oPt

An economic snapshot of Palestine and the PRDP

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By Nadia W. Awad for MIFTAH

October 28, 2008

Basic Information:

Gross Domestic Product (GDP): Defined as the total market value of all final goods and services produced within the country in a given period of time (usually a calendar year).

  • Real GDP in 2007: $3901 million
  • GDP per capita in 2007: $1130
  • GDP real growth rates have dropped by 8.38% since the peak of 1999.
Annual Population Growth Rate: The annual population growth rate is 4%, one of the highest in the world.

Unemployment : In 2007, just over 45% of Gaza's work force was unemployed while in the West Bank, unemployment stood at 25.5% of the workforce.

Poverty: The official and deep poverty lines for a six-person household (two adults and four children) in the West Bank and Gaza at $572 and $457 in monthly expenditures respectively for 2007.

  • Palestinians living in official poverty in the West Bank: 19.1% in 2007.
  • Palestinians living in official poverty in Gaza: 51.8% in 2007.
  • Palestinians living in the West Bank in deep poverty: 9.7% in 2007
  • Palestinians living in Gaza in deep poverty: 35% in 2007
Private Sector Investment (West Bank and Gaza combined)
  • Private investment in 2006 stood at about $665 million.
  • There is no data to suggest private sector investment rose in 2007.
  • This is 11.3% below the 2005 level, and less than half of the 1999 level.
Public Sector Investment (Government capital expenditures)

In 2007, public investment was USD 306 million, all of it financed by donors, and much lower than rates in the late 1990's.

Consumer Price Index: The overall Consumer Price Index (CPI) for the Palestinian Territory with its 2004 base year (2004=100) reached 124.19 in September 2008, and increased by 10.91% compared to September 2007. In the first nine months of 2008, the average increase of prices was 10.52% compared to the corresponding period of year 2007. The percent change in the CPI is a measure of inflation.

Miscellaneous

  • Manufacturing equipment is on average 12 years old.
  • Restrictions on Gaza have led to the suspension of 95% of Gaza's industrial operations.
The Paris Donor Conference

On December 17, 2007, ninety countries and organizations met at a conference in Paris to help raise and pledge funds to support the ailing Palestinian Authority over the next three years. Advised and supported by the World Bank and DFID, amongst others, Palestinian Prime Minister Salam Fayyad presented a plan of reform, the Palestinian Reform and Development Plan (PRDP), which the government is using to guide the Palestinian economy from 2008 till 2010.

Approximately 90 delegations attended the Conference, including key political players in the peace process. Arab and Middle Eastern countries, the G8, the 27 EU Member States, major emerging countries (India, China, etc.), the European Commission, international and regional financial institutions (IMF, World Bank, OPEC Fund, Arab Monetary Fund, Islamic Development Bank, etc.), and United Nations members all attended. Speaking at the Conference, President Abbas said he hoped to collect US$ 5.9 million. These funds would be used to establish and run development projects in Palestinian controlled areas over the coming three years, and in essence, to finance the PRDP. By the conclusion of the Conference, donor countries had generously pledged $7.7 billion in funds to support Palestinian institution-building and economic recovery. Of this amount, $3.4 billion was pledged for 2008. This amount included humanitarian assistance to help with the essentials of the daily lives of the Palestinian population, especially in Gaza. The tables below explain who gave how much.