Palestinian economy in decline

And the BBC puts the blame squarely on Israel despite the fact that the very report they cite finds the exact opposite. Side note, the link to the report on the BBC's webpage does not work, wonder why? I've provided another one.

The BBC reports "Unemployment stood at 25%, compared with 10% before the uprising against Israeli occupation four years ago."

There is a picture of some Palestinian children with this caption "Nearly half of Palestinians live below the poverty line"

While Arafat's kid will live like a queen for the rest of her life.

Suha to receive $ 22m. a year from PA

$22 million a year would help a lot of Palestinian children.

Meanwhile, the US gives direct aid to the Palestinians.

Charging the Palestinian Authority led by Yasser Arafat was corrupt, the Bush administration this year used the United Nations and other private aid groups to direct $127 million in U.S. assistance to the Palestinians.

Last year the Bush administration gave $20 million directly to the Palestinian Authority under former Prime Minister Mahmoud Abbas, which was "fully accounted for and used in the way it was intended."

So what is the cause of all this bad economic news?

According to the report, Intifada, Closures and Palestinian Economic Crisis: An Assessment, there is a close link between the number of border closures and Palestinian economic problems.

[Actually the report says the opposite, "While any short-term recovery will depend on the lifting of closures, this will not suffice to put the Palestinian economy onto a sustainable growth path." ed.]

Border closures restrict the movement of people and goods, slowing down trade.

Closures hit trade

"Closures are a key factor behind today's economic crisis in the West Bank," said Nigel Roberts, World Bank country director for the West Bank and Gaza.

The BBC fails to point out that there is also a "close link between the number of border closures" and the significant drop in suicide bombings. Further "Border closures restrict the movement of people and" suicide bombers. Likewise, "Closures are a key factor behind today's" dramatic drop in suicide bombings.

The BBC also fails to mention that this same report by The World Bank reports:

While any short-term recovery will depend on the lifting of closures, this will not suffice to put the Palestinian economy onto a sustainable growth path. The Paris Protocol, which formalized the de facto customs union with Israel that has existed since 1967, has proven extremely costly -- and not only because of the closures that interfered with its implementation. In a structural sense, the long-term growth potential of the Palestinian economy has been stunted by the upward pressure on domestic Palestinian wages created by wages paid to Palestinian workers in Israel. Domestic wage increases have exceeded any underlying growth in productivity, and have undermined Palestinians’ ability to export competitively-priced goods to the rest of the world. Bank analysis shows that a proactive policy of export development, in which a more open and less discriminatory trade regime is adopted, would result in higher incomes by 2010 than a return to previous levels of employment in Israel.

Interesting how the BBC focused on the "closure" aspect of the report while the World Bank concluded that lifting closures "will not suffice to put the Palestinian economy onto a sustainable growth path".

Feel free to use the BBC complaint form on the left under the blog roll.
----------------------------------------------------------------------------