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IMF: Palestinian economy 'facing serious risks'
Published Thursday 20/09/2012 (updated) 22/09/2012 19:57
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Palestinians protest against the high cost of living in Bethlehem
Sept. 10, 2012. (MaanImages/Eleonora Vio, File)
BETHLEHEM (Ma'an) -- The Palestinian economy is facing serious risks, with a slowdown in growth and rise in unemployment in both Gaza and the West Bank, the International Monetary Fund said Thursday.

A new report says the West Bank’s real GDP grew by an annual average rate of 9 percent, but growth declined to 5 percent in 2011 and the first quarter of 2012, while unemployment rose to 19 percent in the first half of 2012 from 16 percent in the same period last year.

"The economic slowdown reflects continued fiscal retrenchment combined with severe financing difficulties, declining donor aid especially from regional donors, and slower easing of restrictions on movement and access," the report said.

In Gaza, after a rebound in its real output by over 20 percent on average in 2010–11 following the easing of tight restrictions, growth has declined to 6 percent in the first quarter of 2012, and unemployment has risen to 30 percent from 28 percent in the same period last year.

With persisting restrictions, financing difficulties with aid shortfalls, and stalemate in the peace process, "there is a high risk of a continued economic slowdown, a rise in unemployment, and social upheaval," the report said.

World Bank

On Wednesday the World Bank warned of a deepening fiscal crisis in the Palestinian economy in its latest report, urging donors to act immediately.

The twice yearly document, prepared to inform a PA donor meeting in late September, stresses that sustainable growth can only be driven by strong private sector investment and access to Area C is vital to enabling private sector growth.

"Donors do need to act urgently in the face of a serious fiscal crisis facing the PA in the short term," said Mariam Sherman, World Bank Country Director for the West Bank and Gaza.

"But even with this financial support, sustainable economic growth cannot be achieved without a removal of the barriers preventing private sector development, particularly in Area C."

The report notes that Area C, the 60 percent of the West Bank under full Israeli control, holds most of the natural resources, agricultural land, and land reserves in the West Bank.

Access to these resources could play a significant role in providing an economic foundation in the development of industries such as construction, telecommunications, agriculture and tourism, the report says.
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1 ) Brian Cohen / Israel
20/09/2012 13:55
What's more important: a peace treaty and probably economic growth, or delaying the inevitable by making excuses for why the Palestinians can't negotiate? Lack of leadership. Lack of vision. Inability to offer responsible government than Hamas. The inability to take the brave (and possible personally fatal) decision to give up on replacing Israel with a single Palestinian state. Yes, the leader who signs the final treaty with Israel will probably get the Nobel Prize. And a bullet from Hamas.

2 ) Developement / World
20/09/2012 13:55
Everybody knows that palestinians can not have access to Area C unless they return to the negotiation table and negotiate conflict resolution in a good face. So, my guess - there is no even need to talk about Area C now - palestinians are not going to negotiate, but heading to UN to obtain non-member observer status. While they will be "observing" something somewhere, Israel will annex and decvelop Area C unilaterally. That when development would come to Area C, but Area will be called “Israel”.

3 ) Tibi / Tubas
20/09/2012 15:08
An economy based upon begging for international donations is NOT really much of an economy, and IF "sustainable economic growth cannot be achieved without private sector development, particularly in Area C,"
then WHY HASN'T THE PLO NEGOTIATED for Area C, as promised at Oslo??


4 ) Money / Crisis
20/09/2012 15:15
Palestinians should focus on anti-movie protests. That along can helps them to resolve economical difficulties great deal. UN and UNESCO membership would help also.

5 ) Tibi / Tubas
21/09/2012 06:19
1- Negotiations leads to Statehood, and an end to the "serious risks", 2- Refusing to Negotiate leads to more "occupation" without end, and 3- PALESTINIANS HAVE A CHOICE (1 or 2) TO MAKE !!!

6 ) @ Money Crisis #4 / PROSPERITY
21/09/2012 21:52
The PA's money crisis results from:
-1- a dependance upon international donations, which were never intended to continue as long & as much, as they have already, and
-2- an econmy unable to produce anything effectively, which derives from NOT having either Real Statehood or Existing Trade Treaties, which can ONLY BE ACHIEVED THROUGH NEGOTIATIONS with Israel !!

7 ) southparkbear / usa
22/09/2012 01:58
palestinians can help lowering unemployment by relinquishing international fund to the Jewish state that will develop area C and hire palestinian workers
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