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The Palestinian Intifada effectively destroyed the last vestiges of the Palestinian economy. Under Israeli rule, occupants of West Bank and Gaza had enjoyed a higher standard of living than Palestinians living in Jordan. Even after the Oslo agreements, Palestinians from Jordan continued to seek illegal residence in the West Bank in order to take advantage of employment opportunities, though closures, restrictive Israeli policies and PNA mismanagement caused personal income to plummet.
The Intifada however, brought widespread chaos as places of work were closed, produce could not be exported and constant attacks, curfews and closures have totally ruined the economy. Small grants in aid such as those given by the EU and by Arab countries, are only emergency palliatives.
Israeli Occupation, Curfew Paralyzing Palestinian Economy
EU Offers over $8 Million in Aid to PNA
Due to constant closures and curfews imposed on most Palestinians cities and towns since the Intifada erupted in September 2000, the Palestinian economy has been operating far below productive capacity with its main sectors, especially the private one, damaged.
Moreover, a survey prepared by the Palestinian Federation of Industries reported that the deterioration in the economy accelerated after April’s massive Israeli military invasion of the West Bank and Gaza Strip, especially after two-thirds of the Palestinian population were placed under constant curfew.
Ghassan al-Khatib, the Palestinian minister of labor, said the continued Israeli curfews, closures and isolation of cities, towns and villages in the occupied Palestinian territories, have rendered the economy completely paralyzed.
“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 said.
The report also referred to the fact that since the Intifada started tens of thousands of Palestinian workers have been prevented from working in Israel, bringing the daily losses from unemployment to $3 million daily. That did not include other losses in business, agriculture and industry.
It said the total daily losses of the Palestinians as a result of Israeli measures had reached $5 million a day.
“These measures increased the unemployment rate to 70 percent in the territories, and made more than half of the population live under the poverty line,” al-Khatib stressed.
“The United Nations and the International Labor Organization are asked to work together to end these measures,” he added.
Meanwhile, the Palestinian Trade Center found that 232 Palestinian companies, which were engaged in export activities before the Intifada, have suffered great losses during the past two years as a result of Israeli restrictions and measures.
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 now direct their production to the local market only.
Of all companies included in the survey, 46 still export regularly while others export a small amount 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 the Gaza trade union.
Palestinian Trade Center findings indicate that nearly 75% of Palestinian firms are individually or family owned in the West Bank and Gaza. This is mainly because most businesses are small and do not require sophisticated partnerships structures.
The total number of employees in Palestinian manufacturing firms surveyed has decreased by 45% since the start of the uprising. West Bank firms have let go nearly a third of the work force, with Gaza industry retrenching by more than 55 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 added thnat other damage includes “curtailment of marketing and distribution of products and services that inevitably led to the downsizing of the Palestinian labor force.”
Salah Abdel Shaffi, a Palestinian economist, warned that a weak and 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.”
EU Grants PNA Over $ 8 Million in Aid For Reforms
The European Union approved 7.95 million euro ($8.1 million) in aid Tuesday, to help support reform of the Palestine National Authority (PNA), including preparations for next year’s election, the Israeli daily newspaper Ha’aretz reported.
“Despite the extremely difficult security situation, the Palestinian Authority... must continue to advance therefore agenda,” EU External Affairs Commissioner Chris Patten said.
The EU also earmarked 2.5 million euro ($2.6 million) to fund an observer mission for the Palestinian elections scheduled for early next year.
The remaining EU money - 5.45 million euro ($5.57 million) - will help preparations for the elections and help cover the EU’s contribution to international efforts to back reform of the PNA.
EU spokeswoman Emma Udwin reiterated that the EU maintains close monitoring to ensure there is no misuse of its regular 10million euro ($10.2 million) monthly aid payments to the PNA.
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