Palestinian Struggle Economically as Tunnels Collapse and Aid Falters

Israel Imposes Strict Limitations on Imports

Gazan Poverty: A girl poses in the poverty-stricken neighborhood of Beit Lahia in northern Gaza.
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Gazan Poverty: A girl poses in the poverty-stricken neighborhood of Beit Lahia in northern Gaza.

By Reuters

Published October 27, 2013.
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“They are part and parcel of the existing situation, where there remains a permanent terror threat,” he said, adding that direct peace talks, which resumed in July after a three year hiatus, were meant to establish a definitive solution.

With Israel controlling more than 60 percent of West Bank territory, including the most fertile land, the Western-backed Palestinian Authority has grown dependent on foreign aid. This totalled $932 million in 2012, according to PA data, just under a third of all revenues and down from some $1.8 billion in 2008.

Deputy Prime Minister for economic affairs and head of the Palestine Investment Fund, Mohammed Mustafa, said that foreign donors were growing wary of subsidizing their economy without seeing “a political horizon” to end the conflict.

“They’re getting a bit frustrated with the political process … they’re saying, look, we’re not providing support for continuing occupation, but rather to support establishing a Palestinian state,” he told Reuters in an interview.

Speaking in his sleek office, a wood and glass villa in the concrete jumble of Ramallah’s once robust but now crumbling building boom, Western-educated Mustafa sees the peace talks as a make-or-break moment for the economy.

Behind him sit posters of a rosy, purported future: computer-generated graphics of a leafy Palestinian megacity.

Propped next to them, stand maps showing the bleak reality, crosshatched with no-go zones for Palestinians and purple blotches marking widespread Jewish settlements.

Mustafa imagines an “exit strategy” from aid through the $4 billion investment and development plan, or “Economic Initiative for Palestine”, introduced by U.S. Secretary of State John Kerry this year and drafted by the Mideast Quartet of the U.S., Russia, European Union and United Nations.

The quartet’s interim report, which runs into hundreds of pages, provides details for investment and reform prospects in eight sectors from tourism to agriculture.

The research probed into the minutest information, for example whether certain tracts of land should be devoted to vegetables or fruit, and with sprinkler or drip irrigation.

“The initiative deals in facts, not dreams, and it takes into mind the status quo … it’s about making the economy sustainable, not pouring money into a safe,” an adviser in the office of the Quartet representative in Jerusalem told Reuters.

While growth in recent years owed much to the easing of Israeli rules on movement, the quantum leap envisioned by the quartet plan is likely an all-or-nothing chance that depends on a successful conclusion to peace talks next spring - “high-stakes, but also high gains,” said the quartet adviser.

DREAMS

In a rolling West Bank landscape encrusted with olive trees, millionaire Palestinian businessman Bashar al-Masri is making a rare investment and growth success story come to life.

Whole neighbourhoods of affordable housing for some 25,000 people, mosques, schools and parks are taking shape as part of the first-ever planned Palestinian city, a $300-million project with Qatari investment. But the dream is not yet reality.

Israel has not given final approval for the road to the new town, dubbed Rawabi or “The Hills”. Al-Masri also complains that access to water is not yet secure, saying that the supply allotted by Israel to the nearby Jewish settlement of Ateret alone would be more than enough for both towns.

“We’ve faced many problems from the (Israeli) occupation, and we still do. This is the nature of a military occupation, it’s what we expected,” al-Masri told Reuters.

While Ramallah’s economic and policy elites speak optimistically of a breakthrough, high prices and shrinking livelihoods weigh on many working-class Palestinians, for whom this month’s Eid al-Adha holiday was lean.

“This is the first Eid where there was not much activity,” said Ramallah resident Rami Bishara, ambling around the mostly empty jewellery and clothing stores in the city centre market.

“I remember two years ago, there was a stream of people,” he added wistfully.


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