Abbas: Israel to blame for dire state of Palestinian economy

PA president says Israel "exploits" Palestinian resources.

October 12, 2013 16:53
1 minute read.
Palestinian Authority President Mahmoud Abbas at a PLO meeting in Ramallah, October 2, 2013.

Abbas looking unhappy 370. (photo credit: REUTERS/Mohamad Torokman)


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Palestinian Authority President Mahmoud Abbas has blamed the "Israeli occupation" for the dire economic situation in the West Bank, Palestinian news agency Ma'an reported.

"The economic situation is really difficult, and the main reason is the Israeli occupation," Abbas told official PA television.

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"Israel exploits our resources and lands which increased our economic deficit," he continued.

The PA president also expressed concern that the Palestinian Authority would be unable to pay salaries for its employees in November as a result of the difficult economic situation.

On Tuesday, the World Bank issued a report that said that the Palestinian Gross Domestic Product in the West Bank could increase by at least 35 percent, $3.4 billion annually, if Israel lifted its restrictions on Palestinian access and movement in Area C.

“Access to Area C will go a long way to solving Palestinian economic problems,” said Mariam Sherman, the outgoing World Bank Country Director for the Palestinian territories.

“The alternative is bleak. Without the ability to utilize the potential of Area C, the economic space will remain fragmented and stunted. Lifting multiple restrictions could transform the economy and substantially improve prospects for sustained growth,” she said.

The World Bank report did not offer any alternative to the restrictions, put in place by Israel due to security concerns.

The situation is even worse in the Gaza Strip, where Hamas also faces a financial crisis after income from taxes has been badly hit since neighboring Egypt started destroying a network of tunnels used to smuggle food, fuel and weapons into the Islamist-run enclave.

Thousands of civil servants in Gaza may not receive their full salaries in time for the Eid al-Adha holiday.

Egypt, which accuses Hamas of aiding Muslim militants in the lawless Sinai desert, has been waging a campaign to destroy the smuggling tunnels that delivered weapons and other goods to the Gaza Strip, which is partially blockaded by Israel.

Hamas, which denies the Egyptian allegations, taxes the traffic through the tunnels - a money stream that has now virtually run dry.

Cairo's closure of the tunnels over the last three months has also caused prices to spike and production to drop at factories dependent on raw materials from Egypt.

Tovah Lazaroff and Reuters contributed to this report.

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