The Gaza Strip’s economy is in “free fall” as cuts to aid and salaries add to an already crippling Israeli blockade on the Hamas-run enclave, the World Bank said on Tuesday.
The bank’s report is to be presented to the international donor group for Palestinians, known as the Ad Hoc Liaison Committee, tomorrow at its meeting on the sidelines of the UN General Assembly in New York City.
The meeting is to coincide with the speeches to the assembly of Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu.
Photo: AFP
Already squeezed by a more than decade-long Israeli blockade, Gaza’s economy has been further weakened by US aid cuts and financial measures by Abbas’ Palestinian Authority.
Abbas has been seeking to pressure Islamic movement Hamas, which expelled his loyalists from the territory in 2007, as well as save costs.
He has reduced monthly payments to Gaza by about US$30 million, according to the World Bank.
US President Donald Trump’s administration has cut more than US$500 million in aid to the Palestinians, including ending all support for the UN Relief and Works Agency for Palestine Refugees.
“The economic deterioration in both Gaza and West Bank can no longer be counteracted by foreign aid, which has been in steady decline, nor by the private sector, which remains confined by restrictions on movement, access to primary materials and trade,” the bank said.
Gaza’s economy shrunk by 6 percent in the first quarter of this year “with indications of further deterioration since then,” it said.
One in two Gazans now lives below the poverty line and unemployment is 53 percent, the bank said, adding that more than 70 percent of young people are jobless.
“Increased frustration is feeding into the increased tensions which have already started spilling over into unrest and setting back the human development of the region’s large youth population,” World Bank director for the West Bank and Gaza Marina Wes said.
On Thursday last week, UN envoy for the Middle East peace process Nickolay Mladenov told the UN Security Council that “Gaza can explode any minute.”
Israel and Palestinian militants in Gaza have fought three wars since 2008.
In recent months, mass protests along Gaza’s border with Israel have triggered repeated deadly clashes with the army, prompting warnings of the risk of a new conflict.
At least 187 Palestinians have been killed by Israeli fire since the protests began on March 30. One Israeli soldier has been killed in that time.
Israel says its actions are necessary to defend the border and accuses Hamas of using the protests as cover to attempt infiltrations and attacks.
Palestinians and human rights groups say protesters have been shot while posing no real threat.
Mladenov and Egyptian officials have been seeking to broker a long-term truce between Israel and Hamas, but those efforts have stalled in recent weeks.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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