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French Version

Palestinian economy crawls under occupation, maintains development

Ten-year-old Ibrahim certainly doesn’t care much about the outcome of the forthcoming Israeli elections, but only thinks of how to sustain his family’s livelihood. He joins his schoolmates during the two-week winter recess, selling chewing gum and other stuff in the streets of Ramallah and Jalazoun Refugee Camp, where he lives, to earn some much needed cash for his five-member family.

Ibrahim’s father is unfit to work because of his illness. His case is prevalent in the Palestinian society as the unrelenting 27-month Israeli clamp down on the Palestinians continues.

Rates of poverty and unemployment are rife among Palestinians in the West Bank and Gaza Strip. Statistics released by the Palestinian National Authority (PNA) show that more than 75 percent of the Palestinian workforce is unemployed, and poverty tears down more than 70 percent of the 3.5 million people.

The PNA statistics indicate the economy registered more than $8 billion in losses under the crushing weight of the Israeli military actions since September 2000. An additional $3 billion are also calculated as indirect losses, including $900 million in debts.

The real Palestinian GDP declined last year by 55 percent. And the Palestinian companies have incurred damages estimated at more than $42 million.

Despite the havoc, Palestinian economists believe the economy there can recover if the PNA follows certain procedures to sustain development. They note the PNA must ensure the real basics to establish a strong and correlative infrastructure for trade and industry in the Palestinian areas.

The Palestinian Trade Center called in December for special relief and industry-rehabilitation programs to assist the development in all the economic sectors.

The center conducted an assessment last year to define the impacts of the Israeli occupation on the Palestinian trade sector. It also recommends the

Palestinian authority to work on export-readiness programs to maintain its access to world markets.

Palestinian economist Fuad Hamdi Bseiso, however, sees no chance for the Palestinian economy to regain strength unless it separates from the Israeli economy.

“We need first to have a political and economic stability before taking up any further steps,” Bseiso told The Star. “Hence, our economic policies must be conducted in a way to encourage the local industries and enhance the commercial sector.”

Bseiso, who is former president of the Palestinian Monetary Fund in the 1990s, indicated the real growth in Palestinian economy requires several factors, including the freedom of trade and a powerful business environment.

Such factors, he said, are still viable despite the occupation. “Israel is losing much in its conflict than the Palestinians,” he explained.

With a war on Iraq looms and the heat of Israeli elections gets warmer, Bseiso warns the coming stage in the Palestinian-Israeli conflict will be critical.
“Signs of peace prevail in the region, but these could be deceptive as the Jewish community still refuses to admit the Palestinian rights on their land,” he said.
“The Palestinians can sustain their struggle but the Israeli can’t.”

Economist Mohammed Saqr agrees. “The Israeli economy today is regarded as a banisher to investments and capital market,” said Dr Saqr, professor of economics at the University of Jordan and specialist in Israeli economy.

Israeli Statistics Bureau estimated the losses in the economy at around $10 billion, emerged from the two-year conflict. Most of the losses are registered in the tourism sector, as statistics show that more than one-third of the hotels in Israel have closed down and dismissed their employees.

The Israeli currency, the shekel, lost 2 percent in its devaluation to the US dollar since 1 January. The same can be said about Israeli GDP, which declined by two percent since 2000.

The Israeli bureau has also pointed to rising rates of unemployment, registering more than 14 percent. Israeli commentators often slam Prime Minister Ariel Sharon for his rushing towards war at the expanse of the economy.

“Sharon prefers to uphold his [Jewish] settlements in the Palestinian territories but refuses to show reason in its dealing with peace,” said Yehuda Litani, analyst at the Israeli daily, Yediot Ahronot. “Having security means showing it. Building a strong economy for Israel means supporting the Palestinians to have their own, too.”

Saqr said the Jewish state is facing its toughest times. “All the indications show the Israeli economy is waning gradually in view of the ill-fated policies of its government,” he told The Star. Saqr said the annual income per capita in Israel is dropping, as more Israelis abandon their homes and emigrate to the west looking for better lives there.

“It should be noticed here that Israel is a dependent economy on foreign aid, mainly from the US,” said the university professor, who relates to the recent Israeli appeal for the US to grant $12 billion in support of the economy. “The Israelis still don’t realize their overspending on security and military operations cost them more than one-third of the budget. This won’t bring them security any more.”

Bseiso noted that Israel’s ill-natured policies in its conflict with the Palestinians stem from its uncertainty towards peace. He maintains that Israel’s harsh economic performances were the reasons behind the failing of former Israeli governments.

Bseiso called on all Palestinians, both in the government and the private sector, to join their efforts together to sustain, what he called, “The resistance economy.”

“We need to take lessons from the world, especially North Korea, to rebuild our economy independently from any influences,” he said. “The current stage of our struggle against Israel is appropriate to launch our resistance economy to show our competence in dealing with the consequences of occupation.”

Bseiso notes the PNA’s 2003 fiscal budget, valued at $1.28 billion, promises a lot for the economy, but remains worthless in view of the current Israeli onslaught. He also referred to the strong financial sector in the PNA areas, which maintained its vigor and capacity to aid Palestinians with their needs of cash.

Both Bseiso and Saqr criticized lack of Arab aid to the Palestinian economy. “The Palestinian financial sector has one of the most developed infrastructures in the region,” Bseiso said. “However, it is alone can’t achieve our objectives to subdue the occupation. We need to see all the economic sectors in the Palestinian areas work mutually with political reforms to build strong economy in future.”

Ghassan Joha
The Star

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