World Bank: Palestinian economy damaged by Israel

by Richard Kilner

Story link: World Bank: Palestinian economy damaged by Israel

Yesterday the World Bank forecast that the economy of Palestine would perform poorly this year.

The prediction comes despite billions of dollars of overseas aid, and the World Bank singles out Israel’s policy of limiting Palestinian trade as the central reason for the slow growth forecast.

In Gaza, following the violent Hamas takeover, Israel has put into effect a strict blockade which caused the Gazan economy to contract last year.

The West Bank, although not subject to such a blockade, is affected negatively by the numerous Israeli roadblocks.

Earlier the World Bank had stated that with a concerted effort on the parts of Palestine, Israel and international donors growth could top 10%.

In the present conditions, modest growth of 3% is expected in 2008.

It had been hoped that fostering private sector development and improving economic conditions could bolster the prospects of the peace process.

However, Mark Regev of the Israeli government has stated that removing the security measures in place too swiftly could enable further terrorist attacks, which would damage the peace process.