The
economy shrank 1% in 2004, one in three Palestinian workers was
jobless at the end of last year and 61% of households had income below
the poverty line of $350 per month, the UN Conference on Trade and
Development said in its annual report on the occupied territories on
Thursday.
"Put simply, in the wake of the past four years
of Israeli occupation and war, the Palestinian economy invests and
produces less and therefore consumes more imports, especially those
from Israel," the report said.
Palestinian net imports
from Israel represent two-thirds of the total trade deficit of $2.6
billion, it said. Some 80,000 workers formerly employed in Israel must
also be absorbed.
The Palestinian Authority
must now focus on reducing widespread poverty and boosting production
to revive its war-torn economy, the UNCTAD report said.
Ability to produce
But
the barrier or wall Israel is building inside the West Bank will
further erode the fragmented Palestinian production base and resources
and "people's ability to feed themselves," it said.
Israel says the wall is a security measure and is intended to keep out bombers.
|
"Put simply...the
Palestinian economy invests and produces less and therefore consumes
more imports, especially those from Israel"
UN Conference on Trade and Development report |
Earlier
this week Israel finished evacuating all 21 Jewish settlements in Gaza
and four of 120 in the West Bank, part of its plan to withdraw
completely from Gaza, where some 8500 Israeli settlers lived close to
1.4 million Palestinians.
The Palestinian
intifada, or uprising, against Israel's occupation of the West Bank and
Gaza, broke out in 2000 when peace talks stalled. Israel had occupied
both territories since the 1967 Middle East war.
Occupation-related distortions
"The
top priority at this stage of the Palestinian economy's development is
to focus on poverty reduction while nurturing productive capacity,
eliminating occupation-related distortions and laying the ground for
sustainable economic recovery," the UNCTAD report said.
The
estimated opportunity cost to the economy over the past five years,
representing the value of goods and services that were not produced
because of conflict between Israel and the Palestinians, is estimated
at 6.4 billion, while capital stock losses are estimated at $3.5
billion during the period.
"Economic realities on the ground after the prolonged
conflict remain very harsh and uncertain, regardless of all the
positive developments we've witnessed recently," Raja Khalidi, the
report's main author, told a news briefing. "In both Gaza and the West
Bank, challenges of recovery are overwhelming."
Distortions due to decades of Israeli occupation and
dependence on the Jewish state must be corrected before the future
Palestinian state turns to trade liberalisation, the report
added.