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Gaza economy on the 'verge of collapse' as the international community fails to deliver on aid promises

by Jessica Purkess      28 May 2015    Middle East Monitor

 Gaza's economy is on the verge of collapse, with the coastal enclave suffering from the highest rate of unemployment in the world. [File photo]

Today in Brussels, the World Bank will present its devastating report on the economic situation in Gaza before the bi-annual meeting of the ad hoc liaison committee, a forum of donors which coordinates international donor support for the Palestinians. The report comes almost a year since the beginning of the last war in Gaza.

Released late last week, it is a depressing read. It states that Gaza's economy is on the "verge of collapse", with the coastal enclave suffering from the highest rate of unemployment in the world. It also says that Gaza has been "tremendously damaged" by the repeated armed conflicts, the blockade and Palestinian political divisions, which have all caused its economy to be "reduced to a fraction of its estimated potential".

The report estimates that Gaza's GDP would have been four times higher than it currently is if it weren't for the lethal combination of the multiple conflicts and restrictions. The closure of the Egyptian tunnels and the latest war has shaved USD460 million off the Strip's output, while the blockade which has been in place since 2007 has shaved 50 percent off Gaza's GDP, according to the report.

It goes on to say that the economic decline has had a severe impact on the livelihoods of Palestinians, particularly in Gaza. On a per capita basis, the Palestinian economy is estimated to have declined by 3 percent in 2014. Overall unemployment has increased to 27 percent and youth unemployment in Gaza had soared to more than 60 percent by the end of 2014 – the highest in the region. Gaza's total real GDP is only a couple of percent higher now than it was in 1994.

The key to bringing an end to this cycle of war and human suffering is to rebuild Gaza's economy. The reports states three issues that must be tackled to make this a possibility. Firstly, it says that there must be a unified Palestinian government. The blockade on the movement of goods and people must also be lifted in order for "Gaza's tradable sectors to recover". There must also be substantial donor support to rebuild Gaza's infrastructure and homes

In October at a conference in Cairo the international community banded together to provide this kind of sustainable donor support. Countries promised $5.4 billion of aid to help Gaza rebuild following the summer war. The World Bank is leading a stocktaking exercise to assess the disbursement and implementation progress of the support pledged at the conference.

Sadly, the report highlights that countries have not stood by their pledges. Although $5.4 billion was the figure widely publicized, only $3.5 billion of it was actually allocated to Gaza. As of late April, donors had given only 27.5 percent of this figure, or $967 million. However, only 35 percent of the aid pledged - or $1.2 billion - was actually "fresh", with the majority coming from reallocated donations and emergency funding delivered as the bombs were still falling, according to IRIN. Of this new aid, just 13.5 percent - or $165 million - has come through.

States that pledged most have failed to follow through. Qatar has delivered just 10 percent of the $1 billion it promised. Saudi Arabia, Turkey and Kuwait between them have handed over just over $50 million of the $900 million they pledged. The World Bank had no data on the United Arab Emirates' $200 million, while 84 percent of the United States' $277 million pledge has been delivered. The European Union's $348 million has a 40 percent delivery rate.


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Dan Cohen, Correspondent for Mondoweiss says Gaza looks the same as it did the day of the ceasefire and this is an intentional policy of de-development -   May 25, 2015

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I”m Sharmini Peries coming to you from Baltimore.

Not a Single House Has Been Rebuilt One Year After Israeli War on Gaza


The World Bank says Gaza has the worst unemployment rate in the world with an estimated 43 percent of the population without jobs, and it has a poverty rate of 39 percent. This comes days after the Pentagon approved a $1.8 billion deal selling bombs and munition to Israel. Joining us from Gaza City to discuss all of this is Dan Cohen. Dan is a correspondent for Mondoweiss, based in Israel and Palestine.

Thank you so much for joining us, Dan.

DAN COHEN, CORRESPONDENT, MONDOWEISS: Good to be with you and find a little bit of electricity here in Gaza.

PERIES: So let's do this interview while the electricity is still on. So you're in Gaza City, obviously. Describe for us what you've been observing over the last few days with 43 percent unemployment. What does this look like on the ground?

COHEN: Well, Gaza looks at this point, eight months after the final ceasefire that ended Operation Protective Edge last year, Gaza looks about the same as it did on the day of the ceasefire. There has been a very small amount of rebuilding. One very sobering statistic is that not a single house that was completely destroyed has been rebuilt. A lot of the reconstruction efforts have, promises of $5.4 billion to rebuild Gaza, have not been fulfilled. And this is because Israel, Egypt, and the Palestinian authority have colluded to prevent reconstruction.

And so additionally as you mentioned, the economy is devastated, and it's an intentional policy of de-development, we could call it, where all sectors of the economy are under siege, and it's really horrendous on the ground.

PERIES: Dan, a few weeks ago we spoke to Pernille Ironside, who works for UNICEF on the ground in Gaza. She was reporting that the condition of children's health is deteriorating. She also reported that 70 percent of the budget needed in order to deliver basic healthcare and education and temporary housing for people in Gaza affected by Operation Protective Edge has not come through. So what are people doing at the moment? How are they dealing with their basic needs?

COHEN: I mean, it's really kind of a bare-knuckle life here in Gaza for many. I'm in central Gaza City right now, which is slightly more affluent. But in the border areas that were hit the hardest, neighborhoods like Shuja'iyya and Beit Hanoun, [Hosea]. These neighborhoods were largely leveled by Israeli shelling. And the survivors are basically living in the rubble. Some homes are still half-standing and there are families living in there. And as summer approaches it's going to be a very devastating time and difficult to sweat it out in the rubble.

PERIES: And yet despite criticism of the world, the United States is providing $1.8 billion in a deal to Israel. No one, absolutely no one seems to care about what's happening to the people on the ground. What do you make of this?

COHEN: Yeah. This massive arms deal comes as Israel's most right-wing government in history has just been elected. And this is, this is a really disturbing precedent, as the weapons that President Obama has just given Israel were used in, to target--specifically to target civilians last summer. The bunker-busters, which Israel just received 750 of, which were designed for Iraq to take out underground facilities, were used last summer to destroy residential and commercial towers that have no military value. Very similar to the tower that I'm in right now. Last summer on the final night of the ceasefire, after the terms of the ceasefire had been agreed to, is when Israel decided to start taking out landmark towers in Gaza with the bunker-busters, just like--American-provided bunker-busters like they have received once again.



So everyone in Gaza, everyone in Israel knows it's just a matter of time until we see it happen again, and it's a disturbing thought to think that the tower I'm in is a potential target and could be a smoldering pile of rubble with hundreds of people homeless just like last summer.



PERIES: You were just making reference to the new government that has been sworn in as of May 14th. Are there any efforts on their part to address the issues of Palestinians?



COHEN: No. I would say that's a definite no. I mean, the new government, the new Israeli government is the most right-wing in history. And Netanyahu, Benjamin Netanyahu's coalition consists of hard right-wing figures, like Ayelet Shaked, who last summer during Operation Protective Edge made a Facebook post calling for a genocide of Palestinians, in which she said Palestinian mothers should be killed in order to prevent them from birthing little snakes. You have Naftali Bennet, who has been appointed to the, he's the Education Minister. And he was quoted as saying, I've killed lots of Arabs and there's nothing wrong with that.

So it's these sort of extremist figures that have taken control of the Israeli government, and it's a frightening prospect of what kind of violence that will bring on Gaza, as well as the West Bank, and for Palestinians inside Israel. So the prospects for peace, for justice, are really nil as long as Israel continues on this trajectory.

PERIES: That's Dan Cohen with Monoweiss, in Gaza City. Thank you so much for joining us.

COHEN: Thanks for having me.

PERIES: And thank you for joining us on The Real News Network.