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World Bank Warns of Imminent Collapse in Gaza

World Bank Warns of Imminent Collapse in Gaza

Friday, 16 March, 2018 - 12:00
A girl sits on the ruins of her family home in the Beit Hanoun neighborhood of Gaza City (Siegfried Modola/Reuters)

A new report issued by the World Bank warned of an imminent collapse in the Gaza Strip as the economic and social situation continued to deteriorate steadily over the past 20 years.

The report, which will be presented to the Special Liaison Committee on March 20 in Brussels during a policy meeting on development assistance for the Palestinian people, said that a sustained recovery in Gaza required a coordinated strategy for the rescue of the economic sector through trade with external markets and expansion of business activities.

The report explores the nature of the rapid deterioration of the economic and social conditions in Gaza, and defines the measures that have to be urgently taken.

“The (Gaza) economy cannot survive without being connected to the outside world,” the report said, adding: “Any effort at economic recovery and development must address the impacts of the current closure regime.”

The report focuses on recent economic data that highlighted a decline in Gaza’s growth rate from 8 percent in 2016 to 0.5 percent in 2017, with the unemployment rate nearly covering half of the workforce.

The report also addressed basic services that are rapidly deteriorating, such as electricity, water and sewage, posing serious health threats.

World Bank’s Regional Director Marina Wes highlighted that aid alone would not help Gaza in the long term, with trade restrictions on the Strip urgently needing to be lifted to create jobs and increase consumer spending.

The report stressed the need for donors to send urgent aid in the short term, to address the current liquidity shortage and to improve the dire humanitarian situation. Additional aid will help prevent the worsening financial situation.

But the report warned that aid would not be sufficient to provide the impetus for long-term growth and would stop undermining Gaza’s development.

The World Bank highlighted conditions for the sustainability of Gaza’s economic recovery, including a competitive private sector in regional and global markets, increased commodity and service exports, easing restrictions on dual-use goods, streamlining trade procedures at Gaza's commercial crossing and rebuilding commercial ties with the West Bank and Israel.

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