Business & Economy

Economic Update: Westbank and Gaza

In recent weeks, both the Government of Israel (GOI) and donors have been considering a variety of economic responses to the outcome of the Palestinian Legislative Council (PLC) election of January 25, 2006, some of which are already under implementation. GOI has suspeneded the regular transfer of revenues which it collects on behalf of the PA; other forms of economic interaction at issue are Palestinian labor access to Israel, and the flow of imports and exports across Palestinian borders with Israel. Donors are planning to reduce various categories of foreign assistance. 

Aid and the Palestine Financial Crisis: A viewpoint on an ongoing debate

The sudden ascent of Hamas to power after the January 25 parliamentary elections in the Palestinian Authority (PA) areas has put at risk two vital sources of Palestinian finance: an aid package by Western donors of about $1 billion a year in humanitarian, developmental and budgetary support; and a monthly transfer by Israel of about $55 million in customs and tax revenues that it collects on behalf of the PA. Preserving the status quo, where international aid and customs revenues transfers are maintained at their 2005 levels, would not prevent Palestinian economic conditions from deteriorating. 

Compensation package for farmers urgently needed

John Ging, Director of UNRWA’s Gaza Field Office, highlighted that “a compensation package is urgently needed for the hundreds of families whose livelihoods have been wiped out by bird flu.” Mr. Ging visited Juhr El-Deik Municipality, at the invitation of the Mayor, to meet with refugee farmers whose chickens have been culled due to recent outbreaks of avian influenza within the Gaza Strip. The culls were ordered and carried out by the Palestinian Ministry of Health. 

Update: The Implementation of the Agreement on Movement and Access

Rafah was open daily during the reporting period for the standard nine hours. On 14 March four truckloads of furniture and handicrafts were exported via Rafah to Egypt, using the back-to-back system under the supervision of the EU BAM. No other truck loads have crossed since. No security incident on the Palestinian side of the crossing was reported. However, on 14 March, the EU BAM closed Rafah 75 minutes earlier than scheduled. The decision was taken jointly with the Palestinian border officials in reaction to the tense situation in the Gaza Strip due to the events in Jericho. The passages did not open continuously. Karni was open for limited imports on four days only. Exports were allowed on two days. 

Measures needed to alleviate economic hardship in the West Bank – UN report

Improving infrastructure, gaining greater access to markets and diversifying economic activity are among the measures recommended in a United Nations report issued today aimed at helping to alleviate the economic hardship faced by Palestinians in the West Bank. The report, issued by the Office of the UN Special Coordinator for the Middle East Peace Process, says that “since 2000 a progressive fragmentation of established patterns of economic activity has taken place in the West Bank, involving the breakdown of relations with Israel, between districts and between urban and rural economies.” In particular, the report focuses on the “negative economic impact on all communities near it” of the construction by Israel of a separation barrier. 

World Bank Chief Backs Continued Palestinian Aid

Paul Wolfowitz, president of the World Bank, said yesterday that the Bank should continue delivering aid to the West Bank and Gaza in spite of last week’s electoral victory for Hamas, reports The Financial Times. The Bank chairs the committee of donors for the West Bank and Gaza, which disburses about $1bn a year. The EU, which is the largest single donor, recently suspended some of the aid that was funneled directly into the budget of the Palestinian Authority (PA) in protest at financial mismanagement. The PA’s fiscal situation has become increasingly unsustainable mainly as a result of uncontained government consumption, in particular a rapidly increasing public sector wage bill, expanding social transfer schemes and rising “net lending”. 

Gaza Strip markets suffer from a severe shortage in dairy products, basic goods, and medicines

The Palestinian Centre for Human Rights expresses grave concern over the continued closure of Al-Muntar (Karni) checkpoint, east of Gaza City. The closure has halted the importation and exportation of basic goods, medicines, and other commodities. The closed checkpoint is the only commercial crossing connecting the Gaza Strip with the West Bank, Israel and the outside world. PCHR is concerned over the potentially devastating effects of this continued closure, representing the continued strangulation of the Palestinian economy, particularly in the Gaza Strip. 

Agrexco Blockaders Acquitted in UK Trial

In a remarkable judgement, Thursday 26th Jan 2006, after a half time application by the defence team in the Uxbridge 7 trial, a District judge ruled that seven anti-apartheid protesters who had blockaded the Israeli agricultural export company, Agrexco UK, had no case to answer and the case was dismissed. The charges of Aggravated Trespass and Failure to Leave Land were dismissed after District Judge Barnes sitting in Uxbridge Magistrates Court, found that the evidence against the defendants was too tenuous� to justify continuing with a trial. The trial had been listed for seven days but ended on the morning of the fourth day with the dramatic acquittals. 

A Palestinian-Israeli Joint Declaration unveiled at World Bank conference on Economic Growth

A group of Palestinian and Israeli private sector representatives presented today a joint Declaration at a Conference on “Promoting Economic Growth in the West Bank and Gaza through the Private Sector” in London. The conference was co-hosted by the World Bank and the United Kingdom Treasury. The Declaration identified priority areas, such as security, movement of goods, protection of investors, legal and regulatory reform and private sector participation in revitalizing the economy. The Working Group met for the first time last week in Jerusalem to discuss issues of common interest and develop a joint position on matters of economic development. 

Ex-car thief aims to revive business in Gaza

Abdel Rahman sat on a sand dune near the northern borders of the Gaza Strip, looking around the vast expanses of land that was once the Jewish settlement Eli Sinai. He moved his sight northwards over to the distant Israeli city of Ashkelon, and released a sigh. “This area was my main base of operations. We were very rich, but the fighting brought our business to its knees,” he said. Abdel Rahman once headed a large car theft ring in Gaza. He said he was not afraid of Palestinian and Israeli law enforcements. He said his “business” brought benefits to both sides and supported many families along the way. Stealing Israeli cars and smuggling them to Gaza emerged notably after the signing of the Oslo peace accords in 1993.