The economy of the Gaza Strip in “free fall”

Finance

JERUSALEM | The economy of the Gaza Strip is in “free fall”, cuts in the payments of the Palestinian Authority and the United States amplifying the effects of the Isrelian blockade and placing in a “critical” situation the enclave led by the Hamas, estimates the World Bank (BM).

The new WB report, a 38-page document, will be presented Thursday in New York to the Ad Hoc Liaison Committee (AHLC) coordinating international donor support to Palestinians.

On the same day, Palestinian Authority President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu must address the UN General Assembly separately.

Mined by Israel’s more than a decade-long blockade of Gaza to contain the Islamist Hamas movement, the Gaza economy has been further weakened recently by a “combination of factors,” all contributing to a decline in liquidity, according to the report.

Among these factors, the WB mentions in particular the decision of the Palestinian Authority to reduce its monthly payments in Gaza by $ 30 million, and those of the administration of US President Donald Trump to cut 50 to 60 million annual aid to Gaza. the enclave.

President Abbas is seeking to put pressure on Hamas to allow the internationally recognized Palestinian Authority to regain a foothold in Gaza, which the Islamist movement ousted in 2007.

The Trump administration cut more than $ 500 million in aid to Palestinians in 2018, and stopped providing financial support to the UN agency for Palestinian refugees (Unrwa), a key player in Gaza.

“The economic deterioration in Gaza and the West Bank can no longer be offset by foreign aid, which is steadily declining, and by the private sector, which remains limited because of movement restrictions, and restrictions on access to basic materials. and on trade, “says the WB.

The Gaza Strip recorded a negative growth of -6% in the first quarter, which seems to have deteriorated further since, according to the same source.

A trend with alarming consequences, according to the report, which states that one in two Gazans fall below the poverty line and that unemployment affects 53% of the population, 70% among young people.

“The economic and social situation in Gaza has been declining for a decade, but has deteriorated exponentially in recent months and reached a critical point,” said Marina Wes, WB Director for the Occupied West Bank and Gaza.

On September 20, UN envoy for the Middle East, Nickolay Mladenov, told the Security Council that Gaza could “explode from minute to minute”.

Enclosed between Israel, Egypt and the Mediterranean, the Gaza Strip is under Israeli and Egyptian blockade.

The Palestinian territory is controlled since 2007 by Hamas, considered as terrorist by Israel. Both sides have fought three wars since 2008.

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