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.
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.
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