Gaza economy collapsing, says World Bank

New York – The Palestinian economy in the Gaza Strip is collapsing under a decade-long blockade, as well as decisions by the Palestinian National Authority and US government to reduce payments to the area, the World Bank said Tuesday.

The economy contracted by 6 per cent in the first quarter of 2018, and there are indications of further deterioration since then, the report said. Unemployment is at 70 per cent, and every second person is living in poverty. The report will be presented to the biannual meeting of the Ad Hoc Liaison committee, an international donor group for Gaza, in New York on Thursday.

“A combination of war, isolation, and internal division has left Gaza in a crippling economic state and exacerbated the human distress,” said Marina Wes, World Bank country director for the West Bank and Gaza. “The economic and social situation in Gaza has been declining for over a decade but has deteriorated exponentially in recent months and has reached a critical point.”

Gaza, which sits on the Mediterranean coast, is fenced in by heavily-patrolled barriers on three sides bordering Israel and Egypt.

The report also warned about conditions in the West Bank, which is governed by the PNA.

“While the West Bank situation in not as dire currently, past consumption driven growth is faltering, and the economy is expected to slow considerably in the coming period,” the report said.

The bank urged Israel to lift restrictions on trade and allow movement of goods and people, and said the PNA should initiate policies and projects for sustainable economic development. The report refers only obliquely to Hamas’s role in Gaza’s crisis, citing the need for “legitimate institutions to govern Gaza in a transparent and efficient manner.”

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