File spoon-archives/postcolonial.archive/postcolonial_2002/postcolonial.0204, message 279


Date: Tue, 23 Apr 2002 12:00:13 +0400
From: "Dr. Salwa Ghaly" <sghaly-AT-sharjah.ac.ae>
Subject: [Fwd: BusinessWeek: In Palestine, an Economy Left in Ruins]


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From: "Sam Bahour" <sbahour-AT-palnet.com>
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Date: Sun, 21 Apr 2002 19:30:40 +0200
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Subject: BusinessWeek: In Palestine, an Economy Left in Ruins
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BusinessWeek   

APRIL 19, 2002   

NEWS ANALYSIS   

In Palestine, an Economy Left in Ruins   

By Stanley Reed in Jerusalem   

Even before the recent turmoil, half the population lived on less than $2 a 
day. Now, things will get much worse The 1993 Oslo Accords, between the 
Palestinians and Israelis, inspired many in the Palestinian diaspora to return 
to rebuild their ancestral homeland. One of those was Sam Bahour, now 37, 
a Palestinian-American software designer from Youngstown, Ohio. In 1995, 
Bahour moved to Ramallah to work for Palestine Telecommunications Co. 
Recently, he has been managing a $10 million project for Arab Palestinian 
Shopping Centers PLC. The mall near Ramallah is 90% finished and, so far, 
has escaped serious damage.   

But for the first time, Bahour is beginning to have grave doubts. He is 
frustrated at having been confined to his home except for brief periods since 
the Israelis took over Ramallah on Mar. 29. Violators of the curfew risk being 
shot. Bahour worries about the safety of his wife and two daughters. He also 
suspects that his state-of-the-art mall and other investment projects in the 
West Bank and Gaza may no longer be feasible. "After this level of 
destruction, I fear the building of a Palestinian state will be on hold," he 
says.   

Before the intifada that began in September, 2000, the Palestinian economy 
looked like a winner. Growth of gross domestic product was 7.4% in 1999 
and seemed set to hold up in 2000 until violence broke out. Private money 
and aid were pouring in, and Palestinian workers were benefiting from Israel's 
boom. Then came the intifada, and the Israeli response. Through the end of 
last year, they had cost $3 billion in economic losses and $400 million in 
damage to infrastructure and property, says the World Bank. The toll from 
the latest Israeli incursion will run tens if not hundreds of millions more.   

WAITING FOR STABILITY.   

The territories now look more like a humanitarian disaster than a business 
prospect. Income dropped 19% in 2001, to $1,375 per capita. Unemployment 
stood at 35% at the close of 2001. Fueling the rise, says the World Bank, 
were the Israeli roadblocks that strangle movement and commerce. Work in 
Israel, a source of 20% of GDP in normal times, has been curtailed, while 
agriculture and light industry in the territories have been disrupted. Before the 
latest violence, 50% of Palestinians lived on less than $2 a day. Now, says 
Palestinian Authority Minister of Economics & Trade Maher Masri, "we are 
going to have a much higher level of poverty."   

International donors will soon meet in Norway to prepare a response. But 
until the violence subsides, any gifts are likely to address relief above all. 
Meanwhile, the future of the Palestinian Authority, which has run the 
territories since 1994, is in question. It isn't clear whether the Israelis will 
tolerate the PA's existence anymore.   

Until such burning questions are resolved, it's unlikely there will be any major 
investment in the territories. The private sector has invested $2.5 billion in the 
past eight years, while international donors provided $4.5 billion. "Investors 
won't come again without assurances of real stability," worries Salah Abdel 
Shafi, an economic consultant in Gaza. Those assurances may be a long 
time in coming.   

Copyright 2000-2002, by The McGraw-Hill Companies Inc.
All rights reserved.   


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