World Bank Reveals Crippling Donor Dependency in West Bank, Gaza

• by Kanya D'Almeida (washington)
• Monday, October 17, 2011
• Inter Press Service

The first exhaustive analysis of poverty and unemployment in the region since 2001, 'Coping with Conflict: Poverty and Inclusion in the West Bank and Gaza', found that the Palestinian territories, which have existed under near-total military occupation since 1967, are today aid-dependent economies and therefore highly vulnerable to international shocks and crises.

Researchers found that Gaza was a particularly precarious site, where rising lines of poverty and unemployment converge in rubble-strewn streets that often bear the brunt of Israel's military might and its frustrations with the tactics of the democratically-elected Hamas government.

Tara Vishwanath, the lead author of the report, noted that international assistance to Gaza had doubled in 2009, while an astonishing 71 percent of all Palestinian citizens on the strip were beneficiaries of 'at least one form of social assistance'.

The Bank is highly concerned that the uneven development unfolding across the region is too unsteady to support or pollinate any kind of long-term sustainable growth.

For example, if household incomes in Gaza drop by 20 percent as they did back in 2007, households living in severe poverty would likely shoot up from 33 percent to 49 percent, plunging half of the population into even deeper suffering than it is currently enduring.

Unemployment in Occupied Palestine has been consistently staggering, peaking at 41 percent in Gaza in 2008 — higher than unemployment levels in Weimar Germany at the beginning of the 20th century, or in the U.S. during the Great Depression of the 1930s.

Even in 2009, unemployment in Gaza hovered well above 35 percent — a scourge that has disproportionately affected youth and less educated sections of the population.

Mukhaimer Abu Sada, a professor of political science at al-Azhar University in Gaza, said earlier this year, 'Young people here are ready to explode. They go to college [and] they graduate with no opportunity of any job at the end.'

In the face of ubiquitous male unemployment, 'both labor force participation and unemployment among women have increased from very low levels since 2003,' according to the report.

Even those who have jobs have to contend with plunging earnings and a sharp drop in real wages. Compared to the West Bank, the report says Gaza has performed significantly worse along every measurable labor market dimension - nursing 'higher unemployment, lower labor force participation rates [and] lower wages.'

Gaza: Stifled by occupation

'The primary constraint to growth, especially private sector growth, employment and improving welfare outcomes, is the regime of barriers to the mobility of goods and people in and out of Gaza,' Vishwanath told IPS.

'Removal of the external restrictions on the movement of labour and goods is of paramount importance,' she added.

The report further notes that 'areas characterized by high rates of poverty also tend to be areas with severe mobility restrictions, poor access to markets, high rates of unemployment, a dominance of low- wage sectors, and a reliance on increasingly scarce employment opportunities in Israel.'

Fishing and farming, once sturdy pillars of the Gaza economy, have been decimated as result of the occupation.

According to a 2010 report from the U.N.'s Food and Agriculture Organisation (FAO), 46 percent of agricultural land in the Gaza Strip has been inaccessible since the destruction caused during 'Operation Cast Lead'. In addition, the percentage of the labour force working in agriculture plummeted from 12.7 percent in 2007 to 7.4 percent in 2010.

The FAO fact sheet 'Farming Without Land, Fishing Without Water' also documents a decrease in fishers in the Gaza Strip from 10,000 in 2000 to 3,500 today, after Israel imposed a three-nautical-mile limit on fisherfolk who rely on fish populations in the deep seas, miles offshore.

Helena Cobban, a veteran analyst of Palestinian affairs and owner of Just World Books, told IPS, 'It's completely anomalous at this point in human history for two economies (the West Bank and Gaza) to be held as hostages of an occupying power for 44 years.'

'Military occupation is supposed to be a transitional stage. Not even the U.S. occupations in Germany, Japan or Iraq lasted for more than seven or eight years,' she added.

'What Gaza and the West Bank desperately need is direct contact, links and communication with the rest of the world economy. Gaza has a seaport, a land crossing through Egypt and a small airport — at the economic level it could be plugged into the world market extremely quickly, but the Israelis insist on keeping Gaza and West Bank citizens as beggars, completely dependent on international aid, or exports to (or through) Israel,' Cobban added.

'At the human level (the occupation) is an outrage — every single family in Gaza is split, with half their members forced out of the territories because of economic, social and military uncertainty — and it can't be allowed to continue,' she concluded.

'Efforts to allow the private sector to grow are key in Gaza,' Vishwanath told IPS.

'Businesses have suffered over the years of closure and while some programmes are assisting individual firms, until exports are permitted and the necessary inputs for private business able to be imported the growth of the private sector will remain constrained.'

'Businesses are severely constrained by the lack of access to markets, inputs, and by the physical constraints to move in and out,' she added. 'Gaza is too small of an economy to be able to grow relying on its own domestic demand, which is in any case, heavily depressed by the lack of income earning opportunities in the territory.'

© Inter Press Service (2011) — All Rights ReservedOriginal source: Inter Press Service