Jobless numbers in Gaza among highest in the world as analysts warn of unsustainable 'boom' in West Bank

The construction boom in the West Bank, along with the frequent opening of new bars and restaurants in Ramallah, its main city, have been hailed as illustrations of the nascent state of Palestine's burgeoning economy.

In Gaza, some expected the loosening of the Israeli economic stranglehold a year ago to herald a revival of the tiny territory's devastated private sector.

But two reports in the past week by the United Nations paint a dismal picture of continued high unemployment, particularly among the refugee population.

In Gaza, UNRWA (the UN agency for Palestinian refugees) found that the unemployment rate for the second half of 2010 was 45.2% - one of the highest in the world. In the first half of 2010, the rate dropped to 42%, after having risen to 45.7% in the previous six months following the easing of the blockade.

More than 8,000 jobs were lost in private businesses, leading to an 8% fall in the employment rate in the private sector compared to the previous six months.

In contrast, public sector employment – the sector dominated by the de facto government, Hamas – grew by nearly 3% over the same period.

Hundreds of thousands of Gaza families are dependent on salaries paid by Hamas, a fact unlikely to weaken the Islamist organisation's standing regardless of the popularity - or otherwise – of its ideology.

Despite the loosening of the blockade last June to allow the free import of consumer goods, Gaza's private sector is still struggling. The ban on exports, apart from relatively few shipments of flowers and strawberries, has made recovery almost impossible. Some businesses have reported that raw materials are still hard to obtain.

Chris Gunness, UNRWA's spokesman, says this in the press release accompanying the report:

"It is hard to understand the logic of a man-made policy which deliberately impoverishes so many and condemns hundreds of thousands of potentially productive people to a life of destitution… If the aim of [Israel's] blockade policy was to weaken the Hamas administration, the public employment numbers suggest this has failed."

In the West Bank, unemployment in the second half of 2010 was 25%, compared with 23.6% for the same period the year before. The average wage - $667 per month – was down 2.61%.

Many economic analysts have warned that the West Bank's "boom" is based on international donor funding, rather than real sustainable growth. Prime Minister Salam Fayyad says any economic recovery is at risk without progress on a political solution to the Israeli-Palestinian conflict.

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