Adam Entous, 12 July 2007 - Reuters
The World Bank said on Thursday the prolonged closure of Israel's border crossings with Hamas-controlled Gaza could lead to the coastal strip's "irreversible" economic collapse.
The international lending agency delivered that stark assessment during a closed-door meeting of aid groups and private sector organisations.
Israel has largely closed the Karni commercial crossing, Gaza's economic lifeline, in an effort to isolate Hamas after it seized control of the Gaza Strip a month ago.
Israel has allowed humanitarian aid into the territory through smaller crossings.
While aid groups said this should be sufficient to head off a food shortage in the territory of 1.5 million people, they warned Gaza's economy would be devastated.
Almost all Gaza businesses depend on imported raw materials and other supplies that must pass through the strip's shuttered crossings with Israel.
"The pillars of Gaza's economy have weakened over the years. Now, with a sustained closure on this current scale, they would be at risk of virtually irreversible collapse," Faris Hadad-Zervos, the World Bank's acting country director for the West Bank and Gaza, told the aid groups.
A copy of the World Bank's presentation was obtained by Reuters from a participant in the meeting.
"A solution must be reached very soon, if not immediately... Otherwise, Gaza's dependence on humanitarian assistance could become a long-term and comprehensive situation. These impacts will be difficult to reverse," Hadad-Zervos said.
According to statistics compiled by the Palestine Trade Center and the Palestinian Federation of Industries, more than 3,190 Gaza businesses have temporarily shut down in the last month. Some 65,800 workers have also been temporarily laid off.
Up to 54 percent of employment in Gaza is generated by the private sector, representing more than 100,000 jobs.
Hadad-Zervos said a loss of a third of those jobs would translate into unemployment levels of over 37 percent, up from 30 percent at the beginning of the year. He said unemployment could reach the unprecedented level of 44 percent.
Israel wants to isolate Hamas in the Gaza Strip, while allowing funds and goods to flow to President Mahmoud Abbas's emergency administration in the West Bank.
Israel controls the land crossings between Gaza and Israel, as well as Gaza's air space and territorial waters. Israel does not allow the crossing of people or goods by sea or air.
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Basic needs reaching Gaza but economy near collapse
Report, The Electronic Intifada, 13 July 2007
12 July 2007 (IRIN) - While humanitarian aid flows into the Gaza Strip are meeting most of the basic needs of the Palestinians, industries are unable to export their goods. This has lead to mass layoffs and unemployment in the already impoverished enclave.
Businessmen in Gaza speak of over 30,000 layoffs as a result of the lockdown on the Gaza Strip initiated after fighting between the Islamist group Hamas and Fatah last month, which ended when the former seized control over the strip.
About 80 percent of private sector businesses have closed, and the remaining establishments are operating at around 60 percent capacity, Paltrade, a local business group, reported. Also, Israel has cancelled the Gaza customs code, making importing goods more difficult.
"The economy in Gaza is grinding to a halt," said an aid worker.
World Bank statistics indicate over 80 percent of Gazans live below a poverty line of US$2.41 a day.
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