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Omar Shaban Ismail · Sama News Agency · 2020
On the occasion of the Palestinian Authority's semi-annual donor meeting in Brussels, attended by about 40 countries and institutions, Omar Shaban sets out the indicators in the international reports: a projected contraction of 7% or 11% in 2020 instead of 2.5% growth; international funding down from 27% of gross domestic income in 2008 to 4% in 2019; unemployment of 24% in the West Bank and 42.7% in Gaza; a financing gap above $1.5 billion; poverty expected to reach 14% in the West Bank and 53% in Gaza; and a 30% cut in spending in the emergency budget. He concludes that donors' capacity to help is limited because they face crises of their own, and that Palestinian unity and radical reform of Palestinian institutions are unavoidable.
Omar Shaban, June 2020: COVID-19 and the clearance crisis deepened the PA’s crisis while donors struggle; unity and reform are unavoidable.
Today in Brussels, the Donors’ Conference for the Palestinian Authority is being held, a semi-annual meeting convened in Brussels and in New York. Around 40 countries and relevant international institutions are participating in the meeting. Before the meeting are documents and economic reports from several bodies such as the World Bank, the Quartet, and the United Nations. These reports review economic performance in the previous period and include recommendations and proposed alternatives. These are some indicators of the current situation and the foreseeable future: –
The Palestinian economy had been expected to grow by 2.5% in 2020. With the coronavirus crisis and its repercussions, a contraction of 7% is expected if a return to normal conditions is swift, and 11% if the crisis continues until the end of 2020.
The repercussions of the coronavirus crisis on the Authority’s fiscal situation were catastrophic because they came after the liquidity crisis in 2019 caused by the suspension of the transfer of clearance revenues with Israel. The situation was bad before the arrival of the coronavirus.
International funding for the Palestinian Authority has been in continuous decline: from 27% of gross domestic income in 2008 to only 4% in 2019.
The economic growth rate in 2018 reached 1.2% in the West Bank, the lowest since 2003. Meanwhile, the rates were zero in the Gaza Strip in 2018 and negative at 3.5% in 2019.
Unemployment rates continued to rise, reaching 24% in the second half of 2019 in the northern governorates and 42.7% in the Gaza governorates.
The budget financing deficit for 2020 is expected to rise to more than one and a half billion dollars.
In the short term, the crisis of the Palestinian economy will continue, and indeed deepen further with the coronavirus crisis and its repercussions, which will undoubtedly affect living standards and poverty. The proportion of families living below the poverty line is expected to reach 14% in the northern governorates and 53% in the Gaza governorates.
The emergency budget prepared by the Authority under the conditions of the coronavirus crisis anticipates a 30% reduction in public expenditures as a result of the sharp decline in revenues.
The reports present ideas and proposals for economic and financial policies to enable the Authority to overcome the crisis, including developing the technology sector and the telecommunications sector, and developing programs for social welfare and solidarity. All the international reports submitted to today’s Donors’ Conference concluded by saying: “The alternatives available to the Palestinian Authority to overcome the crisis are limited.”
All the reports affirmed that the persistence of Palestinian division and the Israeli restrictions on crossings and between governorates are among the main causes of the ongoing economic and financial crisis for years.
The reports appreciated the Authority’s early efforts in confronting the coronavirus crisis and its success in limiting its repercussions.
In conclusion: –
The liquidity crisis in 2019, the coronavirus crisis since the beginning of March, the current political crisis with Israel, and the restrictions imposed under the agreements have made the present situation and the future a bleak one. The ability of the international community to help will remain limited, as it was in the past. The donor countries themselves are experiencing enormous economic crises because of the coronavirus crisis, which will reduce the level of their support for the Palestinian Authority.
There is no alternative but to strengthen internal factors, achieve Palestinian unity, and introduce radical reforms to the Palestinian institution so that together we can overcome these multiple and compounded crises.
Topic: Palestinian Economy — donor meeting · COVID-19 · PA fiscal crisis · unemployment — Text © Sama News Agency — archived here with attribution to the source. — Original source