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Gaza Economy on Verge of Collapse

Gaza Economy on Verge of Collapse Gaza Economy on Verge of Collapse

Gaza’s economy is on the “verge of collapse,” a new World Bank report warned Friday, saying the unemployment rate there is now the highest in the world and calling on Israel and international donors to remedy the situation.

It charged that “blockades, war and poor governance have strangled” the economy of Gaza, ruled by Hamas, CBS reported.

The report said Gaza’s GDP would have been four times higher if not for conflicts and restrictions, including a blockade in place since 2007.

Israel and Egypt imposed the blockade on Gaza after Hamas took over the territory from forces loyal to the western-backed President of the Palestinian Authority, Mahmoud Abbas. Israel says the blockade is necessary to prevent Hamas from getting weapons and building militant infrastructure, while critics say it amounts to collective punishment.

Since its takeover, Hamas has fought three wars imposed by Israel, including 50 days of fighting last summer in which thousands of Gaza buildings were either destroyed or damaged. Over 2,200 Palestinians, including hundreds of civilians, were killed during the war. On the Israeli side, 67 soldiers and six civilians were killed.

The report said Gaza’s economy was badly hurt as a result of the fighting, especially the agriculture, construction, manufacturing and electricity sectors.

  Unemployment

It said about 43 percent of Gaza’s 1.8 million residents are unemployed; a figure it said is the highest in the world. Youth unemployment reached about 60 percent by the end of last year, it said.

“The current market in Gaza is not able to offer jobs leaving a large population in despair particularly the youth,” Steen Lau Jorgensen, World Bank country director for the West Bank and Gaza, said in the report. “The ongoing blockade and the 2014 war have taken a toll on Gaza’s economy and people’s livelihoods.”

The report warned that the “status quo in Gaza is unsustainable.” It said the coastal territory’s recovery depends on an easing of the blockade and on donor countries honoring their pledges made at an international conference in Cairo after last year’s war.

  Reconstruction Slow

The reconstruction of the Gaza Strip is going “far more slowly than expected” after a devastating war between Israel and the Hamas militant group last year, the International Monetary Fund said this week.

IMF said in a report that just over a quarter of the $3.5 billion pledged for reconstruction has been disbursed. The pledges were made at an international conference in Cairo after the end of the 50-day war last summer between Israel and Gaza’s Hamas rulers.

Some 18,000 homes were destroyed and thousands more were damaged in the war.

Frode Mauring, the UN Development Program’s special representative, toured damaged areas last week and said the reconstruction of thousands of houses that were totally destroyed could take “a number of years.”

He said incoming money goes only where donors want it to go. “The pledges made in Cairo for Gaza need to be honored; otherwise it will not be possible to complete the rehabilitation and reconstruction in Gaza,” Mauring said. “I think the biggest constraint we have now is the funding.”

Financialtribune.com