World Bank says Gaza Strips economy on verge of collapse

Posted By on May 23, 2015

A Palestinian youth practices his parkour jumping skills in Gaza City in houses destroyed during the 50-day war last summer. Photograph: Reuters/Mohammed Salem

A new World Bank report has warned that the Gaza Strips economy is on the verge of collapse, saying the unemployment rate there is now the highest in the world.

The damning report, released on Friday, claimed blockades, war and poor governance have strangled the economy of the Gaza Strip, ruled by Hamas.

Gazas gross domestic product would have been an estimated four times higher if not for conflicts and restrictions, including a blockade in place since 2007.

Israel, backed by Egypt, imposed the blockade on Gaza after the Islamist Hamas won elections in 2006 and seized control of the territory the following year from forces loyal to western-backed Palestinian president Mahmoud Abbas.

Israel defends the blockade as necessary to prevent militant weapons smuggling, while human rights groups criticise the restrictions as collective punishment.

The report, which will be presented to a donors conference next week, said Gazas economy was badly hurt as a result of the three wars fought between Hamas and Israel since 2007 including a 50-day conflict last summer.

It said about 43 per cent of Gazas 1.8 million residents are unemployed, with youth unemployment soaring to 60 per cent. Nearly 80 per cent of Gazas population receives some kind of social assistance, and almost 40 per cent fall below the poverty line.

The current market in Gaza is not able to offer jobs, leaving a large population in despair, particularly the youth, Steen Lau Jorgensen, World Bank country director for the West Bank and Gaza, said in the report.

The ongoing blockade and the 2014 war have taken a toll on Gazas economy and peoples livelihoods. The economy cannot survive without being connected to the outside world.

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World Bank says Gaza Strips economy on verge of collapse

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