Tuesday, November 30, 2010

The Peace Dividend: Economic Growth in the West Bank and Gaza

The Portland Trust believes in the important role of economics in resolving the Middle East conflict, supported by evidence from other conflict situations. They believe the development of a thriving and sustainable Palestinian economy is a necessary condition for peace, and that the Israeli and Palestinian private sectors can be powerful forces for peace in the region. The Trust's Economic Bulletin for November 2010 highlights some of the material gains that have been registered in Gaza and the West Bank

Chief among the bulletin's findings are an increase in foreign investment between 2008 and 2009, from $1.34bn to $1.58bn, an 18% rise. However, Palestinian investment abroad is still three times more than the amount invested in the territories themselves: $5.43 bn. According to Dr. Jihad Al Wazir, governor of the Palestinian Monetary Authority political instability in the territories is the main cause of preferred overseas investment. The percentage of Palestinian banks that kept their assets abroad has dropped markedly a historic high of 65% to 47% today. Fascinating that overseas investment has historically taken precedent over building local infrastructure. Can we find a way to blame this on Israel?

Meanwhile, back in Hamasastan
Hamas has approved the construction of three high rise apartment buildings in Gaza that will be funded primarily by Iran. The funding for the new buildings comes mainly from Iran, but donations have also been received from Kuwait, the United Arab Emirates and Palestinian Authority President Mahmoud Abbas. Each building will be located on a complex that will have an adjoining shopping center, schools, a playground and a mosque. Apartments in the new neighborhoods will cost $25-40,000. First in line for the new units will be will be the families of 'shahidim' (martyrs), prisoners and casualties of war. Next in line will be young couples who have no apartment of their own, followed by families whose homes were destroyed by Israel, especially during Operation Cast Lead. The remaining apartments will be handed out according to a housing ministry raffle.
In addition to the apartments, international organizations operating in Gaza are supervising 70 projects to improve the health, education and sanitary conditions in the Gaza Strip. Yet on the streets in the Bay area, we still hear about starving Palestinians living in tents. Reality and fantasy are on a parallel track here- never actually intersecting.

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