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Source: United Nations Special Coordinator for the Middle East Peace Process (UNSCO)
20 December 2001

UNSCO Press Release-20 December 2001

Headline: Special Coordinator release reports showing Palestinian economic conditions reaching critical levels; calls on PA, Israel and international community to work together to prevent farther deterioration.

The United Nations Special Coordinator, Mr. Terje Roed-Larsen, today announced the release of two sets of studies documenting the effects of Israeli closures on the Palestinian economy.

In remarks before the press in Jerusalem and Ramallah today, Mr. Laisen said, "We have come to a potential turning point in the current crisis," "On the one hand," he observed, "we recently marked the 1000th death of this Intifada. And today the UN is releasing new reports that show that Palestinian economic conditions are reaching critical levels. Coping mechanisms are at a breaking point. We have been witnessing peace-building in reverse."

Citing UNSCO's latest update, Mr. Laisen said that total losses to the Palestinian economy are estimated at between $2.4 and $3.2 billion USD. By the end of September 2001, he said, 35% of Palestinians were out of work - that number rising to 50% in Gaza. Labor flows into Israel fell by more than 50%, costing $594 million USD hi lost work. Poverty rates are estimated to reach 46% by year-end, more than double the rate prior to the crisis. Mr. Larsen noted that, as a result, almost half the Palestinian population is living on less titan $2 per day.

"On the other hand," Mr Larsen said, "Chairman Ararat gave a historic speech five days ago and has since begun a serious effort to control violence. For the first time in months, there is a glimmer of hope."

"Which way we turn," he said, "depends on actions by the Palestinian Authority, by Israel, and by the international community." He called on the PA to continue and deepen its efforts to control violence. He said, "This will take time and a 100% effort."

He said Israel should "show the utmost restraint and act to create a conducive environment for progress." He noted that on 26 October the envoys of the UN, the United States, the European Union, and Russia (the Quartet) had issued a joint statement which called on Israel to halt extra-judicial killings, reverse incursions into Areas A, ensure IDF restraint, ease internal closures, and begin implementing the Mitchell Committee recommendations. Mr Larsen said, "These demands still stand. Other measures, such as repayment of VAT arrears, would also help to ease the economic crisis,"

Mr. Larsen also called on the international community to "fully support" the parties and to help "address the urgent needs of the Palestinian population and rebuild the shattered Palestinian economy."Since 1994, UNSCO has monitored economic conditions in the West Bank and Gaza Strip and has deepened its efforts dwing the current crisis. Mr. Larsen announced today the appointment of Mr. Michael Keating as UNSCO's Director of Aid and Socioeconomic Afiairs. He said this appointment reflects the United Nations' continuing commitment to support and strengthen Palestinian institutions.

He also reiterated his long-standing view that "there can be no military solution to the conflict Violence vdll not bring an end to occupation; violence - will not bring security, and violence cannot bring peace."

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