With Palestinians going through “one of the most dramatic and difficult periods of their troubled history,” microcredit can play a vital role for survival and recovery in the occupied territory, a senior United Nations official said today.
“Palestinian small businesses and micro-enterprises face formidable challenges as they operate in a state of economic and financial siege that is limiting their capacity for normal development and growth, with markets severed from customary trading partners,” said Filippo Grandi, Deputy Commissioner-General of the UN Relief and Works Agency (UNRWA), which cares for millions of Palestinian refugees.
“Much has been said – and rightly so – about restrictions imposed upon the movement of people and goods in and around the West Bank and Gaza,” he noted at a signing ceremony in Vienna for a $4.5 million contribution by the OPEC Fund for International Development (OFID) to UNRWA, referring to Israel's closure of crossings.
“By continuing to support micro-enterprises in difficult political and economic times, UNRWA is making a commitment toward survival, recovery and transition,” he added.
Mr. Grandi said the unique partnership between OFID and UNRWA through the PalFund had created a resource of hope that PalFund clients can draw on to secure their businesses, sustain their lives and invest in the education and health of their families.
OFID's earlier contribution of $2.5 million enabled UNRWA to finance over 2,600 loans to Palestinian micro-enterprises. As clients repaid these loans, UNRWA was able to finance a further 6,600 loans worth $7.5 million. Thus, over the past three years the PalFund financed over 9,200 micro-enterprise loans valued at just under $10 million, almost a quarter of which were to women micro-entrepreneurs.
The latest contribution will extend the PalFund to almost $7 million, making OFID the largest single sponsor of UNRWA's microfinance activities – activities that have financed a portfolio of 118,500 loans worth $126 million to Palestinian micro-enterprises over the past 15 years.
“In these difficult times, Palestinians – and the Palestine refugees whom UNRWA continues to serve – need above all concrete signs to rebuild hope and confidence. These signs are crucial for the much-threatened stability and prosperity of the Middle East,” Mr. Grandi said.
The contribution will help “combat the dangerous symptoms of economic despair and loss of dignity, by providing crucial resources that Palestinian households and businesses can use to build a better future,” he added.
Meanwhile, the UN Conference on Trade and Development (UNCTAD) released its annual report on its assistance to the Palestinian people, showing that the Palestinian economy’s recent slide has led to such a focus on emergency needs that concerns for the overall economic viability of the territory have had to be put on hold.
The report states that alternate trade routes and more predictable public revenues are necessary to revive the Palestinian economy in the face of closures and restrictions at its border crossings, especially in the Gaza Strip.
It says Palestinian trade could be exported through port facilities in Jordan and Egypt as a way of helping to “break the territory’s isolation and reduce dependence on Israeli port facilities,” according to a press release accompanying the report.
A cost-benefit analysis by UNCTAD indicates that these alternate routes and facilities provide services that are competitive in time, quality and cost to those of Israel.
The report stresses that it is most important to shift the debate from security issues to ensuring there is a secure flow of trade across the region.