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Socioeconomic conditions in the occupied Palestinian territory are growing more dire, the United Nations Conference on Trade and Development (UNCTAD) warned on Tuesday, as the financial fallout of the coronavirus pandemic compounds an already bleak economic landscape.
“Even before the economic shock due to the coronavirus disease [COVID-19] pandemic, the [Palestinian] economy was expected to slip into recession in 2020 and 2021,” UNCTAD wrote in its latest report (PDF) on assistance to the Palestinian people.
That outlook darkened further, said UNCTAD, as a result of several factors: annexation of large areas of the Israeli-occupied West Bank, the economic damage wrought by measures to contain the spread of COVID-19, faltering aid flows as donors are squeezed financially by the pandemic, and an onerous customs union with Israel that leads to hundreds of millions of dollars of Palestinian tax revenue leaking to Israel’s treasury.
Khalil Fatayer, 83 and one of the oldest Palestinian soap makers in Nablus, arranges bars of soap at his shop in the old quarters of the occupied West Bank city [File: JAAFAR ASHTIYEH /AFP]
“The ‘pre-existing conditions’ in the occupied territories are essentially malignant. And they will get worse over the coming years as the consequences of COVID-19,” said Richard Kozul-Wright, director of UNCTAD’s division on globalisation and development strategies.
“Inequality, indebtedness, insecurity, [and] insufficient investment have been long-standing problems in the Palestinian occupied territories,” he told a news briefing.
Palestinian health officials have reported 215 deaths from COVID-19 and more than 35,000 infections across the West Bank, Gaza and East Jerusalem, territory Israel captured in the 1967 Middle East war.
A UN aid group has warned that a lack of key medical items in Gaza could make it hard to treat the disease effectively.
“The situation in the occupied Palestinian territories is going from bad to worse,” Mahmoud Elkhafif, UNCTAD’s coordinator of the assistance to the Palestinian people, told the briefing.
The occupied Palestinian territory is tied into a customs union that allows Israel to control some two-thirds of Palestinian tax revenues.
UNCTAD estimates that prior to the pandemic, this arrangement resulted in the leakage of hundreds of millions of dollars of Palestinian financial resources to Israel’s treasury, equalling some 3.7 percent of Palestine’s annual economic output as measured by gross domestic product (GDP), or 17.8 percent of total tax revenues.
This already substantial loss was exacerbated by a depression-level unemployment rate that hit 33 percent in 2019.
Donor help has also plummeted in recent years, from a high of 32 percent of GDP in 2008 to 3.5 percent in 2019.
This year, as the pandemic ravages economies around the globe, donor support is expected to decline to $266m, “the lowest in more than a decade,” said Elkhafif.
By April 2020, revenues collected by the Palestinian National Authority from trade, tourism and transfers had declined to their lowest levels in 20 years, it said.
To allow for expansion of Israeli settlements in the West Bank, the Israeli zoning and planning regime “makes it nearly impossible for Palestinians to obtain permits to build in their own land for any purpose”, the report noted.
Last year, Israel demolished or seized 622 Palestinian structures in the West Bank, it said.
SOURCE:
Al Jazeera and news agencies
(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
©2024 Bloomberg L.P.
The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
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Published Apr 18, 2024 • 2 minute read
(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
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The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
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Article content
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
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Article content
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
Article content
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