Impact on the Palestinian Economy of the Recent Confrontations – UNSCO report summary (1 Oct. 2000-31 Jan. 2001)

Office of the UN Special Co-ordinator

The Impact on the Palestinian Economy of Confrontations,

Mobility Restrictions and Border Closures,

1 October 2000—31 January 2001

Summary

Movement Restrictions

The lack of freedom of movement for people and goods caused by the present crisis has resulted in socio-economic hardships in the Palestinian Territory.  During the 123-day period 1 October 2000—31 January 2001, the Israeli-Palestinian border used for labour and trade flows was closed for 93 days or 75.6% of the time.  Internal movement restrictions and internal closures—partial or severe—have been in place for 100% of the time in the West Bank and for 89% of time in Gaza.  The international border crossings to Jordan (from the West Bank) and to Egypt (from Gaza) have been closed for 29% and 50% of the time, respectively.  

Direct Economic Losses

The direct economic losses arising from movement restrictions are estimated at 50% of Gross Domestic Product (GDP) for the 4-month period and 75% of wage income earned by Palestinian workers in Israel.  The GDP loss is estimated at USD 907.3 million while the loss of labour income from employment in Israel is estimated at USD 243.4 million.  The total loss is estimated at USD 1,150.7 million, equal to 20 per cent of the projected GDP for the year 2000 (assuming no border closures).  The loss is about USD 11 million per working day or USD 3.5 per person per working day during the reporting period.  

In addition, there have been hundreds of millions of USD in damage to public buildings and infrastructure and to private property and agricultural land, in costs for caring for more than 11,000 injured Palestinians, and in public revenue losses and other effects of the closures.

Unemployment

Loss of employment in Israel plus mobility restrictions and border closures have resulted in an average unemployment rate of 38 per cent (more than 250,000 persons) as compared to 11 per cent (71,000 persons) in the first 9 months of 2000.  Due to the high dependency ratio in the Palestinian Territory unemployment now directly effects the incomes of about 900,000 people or 29 per cent of the population.  

Per Capita Income

In the absence of border closures, per capita income was projected to be about USD 2,000 in the Palestinian Territory in the year 2000.  As a result of the crisis, border closures and internal movement restrictions, this has been reduced to an estimated USD 1,680—a decline of 16%.   

Poverty

Since the beginning of the crisis, there has been a 50% increase in the number of people living below the poverty line, estimated by the World Bank as USD 2.10 per person per day in consumption expenditures (less than NIS 9 per day).  The number of poor has increased from about 650,000 persons to 1 million persons.  The poverty rate has increased from 21% to 32%.    

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