West Bank, Gaza Economies Scrutinized by UNSCO

by Colin MacKinnon

In a welcome move, the UNSCO (United Nations Special Coordinator in the Occupied Territories) office in Gaza has begun issuing detailed quarterly reports on the economies of Gaza and the West Bank. The first came out at the end of October; others will be appearing on a regular basis now. Anybody interested in the Palestinian economy will want to have a look at them. They draw on very late figures and, over time, the series will provide a first-rate view of how things are working, or not working, in the Palestinian Territory (PT).

The current report, an impressive 50-page document with excellent graphs and tables, looks at three broad areas—national income, the labor market, and household income and spending. It contains the usual dismal findings.

Between 1992 and 1996, mostly because of job losses in Israel and the decline in business between the Palestinian Territories and Israel caused by the Israeli closure policy, GNP in the West Bank and Gaza Strip fell 23 percent.

Worse, per capita GNP fell even more: 39 percent over the same period. The reason for the difference is the high population growth rate. Thus, in 1992, the PT’s real GNP was $5 billion when the population was 2,064,700, making per capita GNP $2,425. Five years later, in 1996, real GNP will be about $3.9 billion, but with a population now at 2,609,300, per capita GNP is $1,480.

The Palestinian labor force—the number of persons working or seeking work—grew at a rate of 5.6 percent during the first half of 1996, nearly double the growth rates of the general population and of the working-age population over the same period.

The work force is now well over half a million, but job creation hasn’t kept up with growth. Rising unemployment and falling wages are causing more people—men, women and children—to look for work to maintain family living levels. By mid-1996 the average unemployment rate stood at 29.2 percent in the PT, nearly 60 percent higher than at the end of 1995. Unemployment was higher in Gaza. It reached 39 percent as compared to 24 percent in the West Bank.

Higher rates of unemployment seem to be forcing down wages, which have fallen in absolute terms. When combined with the effects of inflation, the real purchasing power of average monthly wages has fallen 22.8, 9.6 and 16 percent respectively for Palestinian workers employed in the West Bank, Gaza and in Israel.

There’s much more of this and in great detail in the report.

“A report like this influences policy decisions and policy outcomes.”

This first report was written by Salem Ajluni, a California-born economist of Palestinian origin (his family is from Ramallah), who heads UNSCO’s Economic and Social Monitoring Unit. Right now Ajluni, who is 38 and formerly taught at Sienna College in Albany, NY, is the only person in the unit doing economic research, but he should be helped in the near future by four or five locally hired researchers.

“I very much like what I’m doing,” says Ajluni. “It has immediate relevance. I’m reporting to donor country representatives and United Nations agencies and these are all policy-oriented people. They’re all asking, ‘How much should we give and where should we put our money?’ and a report like this has some relevance. It doesn’t determine things by any means, but it influences policy decisions and therefore policy outcomes, and that’s very rewarding.”

Ajluni gets his information from multilateral institutions like the World Bank and from Palestinian sources, particularly the Palestine Central Bureau of Statistics. “The PCBS is the most important source,” says Ajluni. “They’re engaged in fairly comprehensive field surveys. Of course, they’re an institution in formation just like everything else here, but they’ve got some pretty good people there and their work has been central to what I do. Information comes at a cost, though. You have to go around and knock on doors and call people and visit and do all sorts of things.”

The Israelis have apparently stopped gathering economic data in the systematic way they did in the past. They have, however, turned over some of their data bases to Palestinian agencies, such as the PCBS.

UNSCO

UNSCO opened its offices in the spring of 1993, about six months after the Rabin-Arafat handshake in the Rose Garden. As its title indicates, the office coordinates U.N. work in Gaza and the West Bank, but also helps coordinate other donor work and, when asked, may intervene in political disputes between Israel and the Palestinian Authority.

The first special coordinator, the Norwegian Terje Larsen, who had much to do behind-the-scenes with the Oslo process, resigned in October. He’s been replaced by Peter Hansen, a Dane, who is also commissioner general of UNRWA.

On the Internet

For Internet surfers, the UNSCO report is available at a Web site called Palestine Development InfoNet (PDIN), maintained at McGill University by Canada’s Interuniversity Consortium for Arab Studies. The site gets financial support from the World Bank. The web address is: http://www.arts.mcgill.ca/MEPP/PDIN/pdfront.html. Future UNSCO reports will be available at the same site.

The PDIN is a good central location for information on development aid and reconstruction in the West Bank and Gaza. It’s designed for use by professionals policymakers, scholars, and NGOs but anybody curious about the Palestinian Territories can find loads of information here.

The site will give you an overview of the scope and structure of the international assistance effort in the West Bank and Gaza, a listing of the Palestinian Authority ministries along with contact lists and information on investment and business law in the West Bank and Gaza. You also can link to other Web sites with information on donor programs, NGOs, and the Middle East peace process. Want information on upcoming conferences on Palestinian economic development? You can get it here. And if you want to talk about all this, there are discussion forums.

Finally, there’s a link to the Palestine Economic Forum, another World Bank-supported site currently in experimental form, with material from the Arab Economists Association and others.

PDIN site coordinator is McGill University political scientist Rex Brynen, who can be reached at (514) 398-5075. The full title of the UNSCO report is the Quarterly Report on Economic and Social Conditions and Trends in the West Bank and Gaza Strip.