“Two Years of Intifada, Closures and Palestinian Economic Crisis” identifies three main reasons why the battered economy has not collapsed. The most important is the cohesion and resilience of Palestinian society.
Lending and sharing are widespread and families for the most part remain functional, despite economic hardship and severe disruptions to daily life. Another critical factor has been the continued delivery of basic services by the PA. Third, donor support has been essential ¯ particularly budget support to the PA, which employs one-third of those still working and pays half of all wages earned in the West Bank and Gaza. Donor disbursements as a whole doubled from pre-intifada levels to US$929 million in 2001, and increased again in 2002 to just over US$1 billion.
The report warns that confrontation and closures will continue to throttle the Palestinian economy, with each passing month making ultimate recovery more difficult.
“Continued high levels of donor assistance are vital, but they cannot prevent further economic decline. Under closure, every additional billion in foreign aid will only pull down the poverty rate by about 6 percentage points. This is not a crisis that can be resolved with money alone,” says Nigel Roberts, World Bank Country Director for West Bank and Gaza.
Lending and sharing are widespread and families for the most part remain functional, despite economic hardship and severe disruptions to daily life. Another critical factor has been the continued delivery of basic services by the PA. Third, donor support has been essential ¯ particularly budget support to the PA, which employs one-third of those still working and pays half of all wages earned in the West Bank and Gaza. Donor disbursements as a whole doubled from pre-intifada levels to US$929 million in 2001, and increased again in 2002 to just over US$1 billion.
The report warns that confrontation and closures will continue to throttle the Palestinian economy, with each passing month making ultimate recovery more difficult.
“Continued high levels of donor assistance are vital, but they cannot prevent further economic decline. Under closure, every additional billion in foreign aid will only pull down the poverty rate by about 6 percentage points. This is not a crisis that can be resolved with money alone,” says Nigel Roberts, World Bank Country Director for West Bank and Gaza.