Israel-Palestinian Authority trade almost halved

Trade declined 44% in 1999-2002. The Palestinian economy has lost $4.5 billion since the intifada started.

Officially reported trade between Israel and the Palestinian Authority (PA) has fallen from NIS 10.4 billion at 2002 prices to a projected NIS 5.8 billion in 2002, a 44% decrease. According to the forecasts, Israel will export NIS 4.69 billion of goods to the PA in 2002 and import NIS 1.13 billion. Unreported trade (illegal and trade along the seam line) fell by an estimated NIS 2 billion.

These figures were reported at a press conference held on Tuesday by the Israel Defense Forces (IDF) coordination command for government activities in the territories, attended by Coordinator Maj.-Gen. Amos Gilad. Head of economics branch of government activities in the territories Lieut. Col. Isaac Gurvich estimated the losses to the Palestinian economy since September 2000 at $4.5 billion, excluding indirect economic damages.

Damages include loss of income from employment in Israel, loss of trade in seam line towns, increased unemployment from the fall in economic activity, a fall in total exports to Israel, a decline in the Jericho casino’s revenue, lower tax collection, and damage to tourism.

Unemployment in the territories is an estimated 336,000, including 36% of the West Bank population and 56% of the Gaza population. Poor people constitute 58% of the West Bank population and 85% of the Gaza population, poverty being defined as income of up to $2.10 per day.

Gilad said that the IDF attached great importance to the humanitarian issue, since the figures show the deteriorating economic situation of the Palestinian population. He added that the IDF was fighting terrorism, not the population, and security needs, not an attempt to punish, were the sole reason for the restrictions imposed.

Four months ago, a plan to prevent the situation from deteriorating further was submitted, in order to enable the population to live reasonably normal lives and preserve essential systems, such as water, electricity, etc. “The plan does not treat all the territories as a single entity. Distinctions are made according to field conditions, and possible aid to the population is considered in each area,” Gilad said.

As of now, work permits have been approved for 22,000 Palestinians, of which 16,596 are issued and valid. In addition, 3,000 West Bank Palestinians have been granted work permits for the olive harvest in Israel, of which 2,445 are actually being used. These permits will also be usable for the citrus harvest season.

Another 8,000 one-day permits, of which 5,854 are issued and valid, have been granted to Palestinians merchants and businessmen: 5,000 in the West Bank and 3,000 in Gaza.

Gurvich said fully exploiting the potential of the employment possibilities granted to the Palestinian population would directly and indirectly create 41,000 jobs and provide a living for 230,000 people. This would increase the Palestinian national income by $250-300 million and reduce unemployment by 11%.

Annual Palestinian per capita GDP has declined from $1,900 before the violence started to $1,300 at the end of 2001, and is expected to fall below $1,000 at the end of 2002.

In view of the economic distress and long-term strategic considerations, the IDF coordination command has prepared a plan for directly creating 120,000 jobs in the PA, at a cost of $1.8 billion, to be financed by donor countries.

Published by Globes [online] - www.globes.co.il - on November 7, 2002

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