World Bank: Trade with outside world needed to improve economy.
Warning of an imminent humanitarian catastrophe in Gaza, the United Nations and the Palestinian Authority launched a $539 million humanitarian appeal to the international community on Wednesday.
“Without donor-funded emergency fuel distributed to critical water, sanitation and health facilities, we would face a total systems collapse, with the result, a humanitarian disaster,” UN Humanitarian Coordinator Jamie McGoldrick said at a press conference in Beit Lahiya in the northern Gaza strip.
“There is no place more fitting to launch the humanitarian plan than Gaza, where we see a man-made tragedy unfolding daily. Today, Gaza is on the brink of catastrophe and humanitarian needs run deep,” McGoldrick said.
The money would be used to help 1.9 million Palestinians in dire straits, 75% of whom live in Gaza and the remainder in the West Bank and east Jerusalem, according to the UN.
Half of the money would go to the UN Relief and Works Organization. But Wednesday’s launch of its 2018 appeal is separate from Thursday’s UNRWA donor conference in Rome.
The issue of Gaza will also be high on the agenda of next Monday’s meeting in Brussels of the 15-member Ad Hoc Liaison Committee, which coordinates donor assistance to the Palestinians.
A World Bank report set to be released on Thursday in advance of the Liaison Committee meeting warns of a fragile Palestinian economy, including in the West Bank.
“The PA’s total deficit amounted to USD1.14 billion in 2017 (7.7% of GDP). Aid received amounted to USD719 million (USD544 in budget support and USD175 million for development financing), resulting in a financing gap of around USD420 million,” the World Bank said.
“Notably, aid received was 11% lower than in 2016, mainly due to a decline in budget support, while development financing increased in 2017,” it added. The financing gap for the 2018 PA budget is expected to be $500 million.
Marina Wes, World Bank country director for the West Bank and Gaza, said donor funding can only be a stop-gap measure, and will not solve the problem in the long run.
The Palestinian economy can only grow through an investment in jobs and increased trade, the World Bank said.
“Serious commitments by all parties are needed to spur growth and jobs by putting in place the right conditions for a dynamic private sector. Without addressing the constraints, Gaza will continue to suffer with a heavy toll on its population,” Wes said.
Gaza growth has dropped from 8% in 2016 to 0.5% in 2017, with almost half of the labor force unemployed, Wes said.
Steps the PA is taking to close its funding gap will harm its economy in the long run, the World Bank said.
Both she and the UN blamed the crisis in part on Israeli restrictions at its two border crossings with the Gaza Strip and the failure of Hamas and Fatah to reunify.
The UN also spoke of the three Gaza wars, Egypt’s closer of its border crossing to Gaza at Rafah, and the PA’s restrictive measures against the Hamas-controlled Strip.