`50% of Palestinians below poverty line'
By Ora Coren
Haaretz, November 23, 2004
After four years of intifada, nearly 50 percent of Palestinians live below the poverty line, and 16 percent cannot afford even the basic necessities, according to a report to be published today by the World Bank.
Entitled "Four Years - Intifada, Closures, and Palestinian Economic Crisis," the report states that a quarter of the Palestinian workforce is unemployed, and the income of the remainder has dropped by a third compared to the situation before the intifada.
The report attributes the economic crisis to Israel's closure policy, which limits the movement of people and merchandise from the territories to Israel and the settlements. "Without major changes in the closure regime and significant progress in the Palestinian reform program to improve the climate for private investors, there is no prospect of a sustained recovery of the Palestinian economy," the report states.
The World Bank estimates that immediate removal of the closure will increase GDP by 3.6 percent, but will not affect the poverty and unemployment rates.
The crisis could end if Israel opens the Palestinian Authority's borders to foreign trade, which would enable GDP to grow by 9.2 percent by 2006, reducing unemployment by 23 percent and cutting the number of people living below the poverty line from 56 percent today to 46 percent. If donor countries increased their aid to the PA by $1.5 billion, the number could drop further to 37 percent.
To encourage a growth-oriented economy, the report says reforms in the Palestinian Authority should increase transparency in the management of finances and include the creation of an independent auditing mechanism, the privatization of public enterprises, and adherence to existing laws on public procurement. There is also a need to improve the infrastructure of the court system and to reduce the wage bill.
