Media coverage
Al Jazeera Net · 2008-10-09
The article says Gaza’s economy has largely remained outside the global financial crisis because of the blockade, isolation, and paralysis affecting most of its sectors, although fluctuations in the dollar can still harm its fragile economy. Experts argue that the more significant impact may fall on Palestinian Authority resources and foreign aid, while the Palestinian market itself remains only minimally affected because it is highly local and banks operate under very conservative policies supervised by the Palestinian Monetary Authority.
The article says Gaza’s economy has largely remained outside the global financial crisis because of the blockade, isolation, and paralysis affecting most of its sectors, although fluctuations in the dollar can still harm its fragile economy. Experts argue that the more significant impact may fall o…
The Palestinian economy in the Gaza Strip remained insulated from the global financial crisis facing financial markets and the economies of a number of countries around the world. This is due to the Strip’s forced isolation and the state of paralysis that has afflicted most of its facilities as a result of the blockade and the destruction that preceded it at the hands of the Israeli military war machine.
Although the high degree of interconnectedness in transactions among the countries of the world means that any disruption in any one of them has negative repercussions on currency and monetary and economic stability, Gaza may be among the least affected by financial collapses.
Dr. Muin Rajab, Professor of Economics at Al-Azhar University in Gaza, said that the Strip is under economic siege, but it is not completely isolated for anyone wishing to carry out any transactions, because the blockade does not hinder such transactions.
He explained to Al Jazeera Net that the Palestinian economy is not completely isolated from developments on the international scene, especially the financial crisis that emerged in the United States, noting that fluctuations in the dollar exchange rate, up and down, have negative repercussions on Gaza’s fragile economy, because the dollar is one of the most widely used currencies in the deposits and savings of individuals and institutions.
Rajab, however, downplayed the likelihood that the impact of the financial crisis would be reflected in the economy of the Gaza Strip compared with other regions of the world, because the conditions of blockade and occupation have imposed a state of economic recession, slow growth, and paralysis in most productive sectors.
Economic analyst Omar Shaban agrees with Rajab that the damage inflicted on the Palestinian economy in the Gaza Strip long predates any impact from the current crisis.
He believed that one aspect of the damage lies in what would affect the Palestinian Authority as a whole, based on the existing transactions related to grants coming from donor countries, which represent a large and essential part of the resources of the Palestinian people and are affected whenever the value of the dollar declines against other currencies.
Shaban said in a telephone interview with Al Jazeera Net that the Israeli economy constitutes the source of the imbalance, as it is the one that primarily possesses international relations and linkages, while the Palestinian economy is subordinate in most cases.
Excluding impact, Sadeq Farwana, General Manager of the Securities Brokerage Company, ruled out any impact of the financial crisis and global recession on the Palestinian market, since it is entirely a local market.
He told Al Jazeera Net that the Palestinian economy and market have been suffering from recession since 2000. Nevertheless, major Palestinian companies maintained high profits during the years of the Intifada, reaching high growth rates in 2004 and the years that followed.
Farwana explained that the Palestinian economy’s exposure to the international financial crisis is psychological, and that there is no actual effect on the ground, because companies and markets in the Palestinian territories follow the local market, whether in relation to the banking sector, telecommunications, or pharmaceuticals.
He pointed out that the local character of the Palestinian market and its lack of connection to the global economy keep it insulated from global financial crises, noting that Palestinian banks operate under very conservative banking policies supervised by the Palestine Monetary Authority, which allows banks to operate within certain parameters that have protected them from having overseas investments that would expose them to major losses.
Text © Al Jazeera Net — archived here with attribution to the source. — Machine translation for archival reference. — Original source