West Bank economic improvement disputed

The Palestinian economy showed some improvement in the first half of 2008, according to the Israeli Civil Administration in the West Bank, though economists and Palestinian observers questioned its claims.

[Read this report in Arabic]

The statistics showed a slight decrease in unemployment and a rise in the number of travel permits issued to Palestinians.

The Israeli military said it had opened up several "major crossing points" in the West Bank, which was "an important factor contributing to the improvement in the regional economy".

The military added that it had removed approximately 100 checkpoints from January, though the UN has questioned this number, saying that some important roadblocks have been moved but the overall number remains more or less constant.

Israel says it needs the checkpoints for security reasons; many were put in place following the outbreak of violence in 2000. Since then, the Palestinian economy has been hard hit, according to the World Bank.

The movement of Palestinian goods has increased by thousands of trucks per month, the report indicated, including a 25 percent rise in the amount of fresh goods exported to Israel.

This, the report said, was a "direct result of the increase in employment licences and trade permits issued to Palestinian merchants and business owners".

Small gains

The Palestinian Minister of the Economy in the Ramallah-based caretaker government, Mohammed Hassouneh, told IRIN he hoped for significant improvements but that so far any gains had been small.

"We would hope for a better economy [but] we need totally free movement," he said, adding that the number of permits issued to some businesses was "not enough".

He said the number of permits issued fluctuated, adding instability to the economy.

We would hope for a better economy [but] we need totally free movement.

Another blow was the 18-month boycott of the Palestinian Authority, until June 2007, while Hamas was part of the government. The West Bank saw some improvement after the lifting of the sanctions.

UN and World Bank documents state that restrictions on movement are a primary factor affecting poverty, food security and chances for an economic recovery in the oPt.

Palestinians and economists question if the economy has really improved and if it is valid to treat the economies of Gaza and the West Bank separately.

"There are significant Palestinian Authority expenditures in Gaza, especially salaries," said a senior economist on condition of anonymity as he was not authorised to speak to media.

He added that the facts available so far this year indicated overall economic stagnation and rising inflation, which is hitting Palestinians hard as they spend large amounts of their income on basic foods that are rising in price.

shg/at/mw