Economy of Israeli-blockaded Gaza in free fall, needs urgent response: World Bank

The World Bank has raised alarm at the deteriorating economic situation in the Gaza Strip amid a crippling Israeli blockade, calling for immediate global action to prevent the “economic collapse” of the Palestinian coastal enclave.

In a report released on Monday, the Washington-based international financial institution highlighted the critical challenges facing Gaza’s economy, among them a negative growth rate and an unemployment rate of over 70 percent for the youth.

“The economy in Gaza is collapsing, suffering from a decade long blockade and a recent drying up of liquidity, with aid flows no longer enough to stimulate growth,” the report said.

It also enumerated several factors which have contributed to the deterioration of the Gaza economy, especially the Israeli siege on the coastal sliver and the US decision to stop funding for the United Nations Relief and Works Agency (UNRWA).

The administration of President Donald Trump has decided to cancel all US financial aid to the United Nations aid program for Palestinian refugees.

PressTV-US to end funding to UN program for Palestinian refugees

The administration of US President Donald Trump has decided to cancel all US funding of the United Nations aid program for Palestinian refugees.

“Gaza’s economy is in free fall, marking minus 6 percent growth in the first quarter of 2018 with indications of further deterioration since then,” the report said.

“While the decade long blockade is the core issue, a combination of factors has more recently impacted the situation in Gaza; including the decision of the Palestinian Authority to reduce the monthly payments by 30 million to the area, the winding down of the $50-60 million per year of the US Government aid program, and the cuts to the UNRWA program,” it added.

It also warned that the economic deterioration in both Gaza and West Bank could no longer be counteracted by foreign aid, underlining the need for a balanced approach to the situation in Gaza that combines an immediate crisis response.

The World Bank further urged Israel to support an environment conducive to economic growth in Gaza by lifting restrictions on trade and allowing the movement of goods and people.

The Gaza Strip has been under a crippling Israeli siege since 2007 and witnessed three wars since 2008. The Tel Aviv regime carries out regular attacks on Gaza under the pretext of hitting positions belonging to the Hamas resistance movement, which governs the territory.

The coastal sliver has also witnessed a fresh wave of deadly tensions since March 30, which marked the start of a series of protests demanding the right to return for the Palestinians driven out of their homeland.

Marina Wes, World Bank Country Director for West Bank and Gaza, said that the declining economic and social situation in Gaza has reached a critical point. 

“Increased frustration is feeding into the increased tensions which have already started spilling over into unrest and setting back the human development of the region’s large youth population,” she added.

Some 180 Palestinians have been killed and over 20,000 others wounded in renewed Gaza clashes, according to the latest figures released by the Gaza Health Ministry.

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