World Bank calls for regional economic cooperation
As Palestinians welcome the raising of the Palestinian flag at the United Nation as a symbol of an emerging state, the economic news from the West Bank and Gaza Strip was troubling. For the third year in a row, Palestinians are getting poorer, according to a new report by the World Bank.
The report blames reduced aid from the international community, suspension of revenue payments that Israel collects on behalf of the Palestinian Authority, and ongoing restrictions by the government of Israel.
“The key point is that the current situation is not sustainable,” Steen Lau Jorgensen, World Bank Country Director for the West Bank and Gaza told The Media Line. “This is a recipe for a crisis about to happen, and even though there is no political horizon for a peace deal, a lot can be done.”
In the Gaza Strip, there has been almost no reconstruction of the thousands of homes destroyed and damaged during last summer’s fighting with Israel. Donors in Cairo promised $3.5 billion to help rebuild Gaza, but just over one-third of that has come through. In addition, less than seven percent of total needed of building materials needed for reconstruction has entered Gaza, and unemployment in Gaza is high, and among youth, it is over 60 percent.
It is time, Jorgensen said, to stop focusing on trying to revive the peace process between Israel and the Palestinians, which has been moribund for years, and to start focusing on areas of economic cooperation.
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“For example, we could tie together the electricity grids of Israel, Jordan and the West Bank, which could promote a more efficient use of electricity,” he said.
In an unusual move, he also had good things to say about the Coordinator of Government Activities in the Territories Unit (COGAT) which is responsible for implementing Israeli policies about freedom of movement and exports from the West Bank and Gaza.
“COGAT is clearly saying that Palestinian economic development is good for Israel and that is refreshing to hear,” Jorgensen said. “We are getting too paralyzed by the lack of a peace process. We should say that’s a given for now and we should see what we can do on a technical level.”
COGAT says they are doing everything they can to overcome the humanitarian challenges in the West Bank and Gaza Strip.
“According to COGAT’s statistics; over 2,000,702 tons of goods such as medical supply, stationaries, electrical devices, fuels and more have entered Gaza from Israel since the beginning of 2015,” a spokesman for COGAT told The Media Line. “In terms of marketing from Gaza, over 9,008 tons of goods such as agricultural produce, fish, textile and furniture have been marketed to Israel, Judea and Samaria (West Bank) and abroad since October 2014.”
He also said that unemployment has actually decreased in the West Bank by four percent, a statistic that Jorgensen agreed with, although he said that unemployment remains a serious problem. He said that last summer’s war led to a 15 percent drop in GDP in Gaza, only half of which has been recovered.
He also said there remains a shortage of energy, especially in Gaza. He urged Israel to help the Palestinians develop a natural gas field off the coast of Gaza. That could provide fuel for Gaza’s power plant, which has struggled to provide enough electricity for Gaza’s 1.8 residents, who only receive electricity a few hours a day.
He said that Israel could allow Gaza to use its existing pipeline to help Palestinians export their natural gas to the rest of the world.
Another looming crisis is the decrease in the amount of potable water in the densely populated Strip. Unless something is done, Gaza will run out of drinking water by 2020.
“We need to be realistic about what can be done,” he said. “While a peace deal would be a gain for both Israel and the Palestinians it would be a mistake to sit back and wait. Let’s start with joint economic committees and see what we can get done.”