A UN report issued by the World Bank revealed on Monday that the decline in aid from donor countries, last year’s war in the Gaza Strip and the freeze of tax revenues due to the Palestinian Authority during the first trimester of this year have caused severe damage to the Palestinian economy. According to the report, the Palestinians have been getting poorer over the past three years as a result of the political, security, economic and social conditions imposed on them.
The World Bank report will be presented this week to the Ad Hoc Liaison Committee (AHLC). It recommends reforms to the current general economic trends to halt further deterioration in the economy. The World Bank Country Director for the West Bank and Gaza, Steen Jorgensen, said that the current situation in the Palestinian territories will lead to an increased level of anxiety and uncertainty that will cast a shadow on the Palestinians’ ability to imagine a brighter future.
The report pointed out that a quarter of the Palestinians are living under poverty conditions while the unemployment rate in the Gaza Strip exceeded the barrier of 60 per cent in addition to the low GDP per capita. The Palestinian Central Bureau of Statistics said that the unemployment rate in the Palestinian territories as a whole is nearly 25 per cent. The UN Conference on Trade and Development (UNCTAD) report, meanwhile, revealed that 72 per cent of Gaza’s population suffer from food insecurity.
The Cairo International Conference for the reconstruction of Gaza resulted in pledges to provide a total of $5.4 billion in financial aid, including about $2.6 billion for the reconstruction of Gaza. The report points out that only 35 per cent of the donors’ pledges made in the Cairo conference have actually reached Gaza.
The Palestinian Authority could lower some financial challenges by reducing the public wage bill or 50 per cent of its expenditure, insists the World Bank. The report also recommends the Palestinian Authority to make further efforts to improve tax collection and continue to push towards reforms in the health and electricity sectors.