Publication
Omar Shaban Ismail · QudsNet · 2019
An analytical reading of the World Bank report on the Palestinian economy and the bleak indicators it reveals regarding Palestinian livelihoods.
The World Bank will present its report on the Palestinian economy at the donors' conference scheduled to be held at the end of this month, "April 2019", in the Belgian capital, Brussels. The report foresees difficult indicators for the Palestinian economic situation. What follows is a summary of what this report, which has not yet been published, contains.
• The Palestinian economy witnessed "no real growth" in 2018: the economy in Gaza contracted by around 7%, while the West Bank performed weakly, at less than 1%. Population growth, meanwhile, reached 3%, which curbed the Authority's capacity to provide the services made necessary by that increase in population.
• The report focuses on the highly negative effects of Israeli policy on the prohibition or rationing of the entry of dual-use goods into the Palestinian territories, and not into the Gaza Strip alone. It reviews the impact of that policy on Palestinian economic sectors, among them: pharmaceuticals, the dairy and food industries, the chemical industries sector, the technology industries sector and others.
• The report calls on the Israeli government to ease the restrictions on dual-use goods that it applies to the areas of the West Bank and the Gaza Strip. The report affirms that, should these restrictions be eased, the economy in the West Bank would grow by 6%, and by a greater rate in the Gaza Strip that could reach 11% in 2025.
• The average unemployment rate in the Palestinian territories reached 31%, which is 2.4% higher than in 2017. In the West Bank it stands at 17%, while unemployment among those of working age in Gaza reached 52% in 2018, against 44% in 2017. The unemployment rate among graduates in the Gaza Strip is the highest in the world, reaching 68% overall and 76% among female graduates.
• 46% of the population of the Gaza Strip live below the poverty line, estimated at five and a half dollars a day, whereas this rate stands at 9% in the West Bank.
• The report warns that the financing gap in the Authority's budget will widen from 400 million dollars in 2018 to more than one billion dollars in 2019. The warning came in the wake of the recent Israeli measures deducting 138 million dollars from the Palestinian clearance revenues that Israel collects on the Authority's behalf under the Paris Economic Protocol, and after the Palestinian Authority refused to accept what remained of the tax revenues in protest at this.
• Clearance transfers contribute 65% of the Authority's public revenues and 15% of total Palestinian national income.
• The Authority succeeded in reducing the public expenditure bill by 8% in 2018 compared with the previous year, and the salary bill by 16%. This is due mainly, "according to the report", to the reduction of salary levels for the Authority's employees in the Gaza Strip and the termination of the contracts of thousands of them. The report states: according to the Palestinian Ministry of Finance, the number of public sector employees shrank by 23,500 employees — 500 from the northern governorates and 23,000 employees from the Gaza governorates.
• The expected rate of real growth in the West Bank will not exceed 1% in the coming years (2019-2021), a rate too low to meet the needs of population growth and the demand for job opportunities; unemployment and poverty rates are therefore expected to rise.
• The banking sector in Palestine continues to turn a profit despite the poor economic conditions, with the volume of assets in this sector reaching 15 billion dollars. The loan-to-deposit ratio is around 50%, most of which goes to commercial facilities and the real estate sector, and a small share of which goes to the industrial and other productive sectors.
• The Palestinian National Authority's indebtedness to the banks reached 1.5 billion dollars, and employees' indebtedness to the banks stands at 2.8 billion dollars — that is, the indebtedness of the two together came to 4.3 billion dollars in 2018, representing 38% of the total banking facilities extended.
• The volume of international support amounted to 718 million dollars in 2017 (the Arab share of it 543 million), and international support fell to 676 million dollars in 2018 (the Arab share 516 million dollars).
• Saudi Arabia is the largest Arab donor, with 92 million dollars in 2017; the Saudi contribution rose to become 222 million dollars in 2018. The World Bank's contribution amounted to 76 million in 2017 and fell to 10 million in 2018.
The report presents a pessimistic picture of the prospects for the Palestinian economy, with the continuation of the Israeli measures and of President Trump's policy towards the Authority and UNRWA and the suspension of its projects in the Palestinian territories, as well as with the decline in some Western and Arab funding — without overlooking the continuing negative impact of the Palestinian division on the economic and social situation.
Topic: Palestinian Economy — Text © QudsNet — archived here with attribution to the source. — Original source