Israeli restrictive measures aggravate Palestine economy: World Bank

The photo shows a Palestinian man looking out over destruction caused by Israel’s 2014 war in Gaza City's al-Tufah neighborhood. (Photo by AFP)

The World Bank has published a gloomy report on the Palestinian economy, criticizing the Israeli restrictive measures as an impediment to Palestine’s financial growth.

The Israeli policies are “the main constraint to Palestinian economic competitiveness,” read the report released on Thursday, adding that the restrictions imposed by the Tel Aviv regime “have pushed private investment levels [in the Palestinian territory] to amongst the lowest in the world.”

The Palestinian Authority (PA) has managed to slash its deficit over the past decade, cutting it by 15 percentage points to 10 percent of Gross Domestic Product (GDP), but external financial support has dropped even faster, it added.

According to the report, foreign donors provided the PA with direct budget assistance worth almost 1.3 billion dollars in 2013, compared to less than 700 million dollars expected this year, leaving a large financing gap.

The only way to avoid wider economic problems for the 4.8 million Palestinians living in the West Bank and Gaza was for foreign donors to increase support, it further pointed out.

"The Palestinian economic outlook is worrying with serious consequences on income, opportunity and well-being," said Marina Wes, World Bank country director for the West Bank and Gaza.

The World Bank further estimated that the Palestinian economy would only grow by 3.5 percent in the coming years while “per capita income growth has almost stagnated and projected growth levels will not support an improvement in living standards.”

The international financial institution also called on the Israeli regime, which collects many taxes and fees on the Palestinians' behalf, to revert more of the revenue to the PA.

Elsewhere, the report focused on the situation in the besieged Gaza Strip, where unemployment rate stands at 42 percent and many international aid pledges have not been met.

A boy stands next to the ruins of a destroyed house in Beit Hanun, northern Gaza Strip, January 4, 2016. (Photo by AP)

Of the 3.5 billion dollars pledged by the international community in 2014 to help rebuild Gaza in the wake of a devastating Israeli offensive, only 46 percent has so far been delivered, with donor aid for Gaza being 1.3 billion dollars behind the schedule.

“Over 70,000 people are suffering from prolonged internal displacement. Only 10.7 percent of the 11,000 housing units that were totally destroyed in the war have been rebuilt to date, and about 50 percent of partially and severely damaged houses still need to be repaired,” Wes said.

“The situation in Gaza is of great concern and the conditions required for post-reconstruction sustainable economic growth are not being put in place,” she added.

The Gaza Strip has been under an Israeli siege since June 2007. The blockade has caused a decline in the standards of living as well as unprecedented levels of unemployment and unrelenting poverty.

The Tel Aviv regime has waged three wars on the coastal enclave since 2008, including the 2014 offensive, which left more than 2,200 Palestinians dead.