Media coverage
Al Bayan · 2006-12-30
The report describes 2006 as a harsh and economically disastrous year for Palestinians in the West Bank and Gaza Strip because of the cutoff of international aid, Israel’s suspension of tax revenue transfers, and repeated border closures, which led to the interruption of salaries for about 170,000 public-sector workers and the disruption of basic services and vital projects. It also points to a sharp decline in government revenues and public spending, rising prices, capital flight, and heavy damage to Palestinian infrastructure as a result of Israeli military operations, especially in the Gaza Strip.
The report describes 2006 as a harsh and economically disastrous year for Palestinians in the West Bank and Gaza Strip because of the cutoff of international aid, Israel’s suspension of tax revenue transfers, and repeated border closures, which led to the interruption of salaries for about 170,000…
By the end of 2006, Palestinians in the areas under the Palestinian Authority in the West Bank and Gaza Strip were bidding farewell to a harsh year in terms of economic and living conditions, due to the cutoff of international aid.
Palestinian economic analyst Omar Shaban says that “2006 was the worst in dozens of years.” He explains this by saying that “in addition to the obstacles to which the Palestinian people had become accustomed, such as the prolonged closure of crossings,
and the bulldozing of agricultural crops, this year was compounded by the economic siege, the suspension of aid by the international community, and Israel’s refusal to pay tax revenues estimated at $700 million, which led to the interruption of salaries for nearly 170,000 workers in the various sectors of the Palestinian Authority.”
However, the impact of the siege was not limited only to the Authority’s inability to pay salaries; it went beyond that to the cessation of all basic health and educational services and assistance to the poor and marginalized among Palestinian society.
Vital projects and infrastructure and agricultural projects also came to a halt. The economic siege and the repeated closure of crossings caused a huge rise in the prices of consumer goods and raw materials, as confirmed by official statistical reports.
The Consumer Price Index indicates a price increase of 1% during the first quarter of the year compared with the fourth quarter of 2005, and an increase of 0.7% during the second quarter compared with the first quarter of this year.
The index rose by the same percentage during the third quarter of the year compared with the preceding quarter. As for the private sector, the year was marked by the flight of capital and the relocation of hundreds of factories and large and small projects to neighboring Arab countries.
Luay Shabaneh, President of the Palestinian Central Bureau of Statistics, said that the latest reports issued by the Bureau indicate that government revenues during the year amounted to about $370 million, compared with about $1 billion during the previous year, a decline of 71%.
The Israeli government’s suspension of the transfer of tax revenues is considered the main reason for this decline, as it constitutes about 60% of the total revenues of the Palestinian Authority, and the decline in these revenues in 2006 compared with the previous year is estimated at about 92%.
Despite this, the value of grants received by the Palestinian Authority during the first nine months of 2006 amounted to about $550 million, and it is estimated that their value would reach about $760 million by the end of the year, more than double what was granted during the previous year, which amounted to $352 million.
In addition, official statistical reports showed that government expenditures
declined by as much as 36%, as the financial payments disbursed to employees during the period from April to September amounted to nearly $270 million out of their total entitlements, estimated at about $600 million during that period.
The decline in salary and wage expenditures between the two years is estimated at about 32%, and the decline in operating expenditures is also estimated at about 38%. The Palestinian economy also suffered other losses resulting from Israel’s large-scale military operations in the Palestinian territories,
especially in the Gaza Strip, such as Operation “Summer Rains,” carried out by the Israeli army in response to the kidnapping of Israeli soldier Gilad Shalit by armed Palestinian groups.
A report by the United Nations Development Programme’s Programme of Assistance to the Palestinian People stated that heavy losses were inflicted on Palestinian infrastructure as a result of the destruction of bridges, facilities, and farms through Israeli bombardment.
Text © Al Bayan — archived here with attribution to the source. — Machine translation for archival reference. — Original source