GAZA CITY: Recent cuts in US aid and money transfers by the Palestinian Authority (PA) government have pushed the Gaza Strip’s economy into “free fall,” a World Bank report warned on Tuesday. Israel imposed a blockade of the territory in 2007, after the Hamas seized control. Since then Israel has fought three wars with Hamas, compounding the blockade’s crippling effect on the economy.
But cuts in money transfers that kept the economy afloat, primarily from the United States and the West Bank-based PA government, have contributed to further economic deterioration, the World Bank said.
Gaza’s economy “has deteriorated exponentially in recent months and has reached a critical point,” Marina Wes, World Bank Country Director for West Bank and Gaza, said.
The Gaza Strip — home to around 2 million people — had a negative 6 per cent growth rate in the first quarter of 2018. It has a 54 per cent unemployment rate, which rises to 70 per cent among young people.
As part of a shift in US policy towards the Palestinians, Washington cut over 50 million dollars in aid to Gaza in August and stopped funding the UN agency for Palestinian refugees (UNRWA) after providing 365 million dollars last year.
The PA has cut payments to Gaza by 30 million dollars per month since 2017 in a bid to pressure its rival Hamas to cede power. The World Bank will present the report at the Ad Hoc Liason Committee, a meeting of international donors to the Palestinian Territories, on Thursday.
TRUCE TALKS
A senior Hamas official denied on Tuesday that Egyptian-brokered talks on reconciliation with the Palestinian Authority and a lasting truce with Israel have collapsed, but admitted progress was slow.
“The efforts of our Egyptian brothers continue on the file of Palestinian reconciliation and the calm with the (Israeli) occupation,” spokesman Sami Abu Zuhri said.
“We in Hamas are responsive to these ongoing efforts.”
Egypt has for months been seeking to broker two separate deals.
One would bring Hamas and president Mahmud Abbas’ Fatah party together a decade after a split, and another would see a lasting truce between Hamas and Israel in exchange for a loosening of the Jewish state’s blockade of the Gaza Strip.
UN officials have also been involved in the indirect discussions between Hamas and Israel.
A senior Hamas leader said on Tuesday that a delegation would visit Cairo to continue negotiations in the coming days. An Egyptian security delegation travelled to Gaza for a few hours on Saturday for a visit that included a meeting with Hamas leader Ismail Haniya. — dpa/AFP
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