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UN agency urges international aid for Palestinian economy on brink of collapse

UN agency urges international aid for Palestinian economy on brink of collapse

The recently intensified crisis in the occupied Palestinian territory has set the Palestinian economy on the path of "de-development," the United Nations Conference on Trade and Development (UNCTAD) warned today, as it urged more international aid.

In its annual report on assistance to the Palestinian people, UNCTAD notes that tightened mobility restrictions since April 2002 have created a situation in the Palestinian territory that resembles "complex humanitarian emergencies" characterized by severe economic conditions.

The Palestinian Authority (PA) has been forced into heavy dependence on donor support to maintain emergency and basic activities, diverting its attention away from key development objectives, UNCTAD says. This renders even more urgent the need for concerted efforts to identify strategies to set the Palestinian economy on a path of recovery - a "still-elusive" goal that remains intertwined with the achievement of peace and security in the region.

The report offers stark statistics, noting that close to half of the Palestinian population is now living on less than $2 a day. Unemployment has soared - from 10 per cent in September 2000 to 34 per cent by this July - leaving at least 200,000 Palestinians of working age without a job. That figure can climb up to 600,000 during curfews. The income losses are mainly due to the recurrent internal and border closures, which have become increasingly stringent since April.

According to the report, these effects on the Palestinian economy are unlikely to be easily reversed, even if stability is attained, because people have exhausted their resources and are now unable to survive without outside aid. Effectively bankrupt and increasingly dependent on donor aid, the PA faces a severe budget deficit.

"Regardless of how capable, streamlined and transparent the PA proves to be in economic management and policy-making, it has to contend with an economy beset by deep-seated structural weaknesses and imbalances arising from prolonged occupation," UNCTAD states. Meanwhile, the institutionalization of Israeli mobility restrictions has worsened the humanitarian crisis and complicated efforts to address development needs, since the impact of the emergency situation is likely to continue even after stability has been attained.

The report calls for rehabilitation efforts that can reinforce the economy's capacity to withstand the crisis, especially through emergency job creation programmes. For its part, UNCTAD has stepped up its technical assistance activities in support of the area's development.

The report will be reviewed at next month's meeting of the UNCTAD Trade and Development Board, to be held in Geneva.