Prolonged Crisis in the Occupied Palestinian Territory:
Recent Socio-Economic Developments


This report is the second in a series of UNRWA studies examining economic conditions facing Palestinians in the occupied Palestinian territory (oPt). It gives a detailed presentation of Palestinian living conditions during 2006 – a year of unprecedented economic and fiscal crisis in the oPt – through analysis of special data on employment, poverty levels and domestic economic activity prepared by the Palestinian Central Bureau of Statistics.

The report focuses on the differential impact of the latest phase of the crisis on Palestine refugees, whose humanitarian and human development needs are central to UNRWA’s mandate. The findings demonstrate that in 2006 refugees continued to be more adversely affected by the crisis than non-refugee Palestinians, in terms of both household poverty and unemployment levels.

By placing Palestinian economic performance in a regional context, the report also sheds further light on the impact of continued restrictions on movement, repeated destruction of physical assets and, in particular, the de facto sanctions regime. It presents a bleak picture of current Palestinian economic conditions and prospects for future growth under conditions of closure and restricted movement, which have been tightened further since the period under review.

The report also highlights the immediate and longer term damage being wrought by the continued lack of investment spending in the private and public sectors in the oPt. Whilst 2006 may have been the year of unpaid public employees, the deficit in public and private investment caused by the de facto sanctions regime will have negative consequences for economic growth and societal development in the oPt for years to come. Such investment is essential for the development of a decent society and a healthy and viable economy.