Observations on the Palestinian economy

Until the onset of the second Intifada in 2000, the World Bank considered the Palestinian economy as one of the fastest growing economies on record. Years of suicide bombers, Israel restricting labourers entering the country, incursions into Gaza and more had left the Palestinian territories broke.

In the past year or so, it has been accepted that violence is down. Israel has removed dozens of roadblocks. Palestinians are seen back in the Israeli workforce. Have these changes combined to give an economic boost?

There is plenty of anecdotal evidence to report strong shifts on the ground. For example, independent journalist Tom Gross wrote in the Wall Street Journal that:

As I sat in the plush office of Ahmad Aweidah, the suave British-educated banker who heads the Palestinian Securities Exchange, he told me that the Nablus stock market was the second best-performing in the world so far in 2009, after Shanghai. (Aweidah’s office looks directly across from the palatial residence of Palestinian billionaire Munib al-Masri, the wealthiest man in the West Bank.)

Later I met Bashir al-Shakah, director of Nablus’s gleaming new cinema, where four of the latest Hollywood hits were playing that day. Most movies were sold out, he noted, proudly adding that the venue had already hosted a film festival since it opened in June.

On his own blog, Gross posted pictures, originally shown in the newspaper “Palestine Today”. They show Gaza during the recent Eid festivities. Shops full of goods, a galaxy away from the photos shown by most of the world media.

This information comes as a welcome relief to the stated economic aims of Khaled Mashaal, head of the Hamas political bureau in Damascus. He was quoted on the Filisteen al-’An website as saying: “most of Hamas’ funds and efforts are invested in the resistance and military preparations”

The Wall Street Journal assesses that the Palestinian economy will grow by 5% in 2009, despite the global credit crunch and having to absorb returnees from Dubai. 

Any impact of lower remittances would most likely be softened if those workers find work in the West Bank. With a building boom under way in Ramallah and other Palestinian cities, fueled partly by international aid money totaling $1.7 billion in 2008, many returning from Dubai are finding jobs.

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One Comment on “Observations on the Palestinian economy”

  1. Michael Horesh Says:

    On another positiv note: Cooperative Israeli-Palestinian Project Plants Strawberry Fields

    Qalqilyah is an unlikely site for Israeli-Palestinian cooperation — a Palestinian town in the West Bank; it is home to the seperation barrier built to keep out Palestinian attacks. But it is now also home to strawberry fields planted by Israelis and Palestinians working together, World Focus’ as Arieh O’Sullivan reported in the Jerusalem Post.

    Backed by international donors and the Peres Center for Peace, the purpose of the strawberry fields is to boost the Palestinian economy, with Israeli farming experts providing irrigation equipment and training, O’Sullivan said.

    “We hope that the strawberry crop can be identified as a peace product that was grown by cross-border activity,” said Oren Blonder, a project manager at the Peres Center for Peace.

    The plan is to market the strawberries in Europe for Christmas and to sell them to Ben & Jerry’s.

    “Our hope here is that if this situation will continue, that Qalqilyah will stop being the capital of terrorism and bombing it was before and will become a capital of strawberries,” Lt. Gal Levant, an Israeli liaison officer, said.

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