Thursday, June 23, 2011

An Example of the Fantasy Middle East: Spinning the Palestinian Economy to Claim the Opposite of Reality

By Tobias Buck in Jerusalem


Palestinian workers in the West Bank have so far failed to benefit from the recent surge in economic growth, with new research showing that unemployment is high and rising while wages continue to fall.

The survey offers a sobering counterpoint to recent statements by Israeli and international leaders hailing annual growth rates of more than 9 per cent in the West Bank and Gaza Strip. At the same time, it appears to confirm the concerns expressed by international economists and by Salam Fayyad, the Palestinian prime minister, who warned repeatedly that the revival of the Palestinian economy was “unsustainable” without further political progress.

News that one in four Palestinian workers is out of a job is also likely to fuel political worries. Tensions between Israel and the Palestinians have been on the rise in recent months, amid continuing disagreement over how to restart the deadlocked peace process. The two sides have also clashed over a recent deal to restore unity between rival Palestinian factions, and agreement which Israel rejects. According to the study by UNRWA, the UN agency in charge of Palestinian refugees, unemployment in the West Bank stood at 25 per cent in the second half of 2010 – compared with 23.6 per cent in the same period a year before. The rise came about despite the continuing influx of foreign donations and a period of strong economic growth.

Real wages, meanwhile, have declined by 2.61 per cent. The average Palestinian worker took home just 2,245 Israeli Shekel ($667) a month.

“This is one of the highest rates of unemployment in the world,” said Salem Ajluni, the author of the report. “GDP growth was quite substantial in 2010. It seems that this growth has not been fully reflected in employment growth,” he added.

The reasons for the discrepancy are not entirely clear, Mr Ajluni said, though population growth was clearly one factor. It was also “possible”, he added, that economic growth was the result of a boom in less labour-intensive areas of the local economy.

The downbeat economic news offered a striking contrast to the apparent surge in political optimism among Palestinians. According to a new opinion poll, also released on Wednesday, more than 83 per cent of Palestinians say they feel “optimistic” or “very optimistic” about the future – an increase of more than 15 percentage points compared to September last year.

The survey, by the Ramallah-based JMCC think-tank, also found broad support for the Palestinian campaign to gain international recognition for an independent state in the West Bank, Gaza and East Jerusalem. More than 66 per cent of respondents said they were optimistic that “a majority of world countries” would support the Palestinian request at the UN in September. More than 70 per cent said the UN move was a “good step”.

The survey’s findings suggest that the gap between public opinion and the Palestinian political leadership is starting to narrow. Backing for the UN move aside, there was an increase in support for both Mahmoud Abbas, the leader of the Fatah party and president of the Palestinian Authority, and Ismail Haniyeh, the leader of the Islamist Hamas movement in the Gaza Strip.

The two rival factions ended years of bloody conflict last month, signing a reconciliation agreement that promises the creation of a new national unity government. More than 85 per cent of respondents in the JMCC poll said reconciliation was a “good step”. An even greater share, more than 87 per cent, said they were optimistic or very optimistic that the Fatah-Hamas deal would indeed be implemented.

Political analysts and Palestinian officials have generally been far more sceptical over prospects for a return to national unity.

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