West Bank economy is not flourishing, UN agency says

UNRWA report says unemployment in second half of 2010 grew much faster than employment, average purchasing power continued to decline.

Bethlehem 311 (photo credit: Bloomberg)
Bethlehem 311
(photo credit: Bloomberg)
JERUSALEM - Research by the UN agency for Palestinian refugees challenges the picture of a flourishing West Bank economy freed up by a relaxation of Israel's "military occupation," the agency said on Wednesday.
The report by the agency UNRWA shows that unemployment in the second half of 2010 grew much faster than employment, and average purchasing power continued to decline.
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Of six major private sector activities, only two recorded employment gains during the second half of last year.
Overall, one in four Palestinians in the workforce was unemployed.
"While there was modest employment growth, such growth was on the wane in 2010 while the number of unemployed accelerated in the second half of the year," said author Salem Ajluni.
The report's findings challenge assertions that the Palestinian economy is growing, helped by the removal of Israeli roadblocks and other movement restrictions. Prime Minister Binyamin Netanyahu said in a speech to the US Congress last month that the Palestinian economy was booming.
Palestinian policymakers have projected growth of 7 percent in 2011 for both the West Bank and Gaza, though they point out that high growth rates in recent years have largely been dependent on international aid for the Palestinians.
The UNRWA report said: "The average broad refugee unemployment rate rose by more than a percentage point to 27.9 percent relative to first-half 2009 as compared to 24.1 per cent rate for non-refugees."
Both employed refugees and non-refugees lost an average of about 3 percent in real value of their wages.
"The implications of these results are profound for the refugees served by UNRWA," said UNRWA spokesman Chris Gunness.
"The occupation and its related infrastructure such as settlements and settler-only roads that encroach on and divide Palestinian land, settler violence and the West Bank barrier have diminished prospects for Palestinians in general and especially for refugees," the report said.