- The Washington Times - Wednesday, December 18, 2002

GAZA CITY, Gaza Strip The Palestinian economy has been operating far below productive capacity since the uprising in September 2000 because of political instability and economic sanctions imposed by Israel.
Palestinian Authority officials, economists and trade unionists say the long-term Israeli military measures imposed on the West Bank and Gaza Strip have damaged the Palestinian economy, especially the private sector and the daily life of the population.
Ghassan Al Khatib, the Palestinian Authority's minister of labor, said the continued Israeli curfews, closures and isolation of cities, towns and villages in the Palestinian territories have paralyzed the economy.
Salah Abdel Shaffi, a Palestinian economist, said that a weak and deteriorating Palestinian economy in the West Bank and Gaza "would certainly lead to a humanitarian disaster that would not only affect the Palestinian territories, but might expand to other neighboring countries."
A survey prepared by the Palestinian Federation of Industries reported that the deterioration in the economy accelerated after April's massive Israeli military incursions into the West Bank and Gaza Strip, and after two-thirds of the Palestinian population were placed under curfew.
"The Israeli measures deprive more than half a million Palestinian workers from reaching their work at Palestinian factories that produce different kinds of products that support the Palestinian economy," said Mr. Al Khatib.
Before the outbreak of the intifada, 120,000 Palestinians worked in Israel and 500,000 more worked in the private sector in areas such as construction, agriculture and industry in the Palestinian territories.
After the escalation of violence, in particular the Palestinian suicide bombings in Israel, Israel closed its borders, reduced the number of Palestinian workers and imposed restrictions on their entrance into Israel.
The survey said that preventing tens of thousands of Palestinian workers from going to jobs in Israel had brought the daily losses from unemployment to $3 million daily. That did not include other losses in business, agriculture and industry.
It said the total daily losses of the Palestinians as a result of Israeli measures had reached $5 million a day.
Sa'eed Mudallal, chief of the Palestinian Authority employment department, said that about 10,000 workers from the Gaza Strip and few hundred workers from the West Bank have work permits and have been able recently to work in Israel.
As the armed and bombing attacks in the Palestinian territories and into Israel increased, Israel imposed a curfew on the population and tightened the siege imposed on Palestinian cities, towns, villages and refugee camps.
"These measures increased the unemployment rate to 70 percent in the territories, and made more than half of the population live under the poverty line," said Mr. Al Khatib. "The United Nations and the International Labor Organization are asked to work together to end these measures."
The Palestinian Trade Center found that 232 companies were engaged in export activities before the intifada. They were concentrated in such sectors as manufacturing, agriculture, information technology, services and trade.
The center said the products were exported to Jordan, Gulf countries, Western and Eastern Europe, and the United States. Many of these companies have suspended exports and now direct their production to the local market only.
Of all companies included in the survey, 46 still export regularly while others export a small amount only on demand, depending on conditions.
"Obstacles and impediments [have been] imposed by the Israeli authorities on the movement of goods and people at manned checkpoints and blockades throughout the West Bank," said Rasim Al Biari, head of the Gaza trade union.
Palestinian Trade Center findings indicate that nearly 75 percent of Palestinian firms are individually or family owned in the West Bank and Gaza. This is mainly because most businesses are small and do not require sophisticated partnerships structures.
The total number of employees in Palestinian manufacturing firms surveyed has decreased by 45 percent since the start of the uprising. West Bank firms have let go nearly a third of the work force, with Gaza industry retrenching by more than 55 percent.
"Israeli measures, especially those instituted since the beginning of the intifada, have severely restricted the movement of Palestinian goods and people. That results in lower production utilization," said Mr. Al Biari.
He said other damage includes "curtailment of marketing and distribution of products and services that inevitably led to the downsizing of the Palestinian labor force."

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