Palestinian children play in the Shati refugee camp in Gaza City on September 13, 2013
Palestinian children play in the Shati refugee camp in Gaza City on September 13, 2013. © Mohammed Abed - AFP/File
Palestinian children play in the Shati refugee camp in Gaza City on September 13, 2013
Last updated: September 19, 2013

Palestinians: economy cannot grow under occupation

The Palestinian Authority has warned that its economy cannot grow under Israeli occupation and restrictions, echoing the findings of an International Monetary Fund report.

"Without an end to the Israeli occupation... and its prohibitive restrictions... private sector-driven sustainable economic growth is unattainable," said a PA report released ahead of a September 25 meeting in New York of donors to the Palestinians.

The IMF last week urged Israel to ease financial restrictions on Palestinians, warning that the Palestinian economy would otherwise not be viable.

The PA's report, entitled "Unlocking Statehood" and published on Tuesday, said the restrictions included "the siege on the Gaza Strip and Israeli restrictions on 'Area C' and (annexed) east Jerusalem."

Area C is parts of the West Bank under full Israeli control.

"Unleashing the potential for economic development, particularly in 'Area C,' by granting Palestinians full access to their lands and natural resources would result in a cumulative GDP growth of 40 percent," it said.

While helpful at present, "donor-induced growth is unsustainable in the long term."

The IMF report also said that the West Bank and Gaza Strip's economic prospects were "dim under (the) status quo," and called for the removal of "obstacles to growth (such as) Israeli restrictions," including on imports to the Palestinian territories.

It predicted that Palestinian GDP growth would slow from 11 percent in 2011 and 5.9 percent in 2012 to 4.5 percent by the end of this year.

Israel this week announced it would allow building materials banned for six years -- such as cement -- back into Gaza, in a move the Strip's Hamas officials said was positive but insufficient.

International experts have been working on a plan to boost the stagnant Palestinian economy.

They hope that, hand in hand with movement in the peace process, the scheme could produce tangible economic benefits on the ground to alleviate dire unemployment and poverty.

US Secretary of State John Kerry unveiled the broad contours of a scheme to attract some $4 billion in private-sector investment over the next three years at a World Economic Forum in Jordan in late May.

But similarly ambitious US-led plans by past administrations have faltered, and a blanket of secrecy has been thrown up as Quartet special envoy Tony Blair and his team hammer out the details with the aid of international experts.

The IMF says the PA faces a budget deficit of $300 million (225 million euros) by the end of 2013.

The PA puts unemployment in the Palestinian territories at 20.6 percent, with youth unemployment at 29.1 percent in the West Bank and 54.2 percent in Gaza.

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