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Source: Special Coordinator in the Occupied Territories (UNSCO)
30 November 2000
Office of the United Nations Special Co-ordinator


The Impact on the Palestinian Economy of Confrontations,
Mobility Restrictions and Border Closures,
28 September—26 November 2000


I. Introduction

The months of October and November have witnessed the most severe crisis in Israeli-Palestinian relations since the signing of the Declaration of Principles in September 1993. Confrontations have resulted in the death or injury of thousands of Palestinians—and numerous Israelis—as well as damage to Palestinian infrastructure, buildings, agricultural property and vehicles. There have also been serious disruptions in normal economic activities caused by the political strife and the imposition of movement restrictions around and within the Occupied Palestinian Territory.

For most of this period personal mobility between the West Bank and Gaza, and between the Occupied Palestinian Territory and the rest of the world, has been severely impeded. Travel for Palestinians between the West Bank and Gaza via the “safe passage” route has been blocked by the Israeli authorities since 6 October while the Gaza International Airport and the border crossings at Rafah and the Allenby/Karameh Bridge have been closed for extended periods. 1/ Palestinian foreign trade has also been affected. Imports and exports transshipped through Israeli ports have been delayed or blocked completely for most of this period while the commercial crossings at Rafah and the the Allenby/Karameh Bridge have been closed for about 70 per cent and 12 per cent, respectively, of the days during the reporting period. 2/

Furthermore, there have been varying levels of restrictions on mobility between cities, towns and villages in both the West Bank and Gaza due to reduced levels of security on roads and the imposition of internal closures by the Israeli authorities. Such measures have routinely included the placement of physical barriers between Palestinian villages and cities and the deployment of military checkpoints on main roads. 3/ In addition, the Israeli authorities have imposed curfews on several areas in the West Bank, most notably in the city of Hebron and on numerous villages in the Nablus area.

Private economic losses during the first three weeks of the crisis were estimated at approximately USD 186.2 million. 4/ Lost income-earning opportunities were estimated at about half of the value of domestic production and nearly all of the income earned by Palestinians working in Israel. Since then the economic losses have been compounded, while the loss of life, injuries and the physical destruction of private and public property have become more widespread. This is an updated and expanded report on the economic and social impact of the crisis covering the two-month period 28 September—26 November 2000.


II. Internal Impact

The main impact of mobility restrictions and border closures has been the disruption of productive activities and the circulation of goods. The short-term economic losses include reduced income to farmers, workers, merchants and business people who cannot reach their places of employment in the Palestinian Territory (PT) or who are unable to obtain inputs and/or sell their goods and services. This has been the case for a broad spectrum of economic activities including agriculture, manufacturing, construction, commerce (both internal and external), transportation and services (including those related to tourism).

An approximate measure of the internal effects of such disruptions can be derived from estimates of the Gross Domestic Product (GDP)—i.e. the value of goods and services produced in the Palestinian economy—the magnitude of which was expected to reach about USD 5,000 million this year. Assuming output is distributed evenly over the work year—which consists of an average of 312 days in the PT—the estimated GDP is estimated at about USD 16 million for each normal working day. 5/ Based on reports and anecdotal information from various sources, it is estimated that the crisis has resulted in a 50 per cent reduction in domestic productive activity during this period. 6/ As compared to the expected level of production in the absence of the crisis, the internal losses are therefore estimated at about USD 8 million for each normal working day during the period 28 September—26 November.


III. External Impact

A. Labour Flows and Wage Income

In addition to the internal production of goods and services, the PT derives income through the export of labour. In 1999, it is estimated that Palestinian workers earned about USD 750 million from jobs in Israel and Israeli settlements and industrial zones. 7/ In the first half of 2000, there was an average of about 125,000 Palestinians employed in Israeli-controlled areas on a daily basis. The average worker was earning a daily wage of about NIS 110 or about USD 27.50. 8/ As a group, these workers were earning approximately USD 3.4 million for each normal working day prior to the crisis. On an annualised basis, assuming no border closures and no change in the average number of workers or the average wage, Palestinian workers in Israel could have earned an estimated USD 822 million in the year 2000. Internal movement restrictions and border closures have substantially reduced such income-generating opportunities for the last quarter of the year.

During the first two weeks of the crisis, the opportunity losses in worker incomes in Israel were mitigated somewhat due to the occurrence of three sets of Jewish holidays: Rosh Hashana (30 September—1 October); Yom Kippur holiday (8—9 October); and Sukkoth (14 and 20 October). Palestinian labour flows to Israel are normally very small during such holidays. Nonetheless, during the week of 2 October (and prior to the border closure), labour flows had declined by more than 50 per cent as compared to the week prior to the crisis. This resulted in an average daily loss of about USD 1.8 million in Palestinian household income. With the border closure imposed on Monday, 9 October—a closure which remains in force—Palestinian labour flows to Israel were drastically reduced.

Evidence suggests that Jerusalem Palestinians working in Israel—about 15,000 persons—continued to attend their jobs during this period. Other evidence suggests there was some amount of informal labour flows from the northern part of the West Bank in the period after 22 October. To this should be added an average of 1,700 permitted workers employed in the Erez Industrial Zone in Gaza during some of the reporting period. Labour flows to Israel are thus estimated at about 59,000 during 2-5 October, at about 15,000 during 9-22 October and at about 20,000 thereafter. 9/ The estimated daily labour income losses during these three periods are therefore estimated at USD 1.8 million, USD 3.0 million and USD 2.8 million, respectively.

B. Commodity Flows and External Trade Income

Exports from Gaza were effectively blocked from 30 September until agricultural exports resumed during the week of 22 October. Exports from the West Bank have also been severely constrained during the reporting period. 10/ Total registered Palestinian non-agricultural exports to Israel (the main market for Palestinian exporters) averaged about USD 45.1 million per month during the first half of 2000. Assuming that these sales are distributed evenly throughout the working year, this implies a daily loss of about USD 1.9 million in exports, although some portion of these losses can be retrieved once mobility restrictions are reduced or removed. 11/

Palestinian imports from Israel have also been negatively affected by the border closures mobility restrictions. The Karni/Muntar crossing, the only commercial crossing in Gaza functioning during the reporting period, was closed entirely or partially on 43 per cent of the days since 28 September resulting in a significant reduction in goods imports. 12/ Trade between Israel and the West Bank has also been reduced due to the internal and border restrictions. Registered non-agricultural imports from Israel averaged USD 135.9 million per month in the first half of 2000 or about USD 5.9 million each working day. Furthermore, direct Palestinian imports from abroad averaged about USD 3.1 million per day in the first half of the year. 13/

External trade is an integral component of the Palestinian economy and has important effects on the size of the GDP. The production of goods for export generates significant employment and income. On the other hand, the scarcity of resources and other inputs in the PT require the importation of raw materials, equipment and machinery. Thus, the disruption of external trade resulting from mobility restrictions and border closures dampens domestic production, income and employment in a large number of manufacturing, commercial and agricultural enterprises. However, because external (and internal) trade activities are included in the calculation of GDP, the trade losses resulting from movement restrictions and border closures are implicitly included in the estimated daily GDP losses noted above. 14/


IV. Aggregate Income Losses

The estimated economic impact of the crisis is summarised in Table 1. In the aggregate, and excluding material damage to property and other losses, Palestinians are estimated to have lost USD 505.0 million during the 60-day period 28 September—26 November. The estimated losses are more than 2.5 times the value of donor disbursements to the PA during the first half of the year, which were USD 183 million. 15/ If these losses are distributed over normal working days in the PT—of which there were 51 during this period—the average daily loss is estimated at about USD 10 million.

Table 1
Estimates of Income Losses in the
Occupied Palestinian Territory,
28 September—26 November, 2000 16/


Source
Loss (USD)
1. Domestic Output and Income
388,000,000
2. Labour Income from Israel
117,010,080
Total
505,010,080


These losses consist of: 1) the reduced production and circulation of goods and services (inputs and outputs) in the PT estimated at USD 388.0 million. These include losses incurred due to impediments to internal and external trade; 2) the reduced labour income for workers and their households due to the loss of employment in Israel and Israeli settlements and industrial zones. This loss is estimated at USD 117.0 million. Indications are that the income losses have been widespread. An opinion survey conducted in early November, 86 per cent of those polled reported that their household living level had declined as a result of the strife and movement restrictions. 17/

The economic impact—i.e. the lost income-earning opportunities—amount to approximately 10 per cent of the estimated value of the GDP for the year 2000. It is important to note that these losses are calculated in relation to the level of economic activity prevailing prior to the crisis, rather than in comparison to the maximum income-generating potential of the Palestinian economy. While lost labour income is irretrievable, some portion of the domestic output/income losses may be recuperated once mobility restrictions are reduced.


V. Social Impact

A. Unemployment and Poverty

After the economic and social crisis in 1996, caused by prolonged border closures in the early months of that year, the Palestinian economy entered a period of recovery. From early 1997 until the beginning of the present crisis—a period of about 3.5 years—the recovery was characterised by significant employment growth. The standard unemployment rate during this period declined from an average of 25 per cent in 1996 to about 11 per cent in the first half of 2000. 18/

An immediate effect of the present crisis was the “disemployment” of some 110,000 workers formerly employed in Israel. Within days of the onset of the crisis, the core unemployment rate rose from less than 11 per cent to nearly 30 per cent of the labour force. 19/ To this must be added the disemployment effect of the disruption in normal internal economic activity due to mobility restrictions and border closures. The combined effects have raised unemployment in the PT to at least 40 per cent of the labour force. 20/

Prior to the crisis, there were approximately 70,000 unemployed Palestinians. As a result of the disemployment effects described above, it is estimated that another 190,000 persons have lost their jobs. Thus, at present, it is estimated that there are more than 260,000 unemployed persons in the PT. Evidence suggests that the average employed Palestinian supports himself/herself plus 4 other people, a rather high dependency ratio. 21/ Therefore, in addition to the negative impact on the livelihoods of 190,000 workers, the crisis has directly reduced the income of 760,500 other Palestinians. In total, more than 1,000,000 persons—or about one-third of the population in the PT—have been immediately and negatively affected by mobility restrictions. If previously unemployed persons and their dependents are included—some 350,000 persons—the number of Palestinians enduring some amount of economic distress rises to 1,370,000 or 45.5 per cent of the population. 22/

Evidence suggests that households are responding to declining incomes by reducing non-essential purchases, using savings to maintain essential consumption and/or are borrowing money from extended family. The private safety net—i.e. private savings—has been eroded while reduced household purchases are further dampening domestic economic activity and employment.

The inevitable outcome of higher unemployment is an increase in poverty rates after several years of improvement. In a recent report, the World Bank has estimated the poverty line in the PT at approximately USD 2.1 in consumption per person per day. The poverty rate—i.e. the portion of the population falling below this level of daily consumption—was estimated at 21.1 per cent in September 2000 (having declined from about 25 per cent in 1997). Under present conditions of movement restrictions and border closures, the report estimates that by end-December the poverty rate will rise to 31.8 per cent. This constitutes a 50 per cent relative increase in poverty rates within a three-month period. Moreover, even with a partial relaxation in restrictions on mobility, the report estimates that the poverty rate will rise to about 43.8 per cent by end-2001. 23/


B. Caring for the Injured

As of 27 November, the Palestinian Ministry of Health reported 240 deaths and more than 9,100 injuries resulting from confrontations in the PT since 28 September caused mainly from live and rubber-coated metal bullets. Of all casualties, 40 per cent have been below the age of 18. About 58 per cent of injuries were to the head and neck, chest and torso. Some 10 per cent of casualties—about 900 persons—have had serious physical or neurological injuries. Some 441 of these cases have been transferred to medical facilities in 10 Arab countries, Turkey, Iran and Germany for more intensive care. 24/ In addition to the specialised medical care provided in Arab and other countries, the international community’s response, up to now, has been emergency assistance to the Ministry of Health, to hospitals in Jerusalem, to NGOs involved in medical relief and to UNRWA (see below). The long-term costs of caring for the thousands of wounded, and especially those with debilitating injuries are difficult to quantify but it is certainly in the millions of USD.

C. Destruction of Property

There has also been significant physical destruction of private and public assets—buildings, infrastructure, and vehicles—due mainly to the Israeli army’s use of heavy weapons, including rockets, tank shells and high-caliber automatic weapons. In addition, the Israeli authorities have bulldozed hundreds of dunums of Palestinian fruit orchards and agricultural land and infrastructure near Israeli settlements and by-pass roads. Israeli settlers have also engaged in the destruction of Palestinian private property. Such destruction has been particularly pronounced in Rafah, Khan Yunis, Beit Jala, Beit Sahur, Hebron, Tulkarem and Qalqilia.

One report, covering the period 28 September—9 November, documents partial or total destruction by Israeli heavy weaponry of 431 private homes, 13 public buildings, 10 factories, 14 religious buildings and 67 incidents of firing on ambulances and/or medical personnel. In addition the report documents 69 cases of bulldozed orchards and agricultural structures. 25/ While the value of such damage is difficult to calculate, it is at least in the tens of millions of USD. 26/


D. Public Sector: Revenue Losses and Increased Social Spending

There have also been significant losses to the public sector in the form of lost revenues. Domestic income and VAT revenues have been reduced due to the lower levels of domestic income caused by disruptions in production and reduced labour flows to Israel. External revenues, mainly customs and VAT revenues associated with imports from Israel and abroad, have been reduced by lower commodity flows caused by movement restrictions and by reduced consumer demand. In 1999, 63 per cent of all PA revenues were in the form of transfers of receipts collected by Israeli authorities under the terms of the Paris Protocol of 1994. 27/ Since early October—a seven-week period—the clearance revenues transferred by Israel to the PA have been well below the anticipated amount owed, seriously straining the liquidity position of the PA. 28/

On the expenditure side, the PA Ministry of Health and the Ministry of Social Affairs have had to increase the level of spending to cope with the large number of killed and wounded Palestinians, the destruction of homes, and the rising needs generated by rising unemployment and hardship. The combined effect of reduced revenues and increased expenditures which the PA Ministry of Finance warns may raise the fiscal deficit to USD 100 million in the year 2000—about four times its anticipated level before the onset of the crisis. 29/ In 1999, some 55 per cent of PA expenditures were for public employee salaries. 30/ Reduced revenue transfers would make it more difficult for the PA to provide timely salary payments for upwards of 115,000 public sector employees in November.

Most PA agencies have been operating at reduced levels for the entire period of the crisis. This has been due to the inability of many employees to reach their jobs because of internal closures imposed by the Israeli authorities. Thus the volume of public services has been reduced and there have been disruptions in institution-building and capacity development projects, many of which are supported by donor and multi-lateral sources. Likewise, the crisis has resulted in a significant reduction in donor-funded infrastructural development projects due to the lack of security, the evacuation of project personnel, reduced operating hours of public agencies and to the lack of some materials required for such projects. 31/ The overall impact is to disrupt and delay the building of a more efficient public sector and a better physical infrastructure, both necessary ingredients in creating long-term economic viability.


VI. Longer Term Impact

The longer the crisis persists, the more serious will be the social and economic consequences. The initial impacts of the mobility restrictions and border closures have been lower levels of income and employment and increased levels of poverty. As household consumption is further reduced, the secondary effects will be to further dampen domestic output, income and employment (a reverse multiplier effect). While this process has already begun, unless relief to Palestinian households is provided in the coming months, the extent of the humanitarian crisis will likely worsen.

The crisis seems to have brought to an end more than three years of economic recovery and progress. As noted above, the recovery from the crisis of 1996 was robust enough to substantially reduce unemployment rates, stem the decline in real wages, and reduce poverty rates. There had also been some significant progress in the rehabilitation and expansion of physical infrastructure and in institution-building projects. 32/ Much of this progress has been undermined in the past two months.

Another effect of the strife is the increased perception of political risk on the part of domestic and foreign investors—both current and potential. Private investment and trade—the key underpinnings of sustainable economic growth and development—while still weak, had shown some progress in the three years prior to the present crisis. As a result of the current situation, the PT will be seen as riskier place to invest for the long term. Evidence suggests that there has been a precipitous decline in interest by investors, even among those who have submitted applications for tax exemptions and other incentives under the law. 33/ This will threaten the short- and long-term growth of the Palestinian economy and reduce the rate of income and employment growth in the future. This is especially worrisome given that the rate of growth of the Palestinian labour force exceeds the growth of the population in general.

With the prolonged absence of Palestinian labourers from job sites in Israel, Israeli employers will seek to find alternative sources of labour supply, particularly in construction activities. This may result in an expansion of the foreign labour policy that began some 10 years ago. Under this policy, tens of thousands of Southeast Asian and Southeastern European workers have been brought to Israel to provide labour to Israeli employers who previously relied on Palestinian workers. Over the longer term, this would limit further the extent of Palestinian employment across the Green Line. Likewise, Palestinian exporters may lose out more permanently as customers in Israel and abroad find alternatives to Palestinian suppliers who cannot reliably deliver their goods due to movement restrictions imposed by the Israeli authorities. These effects would have long term negative consequences for the growth and development of the Palestinian economy, will raise levels of unemployment and further dampen investment prospects.

Notes

1/ The Gaza Airport has been closed for 65 per cent, the Rafah passenger terminal for 42 per cent, and the Allenby/Karameh bridge passenger terminal for about 8 per cent of the days during the reporting period. UNSCO estimates based on data and information from Palestinian border authorities.

2/ UNSCO estimates based on data and information from Palestinian border authorities.

3/ In a recent opinion poll, 74 per cent of respondents reported that internal closures had prevented them from visiting relatives in the Palestinian Territory while 77 per cent indicated that such closures had prevented them from reaching their places of work. See “The Palestinian Intifada and the Peace Process, 6-8 November 2000,” Development Studies Programme, Bir Zeit University, Public Opinion Poll 2, 13 November 2000. Based on interviews of a representative sample of 1,234 Palestinians in 75 locations in the West Bank and Gaza Strip.

4/ UNSCO, “The Impact on the Palestinian Economy of the Recent Confrontations, Mobility Restrictions and Border Closures, 28 September—19 October, 2000,” Gaza, 19 October 2000.

5/ The GDP estimate is based on Palestinian Central Bureau of Statistics (PCBS) National Accounts in Current Prices 1998, December 1999 (in Arabic) with PA Ministry of Finance and IMF real growth estimates for 1999 and 2000. Estimates include East Jerusalem and are expressed in 1998 prices. The normal work year in the Palestinian Territory excludes Fridays (the weekend) and the two key Muslim holidays—Eid Al Fitr and Eid Al Adha.

6/ This estimate assumes a gradual decline in output during the first days of the crisis reaching 50 per cent by the end of the first week and thereafter. It is assumed that public and private services, internal and external trade and construction activity, which collectively account for more than 75 per cent of the GDP, have been severely affected by work interruptions. The relative weights for various economic branches are taken from PCBS National Accounts 1998. It is noteworthy that the Ramallah and Bethlehem Chambers of Commerce, based on field surveys, report reductions of 40 and 80 per cent in business and commercial activity in their respective governorates, while the Ministry of Industry estimates an 80 per cent reduction in manufacturing output. See Ramallah Chamber of Commerce, 1 November 2000 (in Arabic); Bethlehem Chamber of Commerce, 6 November 2000; PA Ministry of Industry, 18 October 2000 (in Arabic).

7/ This is based on an estimated average flow of 122,000 workers earning approximately NIS 2,129 per month and using the average 1999 exchange rate of USD 1 = NIS 4.15. Estimates based on PCBS Labour Force Surveys.

8/ Labour flow estimates and wage rates are based on PCBS Labour Force Surveys Nos. 16-17 which cover the first half of 2000 and on PCBS population estimates for the West Bank and Gaza including East Jerusalem. This estimate includes permitted labour flows of 23,000 from the West Bank and 27,000 from Gaza, informal labour flows from the West Bank of 60,000 and about 15,000 workers from East Jerusalem who require no work permits. The average wage rate is calculated by use of the average exchange rate of USD 1 = NIS 4.

9/ UNSCO estimate based on reports from border villages in the northern West Bank and Palestinian National Security Force-Northern Command, Gaza. Reports suggest that some Israeli employers have assisted Palestinian workers to reach jobs in Israel. During the week of 8 October, the Israeli authorities issued 15,000 “closure-proof” work permits for Gaza workers and 9,000 for West Bank workers. The permits were distributed to workers by the Palestinian Ministry of Labour. However, Israeli border authorities denied entry to workers holding such permits. See Ministry of Labour, “Losses to Workers and the Palestinian National Authority Due to the Closure and Siege, 29 September—18 October, 2000,” Gaza (in Arabic). On 14 November, the Israeli authorities further tightened the internal closure on towns and villages in the West Bank and began to constrain internal movement between the northern and southern parts of Gaza.

10/ Information and assistance provided by the Palestinian crossing authorities, October-November 2000.

11/ According to UNSCO estimates, economic interactions between the Palestinian and Israeli economies take place on an average of 277 working days each year (i.e. calendar days minus Muslim and Jewish holidays and weekends)--about 23 days each month. The export losses are underestimated since they exclude the significant amount of unregistered West Bank exports to Israel, Palestinian exports to third countries and Palestinian agricultural exports (which are not subject to VAT). Agricultural exports average about USD 150,000 per day according to the Ministry of Agriculture, Ramallah, 17 October 2000.

12/ Truckload volume through the Karni/Muntar crossing in October was only 54 per cent that of September. Import volume was 58 per cent of September volume while export volume was only 41 per cent of September volume. Estimates based on data and assistance provided by the Palestinian Border Forces, Muntar Crossing, November 2000.

13/ Estimates of the value of external trade are based on data from the Palestinian Ministry of Finance, September 2000.

14/ Adding trade losses to GDP losses would result in double counting. It should be noted that the GDP includes the value of wages and profits paid to workers and owners of producing establishments. Assistance provided by the PCBS, November 2000.

15/ See PA Ministry of Planning and International Cooperation, “Quarterly Monitoring Report of Donor Assistance,” 30 June 2000.

16/ Estimates for domestic losses are based on a six-day work week while those related to transactions with Israel are based on a 5.5-day work week. During the reporting period, there were 60 calendar days. It is assumed that normal internal economic activities would have taken place, in the absence of the movement restrictions, on 51 of these days—i.e. the calendar days minus Fridays (the weekend). It is also assumed that normal labour flows to Israel would have taken place on 44 days—i.e. the calendar days minus all Saturdays and Jewish holidays.

17/ See “The Palestinian Intifada and the Peace Process, 6-8 November 2000,” Development Studies Programme, Bir Zeit University, Public Opinion Poll 2, 13 November 2000.

18/ Based PCBS Labour Force Surveys, 1997-2000.

19/ First-half 2000 average unemployment rate is based on PCBS Labour Force Surveys, Nos. 16 and 17. Unemployment estimates for October and November are UNSCO estimates based on PCBS data.

20/ Based on the PCBS Labour Force Surveys for the first half of the year, the labour force is estimated at 650,000 persons. The estimate of the number of unemployed includes the 70,000 persons—11 per cent of the labour force—who were unemployed prior to the crisis; 110,000 persons previously employed in Israel—about 17 per cent of the labour force; and an estimated 82,000 persons disemployed by reduced internal economic activity due to mobility restrictions—another 12 per cent the labour force. See Ministry of Labour, “Losses to Workers and the Palestinian National Authority Due to the Closure and Siege, 29 September—18 October, 2000,” Gaza (in Arabic). The Palestinian General Federation of Trade Unions has estimated unemployment in Gaza at 50 per cent and 35 per cent in the West Bank. See “PGTFU’s Strategy Plan to Face the Recent Crisis,” November 2000. In op cit Bir Zeit University Public Opinion Poll, 69 per cent of respondents reported that some member of their family had lost employment due to the crisis.

21/ Based on data from PCBS, in the first half of 2000, there were approximately 580,000 employed persons in a total population of about 3 million. This yields a ratio of about 4 non-working persons for each working person.

22/ In September 2000, prior to the crisis, there were 33,864 family hardship cases (119,551 individuals) registered with the PA Ministry of Social Affairs. The Ministry estimates that by end-October, there were at least 20,000 new cases registered and that this trend would accelerate in November. UNRWA reports that in the third-quarter of the year there were 24,334 refugee families receiving special hardship assistance. The World Food Programme (WFP) reports that they are already distributing food to 13,000 hardship cases (65,000 individuals) in the PT through the Ministry of Social Affairs. In the next three months, the WFP is planning to distribute food aid to 51,500 additional families (257,500 individuals). Information provided by the Ministry of Social Affairs, UNRWA and the WFP, November 2000. In op cit Bir Zeit University Public Opinion Poll, 85 per cent of respondents reported that their family living level had been negatively affected by the crisis.

23/ See World Bank “The Impact of Prolonged Closure on Palestinian Poverty,” (revised) 20 November 2000. The World Bank report builds on the National Commission for Poverty Alleviation Palestine Poverty Report 1998 (Ministry of Planning and International Cooperation). The World Bank report notes the high correlation between availability of work in Israel and lower poverty rates in the PT.

24/ Data and assistance provided by the Palestinian Ministry of Health, 27 November 2000.

25/ Al Mezan Center for Human Rights “The Destruction of Civilian Properties and the Comprehensive Closure of the Occupied Palestinian Territory,” 9 November 2000, Jabalia, Gaza. Documentation of bulldozed agricultural land and property in the report includes Gaza only. Data on damage to factories is from Ministry of Industry “Report on Economic Losses to the Manufacturing Sector,” (in Arabic), Gaza, 21 November 2000. This report covers the period before the intensive Israeli air bombardment of Gaza on 20 November in which at least 13 other public buildings were struck.

26/ As of early November, the PA Ministry of Finance had estimated the value of destroyed property—both public and private—in the tens of millions of USD. See Minister’s statement to the Local Aid Coordination Committee, Gaza, 3 November 2000, p. 2. Since then further amounts of destruction has taken place.

27/ See PA and IMF, “West Bank and Gaza; Economic Policy Framework, Progress Report,” 31 May 2000.

28/ Based on information from the IMF, November 2000. Furthermore, Israeli press accounts suggest the possibility that transfers might be withheld altogether.

29/ Furthermore, the PA has found it difficult to effect salary payments for the month of October due to the revenue shortfall and inconsistent transfer of clearances from the Israeli Ministry of Finance. This has led to the use of funds from the European Commission’s Special Cash Facility established because of similar problems in 1997. See Minister Nashashibi’s statement to the Local Aid Coordination Committee, Gaza, 3 November 2000, p. 4. In addition, the PA received some budgetary assistance from Saudi Arabia in November.

30/ See op cit PA and IMF, “West Bank and Gaza; Economic Policy Framework.”

31/ Based on information from various donors and the World Bank, October-November 2000. Reports in the press suggest that the Israeli authorities have ordered a halt to cement and construction material shipments related to the Gaza port and Gaza power station projects. See Ze’ev Schiff “Moderate Policies Could Be Tested by Extreme Acts,” Ha’aretz (website), 11 October, 2000.

32/ See UNSCO Report on the Palestinian Economy, 1997-2000. These bi-ennial reports are available on website: www.unsco.org.


Gaza, 30 November 2000


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