A new World Bank report has warned that the Gaza Strip's 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.
Gaza’s 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 Gaza’s 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 Gaza’s 1.8 million residents are unemployed, with youth unemployment soaring to 60 per cent. Nearly 80 per cent of Gaza’s 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 Gaza’s economy and people’s livelihoods. The economy cannot survive without being connected to the outside world.”
The report also criticised the sluggish pace of reconstruction and aid to Gaza since last year’s conflict, noting that just 27.5 per cent, or nearly $1 billion, has been disbursed so far.
The report concluded that the “status quo in Gaza is unsustainable”, stressing that recovery depends on the easing of the blockade and on donor countries honouring their pledges made at an international conference in Cairo after last year’s war.
Meanwhile, the Jordanian daily Ad-Dustour reports that Israel and Hamas are holding secret talks to construct a floating port between Turkish Cyprus and the Gaza coast.
The report, quoting unnamed western diplomats, said that the port would allow goods to be transferred to Gaza after inspection by Turkish authorities.
The two sides were also reported to have discussed the idea of expanding Gazan territory into Egypt’s Sinai peninsula, indicating an Egyptian input into the discussions.
Both Israel and Palestinian Authority officials denied the report, which claimed direct talks had taken place in a number of European countries.
Despite the denials, Israel's new justice minister Ayelet Shaked, from the far-right Jewish Home party, called the idea of a floating port both "reasonable and feasible".
As part of conditions for a ceasefire during the 2014 war between Israel and Hamas, the Gaza group demanded a deep-sea port, which was categorically refused by Israel.
