Palestinian economy recovery halted by latest events
Up until recent developments in Israeli-Palestinian affairs, the economies in the West Bank and Gaza Strip were beginning to show signs of rebound. A recent report prepared by the Palestinian Monetary Authority (PMA) reveals that the “economic conditions in the Palestinian territories are worse today than before 1992.”
PMA governor, Fuad Bsiso, has recently told Al-Bayan newspaper that Israeli policy over the last seven years has generated more than $7 billion in losses to the Palestinian economy. However, it appeared that the Palestinian economy was turning around — at least until recent events interfered.
Trade between Israel and the Palestinian Authority (PA) had been on the rise since January 1999. In that month, some 1,650 trucks entered Israel through the Qarni checkpoint, whereas 1,230 entered Gaza. This balance of trade took on very different numbers in July of this year, with 2,880 trucks entering Israel and 4,950 entering Gaza Strip. Yet, it is safe to say that figures for upcoming statistical periods will pale in comparison.
Unemployment statistics show that more and more Palestinians are finding work in the local market, whereas not as many are working in Israel. Various reports indicate a strong decrease in the number of unemployed. In 1996, unemployment stood at 23.8 percent; in 1997, 22 percent; in 1998, 14.4 percent; in the second quarter of 2000, falling to 8.8 percent. Overall, as reported in Al-Bayan, quoting from a Palestinian official in the PMA, 34,800 workers enter the Palestinian labor force annually, and only 44,000 are authorized to work in Israel.
Wages in the Palestinian Territories tell a tale of two stories. As a result of the increased participation rates, the Palestinian Central Bureau of Statistics stated that this has “put upward pressure on wages.” Comparisons between the 1999 second-quarter daily wages and the 2000 second-quarter daily wages show that Palestinians working in Israel experienced a 6.4 percent increase, up from NIS 104.5 to NIS 111.2. However, daily wages in the West Bank and Gaza Strip were much lower even though they did also experience a similar increase over the same period. West Bank daily wages jumped 6.9 percent — NIS 64.9 to NIS 69.4; whereas, daily wages in the Gaza Strip witnessed only a two percent increase to NIS 54.3, up from NIS 51.9.
The Palestinian economy, however, may be in for some tough times ahead, based on an International Monetary Fund report published in July. The growth of the Palestinian National Authority beyond its budgeted means may have repercussions in the near future. The IMF report projected the Palestinian labor force to reach about 112,500 workers, increasing the payroll by more than $ 60 million. Already, under the present fiscal conditions, the Palestinian National Authority has over hired significantly. In the first quarter of 2000 alone, 4,257 new employees were added to the payroll, exceeding the 2000 budget of 3,410 new employees.
Behind the increased number of public servants working for the PA, participation rates have been on the rise in 2000, reaching 42.5 percent in the second quarter, a 1.7 percent increase over first quarter figures. Figures quoted from the Palestinian Minister of Treasury in Al-Quds newspaper, before the Intifadat al-Aksa erupted, show that the economic growth rate in 1999 was 4.6 percent and is expected to reach 6.5 percent in 2000. However, as a result, such optimistic predictions are not likely to be met. — (Albawaba-MEBG)