihab Abu Nada, who set himself on fire because he could not find a job, in Gaza City, September 3, 2012.
Palestinian Nadia Abu Nada holds a picture of her son Ihab Abu Nada, who set himself on fire because he could not find a job, in Gaza City, September 3, 2012.
Lisa Schlein
A United Nations agency says the long-term prospects for economic development in the Palestinian territories have worsened. In its annual report on Assistance to the Palestinian People, the U.N. Conference on Trade and Development warns growth achieved in 2011 and through early 2012 is not sustainable. 

The economy of the West Bank, Gaza, and East Jerusalem grew by 9.9 percent last year.

This sounds good. But UNCTAD - the U.N. Conference on Trade and Development - cautions against misconstruing this result.

Indeed, the agency's coordinator for assistance to the Palestinians, Mahmoud Elkhafif, calls this growth rate an illusion because it mainly originates in the Gaza Strip.

“Gaza experienced a destructive war in December 2008 and January 2009," he says."The growth in Gaza is coming because rehabilitating some of the destroyed infrastructure. So, once rebuilding has been done, this source of growth is no longer available. The growth in the West Bank actually is five percent, four percent and also is donor driven, by the way. So, the source of growth that we have seen last year is not sustainable.”

The report paints a grim picture of the economic situation in the Palestinian territories. It says unemployment persists at 26 percent, along with severe poverty and chronic food insecurity. It says conditions are particularly alarming for Palestinians in East Jerusalem, where the poverty rate is estimated at 78 percent higher than the rates in the West Bank and Gaza.

The report says Palestinian development problems have less to do with the Palestinian Authority’s economic policy than with what it calls Israeli occupation.

It says the Israeli economic controls have almost eliminated all domestic and external marketing and investment opportunities, and has eroded the land and natural resources available to Palestinians for economically productive activities.

Economist Elkhafif says a main problem standing in the way of development is Palestinian economic dependence on Israel. He says Palestinian trade suffers from a chronic deficit.

“The trade deficit is about 36 percent of GDP, that is $3.2 billion," says Elkhafif. "About more than 80 percent of this deficit is because of trade with Israel. And, that is another reason why this growth is not sustainable because this growth is attached to development in trade and development in trade is more or less controlled by Israel.”

The report says years of occupation have rendered Palestinian agriculture incapable of realizing its productive and employment potential. It says the agricultural sector’s share of Gross Domestic Product has shrunk from 12 percent in 1995 to 5.5 percent in 2011.

Though Palestinian agriculture is operating at one-quarter of its potential, UNCTAD economists say the sector is resilient and could bounce back. The U.N. agency says the donor community and the Palestinian Authority have neglected this sector and recommends they take corrective measures to compensate.

The U.N. report says an agricultural development bank should be established to provide credit and insurance. It says the bank should support marketing and post-harvest services, as well as funding and guaranteeing investment in agricultural and water infrastructure.

You May Like

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs