11 - 17 April 2002
Issue No.581
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Al-Ahram Weekly Online 11 - 17 April 2002 Issue No.581 |
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"Helplessness, deprivation and hatred"
Israeli closures are to blame for Palestinian economic desolation, says a World Bank report
Around the world, crowds mass to protest Israel's treatment of the Palestinians. Governments mutter darkly. But amid the sound and tumult, a quieter complaint may have a more far-reaching impact. Jasper Thornton looks at a report that has just been released by the World Bank on the travails of the Palestinian economy since the Intifada began. And it includes a withering attack on that most quotidian of Israeli repressions: the checkpoint.
"Fifteen Months - Intifada, Closures and Palestinian Economic Crisis" (The Assessment) is the result of a World Bank study, prepared with technical support from the UN and the Norwegian government. The bare facts it publishes about the Palestinian economy make sobering reading. Three times as many Palestinians are now out of work as they were when the Intifada began, and a third of the workforce has no job. Real incomes have dipped lower even than the exiguous levels seen in the late 1980s, having plummeted 30 per cent . Every other person in the occupied territories (not, incidentally, a term the report uses, preferring "the West Bank and Gaza"), is now classed as poor -- scraping by on less than two dollars a day. This is twice as many as in late 2000. The Palestinian Authority is bankrupt, with its austerity budget of March 2001 of $90 million undermined by its stuttering revenue collection of a mere $20 million a month. Hostilities have destroyed $305 million worth of property, while real term Gross National Income losses are put at $2.4 billion.
The report, however, accounts for all in an unexpected way. The main reason for these horrendous figures, it says, is Israeli closures, among which it includes internal checkpoints and borders in the occupied territories, closure of the border between Israel and the occupied territories and the sealing of international borders with Jordan and Egypt. This, the report says, has a far larger economic impact than the fighting, as it ruins all chances of moving goods and labour properly. The report also laments Israel's withholding of half a billion dollars-worth of Palestinian Authority revenue since December 2000.
Speaking about the closures, Nigel Roberts, director of the World Bank in West Bank and Gaza, said, "If they are lifted, the Palestinian economy will recover. But if they persist or intensify, the economy will eventually unravel. Public services will break down. Unemployment and poverty will continue to climb. Helplessness, deprivation and hatred will increase, and this unique chance for reconciliation will pass."
That the Palestinian economy has survived at all, the report attributes to many causes. It praises the Palestinian Authority for managing the crisis well and keeping up basic services and rehabilitation efforts. It also says that since work in Israel nearly ceased in the first week of the Intifada, 50,000 Palestinians from the West Bank have again found work in Israel and its settlements. It also points to the thrift of individual households and aid from donors.
But this cannot last, says the bank. Households have exhausted savings. Unemployment, for all the emergency schemes, is scarcely dented. The PA is wallowing in borrowing and cutting salaries and payments. Its arrears totalled $430 million by the end of 2001, most of which was owed to Palestinian companies. And serious health and environmental problems are beginning to emerge.
Israel must cease its closures forthwith, says the report, dismantling all internal checkpoints and border restrictions. Tax revenues must be released, and regular revenue clearances resumed. Donors, the bank warns, must also be prepared to release up to 1.7 billion in emergency funds, if Israel's policy of closure worsens.
The PA, the report says, must maintain strong budgetary discipline and should develop an emergency plan "involving civil society." The bank would also like the Palestinians to concentrate on medium-term development. But it admits that in times like these, their priority is likely simply to be bare survival.
The full text of "Fifteen Months - Intifada, Closures and the Palestinian Economic Crisis" is available at the World Bank's Web site.
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