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UNCTAD Press Conference: Report on Programme of Assistance to the Palestinian People 25 October 2023
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Press Conferences | UNCTAD
UNCTAD Press Conference: Report on Programme of Assistance to the Palestinian People 25 October 2023
LINK to the press release: https://mailchi.mp/unctad/palestine-report?e=5b97b4c2da
LINK to UNCTAD PDF report on its Programme of Assistance to the Palestinian People 2023: https://unctad.org/system/files/official-document/tdbex74d2_en.pdf
Launch of the UNCTAD report on its Programme of Assistance to the Palestinian People 2023
Speakers:
- Richard Kozul-Wright, Director, Division on Globalization and development Strategies
- Mutasim Elagraa, Coordinator, UNCTAD Assistance to the Palestinian People
UNCTAD PRESS RELEASE: https://mailchi.mp/unctad/palestine-report?e=5b97b4c2da
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Teleprompter
Good morning, everyone.
This press conference will present the annual UNCTARD report on its assistance to the Palestinian people.
It's an annual report and we have on the podium 2 speakers, Richard Koswright, who is the Director of the Division on Globalisation and Development Strategies.
He will present the context of this report and Mutasimel Agra will give some more details into the data and dig deeper into the data to explain the analysis of this report.
We are in the embargo until the end of this press conference, roughly at 12.
And I, without further adieu, I give you the floor.
Richard Coso, right over to you.
Thank you, Catherine.
Good morning, everybody.
I will just provide a broad context for this report.
The report comes from a request of our Trade and Development Report Board to undertake research and analysis of the Palestinian economy which began in 1969 and more systematically from 1985 onwards when Ongtad established a dedicated unit to monitor economic trends in the Palestinian economy.
This particular report on the developments in the economy of the Occupied Palestinian Territories was first requested by our Trade and Development Board in 1986.
Needless to say, solid evidence based analysis depends on good quality data.
This is a challenge in the case of the Palace of the Palestinian economy.
In this regard, UNCTAD draws on available sources from the Palestinian and Israeli statistical officers, as well as our own modelling, estimates and calculations.
The report in this case has credible and reliable data until the end of 2022.
And that's the basis for this report.
There is, there is more tentative and and incomplete data for the 1st and the second quarters of 2023, but but it's not solid enough for us to draw on at the moment.
It goes without saying, I think, that the economic consequences of the current and ongoing humanitarian crisis in Gaza are impossible to determine.
What the report does document is the profound economic challenges facing a community under occupation, which in the case of Gaza is compounded by an economic blockade which began in 2007 and along with intermittent military operations.
In our report in 2012, we already warned that Gaza would become unlivable by 2020 given the trends we documented back then.
2020 proved a particularly challenging year given the COVID-19 shock.
And while the recovery of sorts has taken place in the occupied territories of the West Bank, that has not been the case in Gaza.
And that Divergent, which continues a 16 year trend of D development is documented in the report that we're launching today.
Looking beyond the current moment as we must do, however difficult that is under the circumstances, the report is very clear and I'll just quote the from the report.
The vicious circle of destruction and partial reconstruction must be broken by negotiations of a peaceful solution based on international law and relevant Security Council and United Nations resolutions to enter hostilities, and by redoubling donor's support for the recovery of the war-torn economy.
While donor aid is important for extending A lifeline to the beleaguered people of Gaza, it should not be viewed as a substitute for ending the blockade and calling on Israel to fulfil its obligations under international law.
I think it's fair to say that without such progress, the two state solution which the United Nations continues to see as the only realistic basis for lasting peace, sustained economic recovery of the Palestinian economy and the chance of a fuller life for its people will become moribund.
So with those opening remarks, Potassium, if you can provide some detail on the particularities of of the report this year?
Thank you.
Thank you, Richard.
Thank you, Catherine.
As Richard said, this report is an annual report.
This year the report covered 2022 and the fairest half of 2023 and it has nothing to say about anything that occurred after June 2023.
The statistical data I will mention, almost all of them pertain to 2022 because we don't have solid data for 2023.
The report has three chapters.
The various chapters survey the Palestinian economy and the second chapter focus is specifically on Gaza.
The 3rd chapter, you know, sketches on it that technical cooperation for the Palestinian people.
So in the fairest here I'll say a few things about the state of the Palestinian economy as a whole.
And in the latter part of my presentation I will talk about the situation in Gaza in 2022 and the fair is half of 2023.
So the economic in the Palestinian economy, in the whole Palestinian economy have been grim in 2022.
They have been grimmered in Gaza, but they have not been pretty in in the West Bank.
2022 was characterised by heightened political tension and the longest all peace process.
As a result of all of that, 2022 was one of the worst years for the Palestinian people in in recent history and obvious that 2023 is shaping up to be even worse.
In 2022, GDV with that is gross domestic product in Palestine grew by three by nine, 3.9%.
But the economy failed to recover from fully recover from the COVID-19 shock.
And the evidence is that in 2022, GDP per capita in Palestine was 8.6% lower than its level in 2019, before the arrival of the COVID shock.
In Raza, GDP per capita in 20/22 was 12% lower than 2019 and close to its lowest level since 1994.
That makes it like 4 decades of of lost development or 4 decades of of development.
Unemployment in Palestine, in in the West Bank was 13%, in Gaza it was 45%, in Palestine as a whole it was 24%.
But this number and the restates the problem because to be counted among the unemployed, one has to be looking for work.
If you lost hope of finding a job and stopped in looking for work, you're not counted as unemployed.
So if we Add all those people who lost hope in finding jobs, the statistics are much worse, especially in Gaza.
So if the real unemployment in Gaza is really worse than 45 percent, 45% is only includes those who are looking for work.
45% of people who are looking for work cannot find it, but there are even more people who stopped looking for work.
The unemployment crisis, you know like worse in poverty and rendered 40% of the Palestinian people in need of international assistance, humanitarian assistance.
On top of that, in 2022 there was a global food and energy price shock.
Food and energy prices around the world increased and this was transmitted to the Palestinian economy because it Palestinian economy imports energy and it imports most of its food.
2/3 of the food produced in Palestine is imported.
And of course poorer families were affected more and disproportionately because food account for the greater share of their expenditure.
I mean the lower you are, the greater the percentage of your expenditure on food.
You all know that the report also talks about the deep, the deep dependency of the Palestinian economy on the economy of Israel.
And this dependency like is not natural, it is political, politically generated at least.
So Palestinian economy is dependent and it's straight on the on the Israeli economy.
Why?
Because the restrictions that are placed by occupation increases the trade cost for Palestinian people.
For a typical Palestinian firm to export or to import, the cost, the transaction cost, you know, the cost of transportation, the storage and insurance and all that is 3 times as **** compared to a a similar Israeli firm.
And it take a Palestinian firm like 4 times as long to finish an importation process.
For all of these reasons.
Palestinians like they just depend on the Israeli economy for trade.
Most of Palestinian exports go to Israel and most of Palestinian imports come from Israel.
In in total, Israel account for 72% of Palestinian trade.
You know, like almost 3/4 of Palestinian trade is with Israel and because the loss of the ability of the Palestinian economy to compete, exports finance less than one 4th 1/4 of the total import bill.
So the export sector is really, really, really weak.
Palestine also suffer from monetary dependence on Israel.
Palestine does not have a national currency.
The Israeli shekel is the main currency in circulation in the Palestinian economy.
And of course, the exchange rate of the shekel is determined by in Israel, according to economic trends in Israel and according to military policy in Israel.
And the Palestinian people have just used that exchange rate.
I mean, the shekel is a very well managed currency.
It is suitable for the needs of the Israeli economy.
But the Palestinian economy, like it's vastly different.
The Israeli economy is an advanced, sophisticated economy.
It's an OECD level economy, but the Palestinian economy is an underdeveloped economy and it's an economy under recubation.
So it's using a currency and an exchange rate that is like suitable for a completely different economy.
And that makes like in any economies, the most important prices are the exchange rate and the interest rate and the wage rate.
And all these key prices in Palestine are either completely determined in Israel or by by the Israeli economy or they're heavily influenced by it.
And that has that takes a a heavy toll on Palestinian international competitiveness.
It's Palestinian producer find it very hard to compete in in international markets and even in domestic market.
Palestine also suffer from dependency and on the Australian economy for employment in the West Bank.
23% of employed people in the West Bank work in settlements, in Australian settlements and in the Israeli economy.
That's almost one in four working people in the West Bank.
Work is either in Israel or in settlements and the earn around 4:00 billion dollars a year.
That is like 25% of Palestinian GDP.
And it is important to notice that without employment in settlement and in Israel, unemployment in the West Bank will be very, very ****, close to it's really catastrophic levels in Gaza.
And the reward wound again is over reliance on employment in Israel and settlements because this employment is precarious and it's extremely sensitive to political crises.
It is extremely sensitive to security crises.
And these crises are really, really OK at **** frequency.
And when they will have a security crisis, then this employment either reduced very much or completely disappeared.
And, and the situation gets even worse on the fiscal side because, you know, like Israel collect trade, Palestinian trade taxes because all Palestinian import and export goes through Israel or through Israeli controlled borders.
So Israel collect trade taxes and pass them to the Palestinian government in Ramallah.
Effectively, Israel controls 2 shares of Palestinian tax revenue and it transferred it to the Palestinian government.
But sometimes it delays the transfer, sometimes it take unilateral cuts for reasons it mentions, or sometimes it freezes at the transfer.
So that makes the Palestinians really fiscally vulnerable.
And and now I turn to settlements in the West Bank, as the United Nations Security Council Resolution 2334 of 2016 reiterated, demand that Israel immediately and completely cease all settlement activities.
And the Security and Security Council resolution reaffirm that the establishment of settlements, including in East Jerusalem, had no legal validity and constituted A flagrant violation under international law.
That Security Council resolution notwithstanding, settlements and outposts continue to grow in 2022 and 2023, so settlements and de facto annexation of much of Area C of the West Bank undermine prospects for achieving the two state solution by eroding its territorial and geographical basis.
The two State solution endorsed by the United Nation as a consensus and the near total consensus of the international community requires ending and reversing settlement activities and that is the only way for suffering Palestinian states to be established along the 1967 borders.
Also, the occupying power prevent Palestinian to build in in area C with an area C, 6060% of the West Bank is completely under the occupation of Israel.
Palestinians cannot build anything there and to build they need to get obtained permit.
And since 2016 only about 1% of requests for permit has been approved and 99% rejected, 1% approved.
So Palestinian like find it the only way to for them to build is just to build without permit.
And when they when they build without permit, Israel destroys these buildings at zoner expense.
So 2022 witnessed the highest number of demolition of Palestinian structures in over a decade.
953 structures were demolished and at owners expense.
In East Jerusalem, 144 building were demolished.
74 were demolished by their owners to avoid fines.
OK, Now the Palestinian National Authority was established in 1994.
Now it's called the Palestinian government.
And by that I mean the government in Ramallah headed by President Abbas and Prime Minister Ristiya.
The government is saddled with responsibilities and complex problems and without really resources to address these really complex social, political and economic problems.
In the past, donor aid has been helpful, but aid has been declining in the last few years.
Like for example in 2022, foreign aid wind deal to $550 million and compare that to 20,000 and eight.
In 20,000 and eight, donor aid was 2 billion from 2 billion in 2008.
It diminished to 550 in 2022.
And that has really, really serious economic ramification.
It has a serious political ramification and it's undermining the ability of the government in Ramallah to carry out normal state functions.
In Chapter 2, we talk a little bit about Raza.
We say that Israel occupied Raza, the West Bank and is Jerusalem in 1967.
Israel withdrew from Raza in 2005, but it retained control over the aerospace and all land and sea borders of Gaza except for 12 kilometres border with Egypt.
Other than this 12 kilometre Israel controls all air, land and sea borders of Gaza.
Exit is an entry to Gaza, it needs Australia permission and this permission are are not always granted and so and Gaza has one of the highest population densities in the world and the density per square kilometre is around 6000 people per square kilometre.
People are really cramped and the economy was also suffer from Israel, Israel's ban on the importation of certain technology and production inputs.
And there's a dual list system.
The dual list use the dual list system is, you know, this list of civilian goods that can have potential military applications.
So these are either completely banned or importing them.
You need a permit from OK.
Unit permit from from Israel.
So let me say that several military operation took place in Gaza in 2008, 2012, 2014, 2021-2022.
They devastated the capital stock and the productive base of Gaza.
So a chronic humanitarian crisis has evolved, fostering the dependency of 80% of the people of Gaza on international aid and household cope with the crisis by by borrowing, accumulating debt, cutting food consumption in terms of quantity and quality and cutting on essential services like health and education.
So as international efforts for recovery in Gaza remain inadequate and far below the level of facing need.
And so let me finish by saying that the catastrophic situation in Gaza should not blind the international community to the immense suffering of the Palestinian people in the West Bank.
The situation in Gaza is in critical, but it is not breed in the West Bank.
Thank you very much.
Thank you very much, Motabsim.
We will now open the floor for question.
I will start in the room.
Yes, Gabriella, can you identify yourself on that?
Yes, Gabrielle Tetrofiber from Reuters news agency.
I have a question for Mr Cosal Wright.
The report says that donors international community need to extend significant economic aid to repair the extensive damage Gaza is experienced under prolonged.
Restrictions.
I was just wondering if you had an idea of in fact, how significant this economic aid would need to be to, to repair the economy if this is billions, trillions, if you have any ballpark figure for that.
And secondly, I know it's must be difficult to to assess, but your thoughts on how this current situation will affect the the Palestinian economy, especially that of Gaza?
Thank you.
I mean, it's, it's incredibly difficult to to make an assessment of the damage because what is being destroyed is the stock of capital.
I mean it's buildings, it's hospitals.
I mean, so, so trying to make an, an assessment of that once the fighting has, has has stopped will itself be, you know, incredibly difficult as as potassium just said, we've, we've seen a quartering essentially of aid to the Palestinian economy, not just Gaza over the last 1516 years.
So, so, so I, I, I really, I don't know, you know, it's a, it's a very difficult to make a proper assessment until, until things stop, but it's, it's going to be in the billions of dollars, but that there's no doubt it's going to be in the the 10s of billions of dollars.
And, and so, you know, what I think the report emphasises is the worrying trend in aid to the Palestinian economy, plus its inability to generate its own fiscal revenues in an independent way.
As as Mutazim said, that that fiscal, the, the, the authorities do not have fiscal autonomy.
So we have neither sufficient international support or an inability, we're coupled with an inability to mobilise domestic resources, which which you know is a incredibly constraining situation financially for for the authorities in, in, in both Ramallah and, and in Gaza on the oh, sorry, on the we again in the same the consequence.
One thing we are seeing that I think it is important to recognise in terms of the immediate consequences and as and as Mutasim said, those are not confined to Gaza.
So in an economy where 25% of your labour force depends upon employment in outside of the Palestinian areas, either in Israel itself or, or in the settlements, the closure of, and, and that's already happening.
The, the closure of, of the ability of those people to continue working in those is, is itself an immediate impact of the, of what is happening now, not just on the Gazan economy, but also on the, on the wider Palestinian economy.
So we're seeing the ramifications already.
Yes, please.
Can you identify yourself on your media?
Thank you, doctor from AP.
Doctor Matosim, you have mentioned that the economic situation in Palestine has deteriorated.
I'm wondering if you have been received any financial support from Gulf countries or Arab countries.
I mean your your office to manage this problem.
Arab countries have been providing support to the Palestinian government off and on.
Sometimes it increases, sometimes it's, it decreases.
But it has always been there at with different levels.
In terms of anecdotes, assistance of the Palestinian people unit in, in the past like few years, we received some support from some Arab countries like Bahrain and Kuwait and sorry, not Kuwait, Qatar and Saudi Arabia.
And and we also receive political support from other other countries and organisations around the world and of course from the United Nations Trade and Development Board as a General Assembly.
Thank you very much.
Now I go to the to the online participants.
I have Jamie Keaton from AP and Antonio Boto after after you Jamie over to you.
Can we on mute?
Yes, thank you.
Thank you.
Can you hear me?
Yes, I'm following up on Taha's question.
I wanted to just find out if you could tell us what the impact of the visa ban that Israel has announced with regard to UN personnel will have on your ability to study the situation in the Palestinian areas and what is the direct impact of that for your work?
Thank you.
Thank you.
Jimmy.
Didn't get the.
Word, Jamie, Sorry, I didn't get the what was the nature of the ban you mentioned?
Sorry to.
Enter that.
So the Israeli ambassador to the United Nations in New York announced that they were going that Israel is going to cease providing, if I understood it correctly, cease providing visas to UN staff for for entry to Israel.
And I'm wondering what kind of impact that will have on your, on your work.
In the past, we used to be able to go to the West Bank and most of the time Israel will grant us visa and there was only just a few occasion when the visa was delayed or rejected, but these were were very few.
So in general, we have been able to access the West Bank and we get the visa without much complications.
And but we have not been able to go to Gaza for for a very, very long time because the situation in Gaza is really is, has been really difficult.
But as far as there is banking concerned, so far we have been able to to access it and we hope to be able to do that.
And we have been the Israeli authorities have been cooperative in that regard.
Thank you very much.
Antonio Brotto Fe can we unmute Antonio over to you?
Thank you very much.
So today the UN operations in Gaza may come to a halt because the lack of fear.
I wonder if you have any comments on this, how this could affect the the economy that you already presented as very green last year?
Thank you.
I mean, as I said, the longer term impact on the economy is very difficult to judge.
The lack of fuel will have a profound impact on the humanitarian support that the UN is, is currently providing and is essential lifeline for many of the inhabitants of, of Gaza.
So I think the, the, the impact will be immediate on, on, on the ground, but it's humanitarian rather than in terms of trying to make an assessment of, of what it's going to do longer term to the, to the Gazan economy.
We have Ravi count online.
Can we unmute Ravi?
Ravi, can you identify yourself and your media?
Thank you.
Yeah, No, my name is Ravi Kant.
I work for several publications, one in India and one in Washington and one in Geneva.
Uh, the question is very simple.
At a time, uh, when the US, uh, what is the US contribution to the Palestinian budget?
Has it been providing any, uh, significant amount of assistance to the Gaza people in both West Bank and Gaza?
Uh, at a time when the US is providing 10s of billions worth of weapons for weapons to destroy Gaza and other places, does their aid in contrast, show anything, you know, that one can consider at this point of time?
What is their aid to the Palestinian economy?
And in terms of the monies that they're providing to Israel to destroy Gaza, how do you assess this situation?
Thank you, Avi.
Well understood.
Yes, Mutasim is answering.
Yeah.
I mean, historically, the United States government used to support the Palestinian government and support on Rua and much of it supports the Palestinian people goes through on Rua.
But during the previous administration, that support has been stopped.
Support to on Rua has been restored with the new Biden administration and but support to the Palestinian government, you know, has been really, really low.
But the United States support for on royal has been very important and has been very helpful.
And we hope that it continues and it we hope that it is being increased given the increase in the need now.
Thank you.
John Zarro Costa is online has raised his hand.
John, can you?
Yes.
Yes.
Good morning.
It's yes, transplant cut and The Lancet as well.
I was wondering with reference to the drop in aid from 2 billion into O 8 to around 500 million last year.
Do you have a breakdown?
How much is that was bilateral aid and how much of that aid was from multilateral institutions, whether it's the world?
Bank.
Or other multilateral agencies, Do you have a breakdown and where have the biggest cuts occurred?
Which were the biggest?
Donors that have pulled.
Back.
Thank you.
John, do we have the data here or?
Yeah.
I mean, most of the air to Palestine comes on either from bilateral sources.
And the biggest donor for the Palestine has been the European Union and also the Arab countries.
I know that Palestine does not have capacity to borrow from outside, from multilateral agencies, but they get grants and decline.
I mean, it's a decline from many, many, many sources and for so many reasons, because there are so many other competing crises in the region.
And also donors have their own fiscal problems of in the last like few years already in the last decade.
But the European Union has maintained its support more or less unchanged and it remains the biggest donor.
Others, you know that their level of support varies over the years and the, the, the exact numbers are just available, but I cannot give them just off my head.
Maybe we can send them to, to John afterwards if you have the breakdown or we can give him something.
Yes, we'll do that.
John.
Antonio Porto, if you have a follow up.
Antonio.
Yes, thank you.
One of the main conclusions of the report is that the Israel and Palestine economies have emerged in these 30 years and now it represents Palestinian economy, 8% of Israeli economy.
So I wonder if this is the biggest difference between 2 economies, 2 neighbouring economies in the world.
And also if you have a percentages of past years, how how this has how this number has changed over the time.
Thank you, Thank you.
You have the floor.
But the report says that when the Oslo Accords were signed in 1993, there was there was much hope about the peace dividend.
And many people, respectable people, argued that the two economies will now converge because they are so close to each other geographically and economic relation and exchange between them is extensive.
So that means they they will converge by the laws of economic theory.
But this conversion did not occur because of many reasons, like related to the details of and dynamics of occupation.
So instead of convergence, the two economies divert.
Now Palestinian per capita GDB is 8% of Israeli per capita GDB.
So that's a measure of the divergent between the two economies and it also shows that the asymmetry of economic power between these two economies is just vast do.
We have the figure in 94.
What was the what was the per capita ratio?
But I can provide that after.
Yeah.
OK, We'll, we'll send you the the data after the press conference.
Lisa Schlein, West of America, you have the flow, Lisa.
Thank you, Catherine.
Yes, good morning, everybody.
Two things given the.
Current battering.
Of Gaza, Is it even possible for Gaza and also the West?
Bank, which is undergoing.
Some attacks to have a viable economy is that.
Even in the cards and then.
What is the IT it?
It seems as if both Israel and the Palestinian territories.
Are in some sense.
Dependent upon each other in terms of the Palestinian workforce, what its dependence upon Israel for money and Israel apparently at least in the past has needed the labour of Palestinians.
So if that goes by the wayside, what will the impact, likely impact on both societies be?
Thank you, Lisa.
Richard Kozurite will answer your question.
Yeah.
I mean, I think as our data shows, the asymmetry between the two economies is, is huge Viable economies need to be able to control their monetary policy, their trade policy.
They need to be able to generate sufficient fiscal space to provide services and support to their populations.
They need labour markets that are, at least to some extent, largely under the control of of the of the state itself.
Obviously it's very clear that when it comes to fiscal and policy space, the Palestinian economies both on the West Bank and in Gaza do not have the requisite degree of autonomy to be able to create a, a viable state.
But you know, as and, and that and as we've said in and as the UN maintains, correcting that situation is the basis for a peaceful solution.
A peaceful solution that we think would not only benefit the Palestinian people, but would also for the reasons you mentioned and the dependencies that already exist would benefit the people of Israel too.
So, so I, I think it's fair to say that we don't have the basis yet of a A2 state solution.
We have a one state reality and is the Israeli state is a viable modern state entity, but that's clearly not the case when it comes to the to the other side.
And, and I, you know, as we say, if we don't correct, I mean, it's there's a real danger that two states is going to become less a solution and more a subterfuge for the circumstances that that exist.
And, and until we kind of grapple with the structural needs of creating a a viable state for the Palestinian people, I think the dangers of the kind of repeated vicious cycle of violence and partial recovery will sadly continue.
Thank you very much.
Thank you very much for your participation.
We will stop here.
The the embargo lifts in a 12 noon, so it's close to the end of this press conference.
Thank you very much and have a good day.