Israel’s blockade of the Hamas-ruled Gaza Strip has cost the seaside territory as much as $16.7 billion in economic losses and sent poverty and unemployment skyrocketing, a U.N. report said Wednesday, as it called on Israel to lift the closure.
The report by the U.N. Conference on Trade and Development echoed calls by numerous international bodies over the years criticizing the blockade. But its findings, looking at an 11-year period ending in 2018, marked perhaps the most detailed analysis of the Israeli policy to date.
Israel imposed the blockade in 2007 after Hamas, an Islamic militant group that opposes Israel’s existence, violently seized control of Gaza from the forces of the internationally recognized Palestinian Authority. The Israeli measures, along with restrictions by neighbouring Egypt, have tightly controlled the movement of people and goods in and out of the territory.
Israel says the restrictions are needed to keep Hamas from building up its military capabilities. The bitter enemies have fought three wars and numerous skirmishes over the years.
But critics say the blockade has amounted to collective punishment, hurting the living conditions of Gaza’s 2 million inhabitants while failing to oust Hamas or moderate its behaviour. Gaza has almost no clean drinking water, it suffers from frequent power outages and people cannot freely travel abroad.
“The result has been the near-collapse of Gaza’s regional economy and its isolation from the Palestinian economy and the rest of the world,” the U.N. agency said in a statement.
The report analyzed both the effects of the closure, which has greatly limited Gaza’s ability to export goods, as well as the effects of the three wars, which took place in 2008-2009, 2012 and 2014.
Video appears to show Israeli missiles intercept rockets fired from Gaza Strip
The last war was especially devastating, killing over 2,200 Palestinians, more than half of them civilians, and displacing some 100,000 people from homes that were damaged or destroyed, according to U.N. figures. Seventy-three people, including six civilians, were killed on the Israeli side, according to Israel’s Foreign Ministry, and indiscriminate Hamas rocket fire brought life to a standstill in southern Israel.
Using two methodologies, the report said that overall economic losses due to the blockade and wars ranged from $7.8 billion to $16.7 billion. It said Gaza’s economy grew by a total of just 4.8 per cent during the entire period, even as its population grew over 40 per cent.
These economic losses helped propel unemployment in Gaza from 35 per cent in 2006 to 52 per cent in 2018, one of the highest rates in the world, UNCTAD said.
It said the poverty rate jumped from 39 per cent in 2007 to 55 per cent in 2017. Based on Gaza’s economic trends before the closure, the report said the poverty rate could have been just 15 per cent in 2017 if the wars and blockade had not occurred.
“The impact is the impoverishment of the people of Gaza, who are already under blockade,” said Mahmoud Elkhafif, the agency’s co-ordinator of assistance to the Palestinian people and author of the report.
Israel has long accused the U.N. of being biased against it. The report, for instance, included only a brief mention that indiscriminate rocket fire at Israeli civilian areas is prohibited under international law. “Palestinian militants must cease that practice immediately,” it said.
Israel’s Foreign Ministry accused UNCTAD of failing its mission to assist developing economies and presenting a “one-sided and distorted depiction” that disregards ”terrorist organizations’ control over the Gaza Strip and their responsibility for what occurs in the Gaza Strip.“
Palestinian officials say Gaza ceasefire reached with Israel
“In light of all this, we cannot take the findings of the reports it publishes seriously, and this report is no different,” it said.
In Gaza, Hamas spokesman Hazem Qassem said the report revealed “the level of the crime” committed by Israel.
“This siege has amounted to a real war crime and pushed all services sectors in the Gaza Strip to collapse,” he said. “These figures also reveal the international inability to deal with the illegal siege on Gaza.”
Gisha, an Israeli human rights group that pushes for freedom of movement in an out of Gaza, said it was Israel’s “moral and legal obligation” to life the closure. “The true price paid by Palestinians in lost time, opportunities, and separation from loved ones is inestimable,” it said.
The U.N. agency said it compiled the report at the request of the U.N. General Assembly and noted that it did not include other costs of Israeli occupation over the Palestinians. Israel captured the West Bank, east Jerusalem and Gaza Strip in the 1967 Mideast war, though it withdrew from Gaza in 2005.
UNCTAD, a technical agency that seeks to reduce global inequality, recommended that Israel lift the blockade to allow free trade and movement. It also called for reconstruction of Gaza’s infrastructure, addressing Gaza’s electricity and water crisis, allowing the Palestinians to develop offshore natural gas fields and for the international community to push Hamas and the Palestinian Authority to reconcile.
Associated Press writer Fares Akram contributed reporting from Gaza City, Gaza Strip.
© 2020 The Canadian Press
Canadian retail sales jump in November, but December looks gloomier
By David Ljunggren
OTTAWA (Reuters) – Canadian retail sales jumped by much more than expected in November, but preliminary figures for December suggest a sharp drop as novel coronavirus restrictions were re-imposed, Statistics Canada said on Friday.
Food and drink sales rose by 5.9% and helped push overall retail trade up by 1.3%, its seventh consecutive monthly gain and significantly greater than the 0.1% increase predicted by analysts in a Reuters poll.
Most retail businesses were open in November but as the second wave of the coronavirus spread, many provinces imposed clamp downs. Statscan said December retail sales looked set to drop by 2.6% but stressed this was a preliminary estimate.
“The expected tumble in December retail sales following the pop in November conforms to the Bank of Canada‘s outlook, which sees weakness at the turn of the year,” said Ryan Brecht, a senior economist at Action Economics.
The Bank of Canada forecast on Wednesday that the economy would shrink in the first quarter of 2021 due to the impact of temporary business closures.
Shortly after the data were released the Canadian dollar was trading 0.5% lower at 1.27 to the greenback, or 78.74 U.S. cents, with the currency giving back some of this week’s gains as oil and global shares fell.
Statscan is due to issue November GDP data on Jan. 29 and Royce Mendes, a senior economist at CIBC Capital Markets, said the agency’s flash estimate of 0.4% growth still seemed reasonable. The estimate was released on Dec. 23.
Overall November sales were up in 7 of 11 sub-sectors, representing 53.4% of retail trade, while in volume terms, retail sales rose 1.2%.
(Reporting by David Ljunggren in Ottawa and Fergal Smith in Toronto; Editing by Ken Ferris)
Biden's rescue plan will give U.S. economy significant boost: Reuters poll – TheChronicleHerald.ca
By Indradip Ghosh and Richa Rebello
BENGALURU (Reuters) – U.S. President Joe Biden’s proposed fiscal package will boost the coronavirus-hit economy significantly, according to a majority of economists in a Reuters poll, and they expect it to return to its pre-COVID-19 size within a year.
Biden has outlined a $1.9 trillion stimulus package proposal to jump-start the world’s largest economy, which has been at the epicenter of the COVID-19 pandemic having lost over 400,000 lives, fueling optimism and sending Wall Street stocks to record highs on Thursday.
Hopes for an upswing in U.S. economic growth, helped by the huge stimulus plan, was reflected in the Jan. 19-22 Reuters poll of more 100 economists.
In response to an additional question, over 90%, or 42 of 46 economists, said the planned fiscal stimulus would boost the economy significantly.
“There are crosswinds to begin 2021 as fiscal stimulus helps to offset the virus and targeted lockdowns. The vaccine rollout will neutralize the latter over the course of the year,” said Michelle Meyer, U.S. economist at Bank of America Securities.
“And upside risks to our…growth forecast are building if the Democrat-controlled government can pass additional stimulus. The high level of virus cases is extremely disheartening but the more that the virus weighs on growth, the more likely that stimulus will be passed.”
For a Reuters poll graphic on the U.S. economic outlook:
The U.S. economy, which recovered at an annualized pace of 33.4% in the third quarter last year from a record slump of 31.4% in the second, grew 4.4% in the final three months of the year, the poll suggested.
Growth was expected to slow to 2.3% in the current quarter – marking the weakest prediction for the period since a poll in February 2020 – amid renewed restrictions.
But it was then expected to accelerate to 4.3%, 5.1%, 4.0% in the subsequent three quarters, a solid upgrade from 3.8%, 3.9% and 3.4% predicted for those periods last month.
On an annual basis, the economy – after likely contracting 3.5% last year – was expected to grow 4.0% this year and 3.3% in 2022, an upgrade from last month.
For a graphic on Reuters Poll – U.S. economy and Fed monetary policy – January 2021:
Nearly 90%, or 49 of 56 economists, who expressed a view said that the U.S. economy would reach its pre-COVID-19 levels within a year, including 16 who expected it to do so within six months.
“Even without the stimulus package, we had already thought the economy would get back to pre-COVID levels by the middle of this year,” said Jacob Oubina, senior U.S. economist at RBC Capital Markets.
“With the new stimulus package there will be more direct money in people’s pockets, easily boosting the economy, provided a vaccine rollout progresses in a constructive manner.”
But unemployment was not predicted to fall below its pre-pandemic levels of around 3.5% until 2024 at least.
When asked what was more likely for inflation this year, only one said it would ease. The other 40 economists were almost evenly split between “a significant pickup” and price pressures remaining “about the same as last year.”
Still, the core Personal Consumption Expenditures (PCE) price index – the Federal Reserve’s preferred inflation gauge – was forecast to average below the target of 2% on an annual basis until 2024 at least, prompting the central bank to keep interest rates unchanged near zero over the forecast horizon.
“I don’t think it will be an increase in underlying (inflation) trend, it is sort of a rebound in prices that have been depressed during the pandemic,” said Scott Brown, chief economist at Raymond James.
(For other stories from the Reuters global long-term economic outlook polls package:)
(Reporting by Indradip Ghosh and Richa Rebello; Additional reporting by Manjul Paul; Polling by Mumal Rathore; Editing by Rahul Karunakar and Hugh Lawson)
The U.S. economy likely grew 4.1% at the end of 2020, but GDP seen masking weakness in some sectors – MarketWatch
The U.S. economy may have grown about 4% in the final three months of 2020, a great showing even in the best of times.
These are not the best of times.
The economy still has lots of ground to make up, for one thing, after the deepest recession on record. And growth slackened off toward the end of 2020 after the coronavirus pandemic roared back and caseloads reached a record high, pointing to a loss of momentum in the economy early in the near year.
The U.S. fourth-quarter report on gross domestic product, due on Thursday, will still offer a useful diagnosis of the economy. It will tell us which parts have mostly recovered and which are still ailing.
economists polled by the Dow Jones/The Wall Street Journal predict a 4.1% increase in fourth-quarter GDP on an annualized basis. While that would mark a steep drop from the 33.4% increase in the third quarter, it still shows the economy forging ahead even as the coronavirus pandemic spiked again.
The details are unlikely to look quite as good.
The biggest component of the U.S. economy, consumer spending, almost certainly softened to mediocre 3% growth or less. Most government aid for the economy had faded away by the start of the quarter and businesses facing new government restrictions laid off more workers at the end of the year.
Business investment in structures such as oil rigs or office buildings was also weak.
Other drags on the economy included lower state and local spending and a bigger international trade deficit.
The economy got some sizzle from a surprising boom in the housing market. Low mortgages rates and people seeking more space outside the cities have lifted sales of previously existing homes to a 14-year high.
Businesses also started to rebuild their inventories — goods for future sale, that is — after letting them draw down early in the pandemic. That’s a good sign for 2021 since it suggests companies are expecting stronger sales.
Indeed, a pair of surveys of business executives in January suggest companies are banking on a better 2021, mostly because of rollout of coronavirus vaccines.
How soon the vaccinations levels are high enough to really help the economy, however, is still an open question.
“We only expect vaccination rates to be high enough to accelerate the economic recovery from mid-2021 onward,” said Cailin Birch, global economist at The Economist Intelligence Unit.
The promise of more federal financial aid from the Biden White House is also adding to the optimism, but the stimulus could take awhile to reach households and businesses. It’s also unclear how much aid Congress will approve.
What could also help the economy after a rocky start in the new year is rising consumer confidence. Americans historically spend more when they are confident and push the economy to greater heights.
A pair of surveys this coming week, consumer confidence and consumer sentiment, will give another glimpse into whether the hopes inspired by the vaccines are outweighing the angst caused by the record number of coronavirus cases.
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