The Mission of the State of Palestine would like to share the latest UNCTAD report on the Palestinian economy.  The report is on the effects of the occupation on the Palestinian economy and states:

“Before the onset of the COVID-19 pandemic, the performance of the Palestinian economy was weak and the overall environment was unfavourable. The productive base had been hollowed out by recurrent hostilities, geographical and economic fragmentation, technological regression, restrictions on imported inputs and technology, the loss of land and natural resources, settlement expansion, the leakage of fiscal resources and the near-collapse of the economy of the Gaza Strip”.

Covid has compounded the problems already in existence which have been created by the conditions of the Israeli occupation.

This report details:

• Even before the pandemic, forecasts for the Palestinian economy in 2020 and 2021 were already bleak, with GDP per capita projected to decrease by 3% to 4.5%
• High poverty and unemployment rates had persisted and GDP per capita declined for the third consecutive year as the Palestinian economy continued to slide in 2019 and the first half of 20
• In 2019, real GDP grew by less than one percentage point, not better than the two preceding years. The West Bank registered its lowest growth rate since 2012 (1.15%), while Gaza’s growth was virtually zero as it failed to rebound from the two consecutive GDP contractions of -7.7% and -3.5% in 2017 and 2018 respectively.

An economy under siege:

• Restrictions and leakage of fiscal resources continue to undermine the Palestinian economy. UNCTAD previously estimated the annual leakage of Palestinian fiscal resources to the Israeli treasury at 3.7% of GDP or 17.8% of total tax revenues.
• In addition, in March of this year a new annual deduction of $144 million from Palestinian clearance revenues has been put in place
• The impact of the fiscal loss to occupation has been compounded by the substantial decline in donor support to the Palestinians. Donor budget support fell from a high 32% of GDP in 2008 to 3.5% in 2019.
• In 2019 and early 2020, the occupying power accelerated the construction of settlements even though they are illegal under international law.  To make room for settlement expansion, the Israeli zoning and planning regime makes it nearly impossible for Palestinians to obtain permits to build in their own land for any purpose.
• By 2019, more than 1 million of Palestinians’ productive trees had been destroyed by occupation since 2000
• The agricultural sector has diminished with the continuous loss of land and water. Its share in GDP declined from 35% in 1972 to 4% in recent years.

Coronavirus:

• Barely a month after the outbreak, revenues collected by the PNA from trade, tourism and transfers declined to their lowest levels in 20 years.
• The fiscal impact is heightened by the additional expenditure on health, social welfare and support for the private sector necessitated by the pandemic.

UNCTAD Secretary-General Mukhisa Kituyi:
“The international community should urgently redouble support to the Palestinian people to enable them to cope with the economic fallout from the pandemic. There is no alternative to donor support for ensuring the survival of the Palestinian economy,”