WASHINGTON, May 23 (UPI) -- Palestinian émigrés around the world have shown their talent for business and hard work over the decades, but those remaining in the West Bank and Gaza, talent or not, face harsh prospects in a devastated economy.
Yet as Israel and the Palestinian Authority begin to once again build a potential bridge to peace, among other key issues is how the West Bank and Gaza can rebuild themselves. Under the terms of the so-called "road map," an agreement negotiated between the parties will result in the emergence of "an independent, democratic and viable Palestinian state living side by side in peace and security with Israel and its other neighbors," the United Nations notes on its Web site.
In the case of economics, it is the word "viable" which is the operational term for the 3.2 million Palestinians residing in the West Bank and Gaza.
The Levantine region that includes the state of Israel and the fluctuating territories that constitute Palestine –- never, perhaps, the most prosperous of regions to begin with –- have suffered a variety of economic ills since the formation of Israel, primarily brought on by endless geopolitical strife since the late 1940s.
Israel has had its own economic problems but for its neighbor and often enemy, the Palestinian territories, the economic problems have always been more profound.
In the case of the West Bank and Gaza, always an economic underdog compared to Israel, there was, however, something of an economic renaissance starting in 1996 during the post-Oslo peace accords era. This economic rebirth came to a screeching halt when the Palestinian uprising began in 2000.
While not so much in Gaza, the evidence of economic momentum post-Oslo was obvious in the West Bank, where there was a steady building boom in Palestinian cities such as Ramallah, with new buildings and satellite dishes dotting the horizon, and roads going in by the day.
Although the Palestinian economic performance was uneven in the post-Oslo years, and described by the World Bank as "modest at best" compared to some expectations, it was still going forward.
That has changed.
For the last two years, Ramallah and other Palestinian cities and towns have become war zones, as the Israelis have reacted to a seemingly endless spree of deadly suicide bombings in their cities and towns.
The ongoing political instability –- at best a euphemism -– between the Israelis and the Palestinians, along with economic sanctions imposed by the Israelis, have reduced the economy of the Palestinian territories to one of almost zero activity and mass unemployment.
According to the Palestinian Trade Center, of the 232 Palestinian companies, which were engaged in export activities before the 2000 intifada, only 46 still export regularly.
Prior to the 2000 outbreak of hostilities, an estimated 120,000 Palestinians went to work in Israel, while 500,000 Palestinians worked in the territories. The numbers of those actively employed keeps fluctuating, depending on border closures between Israel and the territories and limitations of movement within the West Bank and Gaza.
Blaming various Israeli measures, Palestinian Labor Minister Ghassan al-Khatib said at the end of last year that strife had "increased the unemployment rate to 70 percent in the territories (West Bank and Gaza) and made more than half the population live below the poverty line."
World Bank estimates are that before the September 2000 uprising, unemployment was hovering below 10 percent in the Palestinian territories.
In particular, limiting Palestinian worker passage to Israel has damaged the territorial economy because of the much higher wages earned by Palestinians in Israel which are then spent on goods and services back home, helping the economy.
Gross domestic product in the territories, is estimated by the CIA World Factbook at $2.1 billion (purchasing power parity), the year the ongoing uprising started. The World Bank notes that GDP fell 6 percent for that year and by an additional 12 percent in 2001.
Per capita income plummeted by 10 percent in 2000 and another 19 percent in 2001.
Political and the economic issues are inextricably intertwined in the region.
Provided that hostilities can be quelled, it would seem the only economic path for the West Bank and Gaza is upward, as in a crashed stock market. It is hard to get any lower.
