2002 Yearend: A Look At The Palestinian economy
(Part of UPI's Special series of Reports
reviewing 2002 and previewing 2003)
By Saud Abu Ramadan
GAZA (UPI) -- Since the outbreak of the Intifada, or Uprising on late September 2000 in the Palestinian territories, the Palestinian economy has been operating far below productive capacity due to political instability and economic sanctions imposed by Israel
Palestinian Authority officials, economists and trade unionists warned that the long-term Israeli army measures imposed on West Bank and Gaza have badly affected the Palestinian economy, especially the private sector and the daily life of the population.
PA Minister of Work Ghassan Al Kahtib warned
that the continued Israeli curfews, closures and isolation of
cities, towns and villages in the Palestinian territories had
paralyzed the Palestinian economy.
Salah Abdel Shaffi, a Palestinian economist, said that a weak
and a deteriorating Palestinian economy in the West Bank and Gaza
"would certainly lead to a humanitarian disaster that would
not only affect the Palestinian territories, but might expand
to other neighboring countries."
A survey prepared by the Palestinian Federation of Industries has said that the deterioration in the economy has accelerated following April's massive Israeli military incursions into the West Bank and Gaza, as well as keeping two-thirds of the Palestinian population under curfew.
"The Israeli measures deprive more than half a million Palestinian workers from reaching their work at Palestinian factories that produce different kinds of products that support the Palestinian economy," Al Khatib told United Press International.
Before the outbreak of the Intifada, 120,000 Palestinians worked in Israel, while 500,000 Palestinians worked in the private sector such as construction, agriculture and industry in the Palestinian territories.
However, after the Intifada began and violence between Israel and the Palestinians escalated, in particular suicide bombing attacks carried out into Israel, Israel closed its borders, reduced the number of workers and imposed restrictions on their entrance into Israel.
The survey said that preventing tens of thousands of Palestinian workers from going to work in Israel had brought the daily losses from unemployment to $3 million daily. Other losses in business, agriculture and industry were not included.
It said that the total daily losses of the Palestinians due to the Israeli measures of preventing workers to work in Israel, as well as the effect of the Israeli measures on industry and agriculture, had reached to $5 million a day.
Sa'eed Mudallal, chief of the PA employment department, said that about 10,000 workers from the Gaza Strip and few hundred workers from the West Bank have work permits and were able recently to work in Israel.
As the armed and bombing attacks in the Palestinian territories and into Israel increased, Israel imposed a curfew on the population and tightened the siege imposed on the Palestinian cities, towns, villages and refugee camps.
"These measures had increased the unemployment rate to 70 percent in the territories and made more than half of the population living under the line of poverty," Al Khatib said. "The United Nations and the International Work Organization are asked to work together to end these measures."
According to the findings conducted by Palestinian Trade Center, only 232 companies were engaged in exports activities before the Intifada. These companies were concentrated in several economic sectors including manufacturing, agriculture, information technology, services, and trade.
The center said the products were exported to Jordan, Gulf Countries, Western and Eastern Europe, and the United States.
Many of these companies have suspended exports and direct their production toward the local market only.
Of all companies included in the survey, only 46 companies export products to external markets, while others export a small among only on demand, depending on conditions.
"Obstacles and impediments (have been)imposed by the Israeli authorities on the movement of goods and people at manned checkpoints and blockades throughout the West Bank," said Rasim Al Biari, head of Gaza Trade Union.
Palestinian Trade Center findings said that nearly 75 percent of Palestinian firms are individually or family owned in the West Bank and Gaza. This is mainly due to the fact that most businesses are small in size and do not require sophisticated partnerships structures.
The total number of employees in Palestinian manufacturing firms surveyed has decreased by 45 percent since the start of the Intifada. West Bank firms have let go 31.47 percent of the workforce, with Gaza industry retrenching by 57.46 percent.
"Israeli measures, especially those instituted since the beginning of the Intifada, have severely restricted the movement of Palestinian goods and people that results in lower production utilization," said Al Biari.
He also said other areas that were restricted were "curtailment of marketing and distribution of products and services that inevitably led to the downsizing of the Palestinian labour force."