The Booming Palestinian Economy

The Coordinator of the Israeli Government Activities in the Territories (or COGAT) is a unit in the Israeli Ministry of Defense that deals in coordinating civilian issues between the Government of Israel, the Israel Defense Forces and the Palestinians.

If we look at much of the economic data that is available from COGAT, we see an economic boom that must be the envy of the world.

• The Palestinian national product: A 5.6% increase in the first quarter of 2009 compared with the corresponding quarter last year, and a 5.4% increase in the second quarter of 2009, compared with the corresponding quarter in 2008.

• Unemployment in the West Bank: A drop from 19% in the first quarter of 2008 to 17.7% in the first quarter of this year. A drop from 18.2% unemployment in the second quarter of 2008 to 16.4% in the second quarter of 2009.

• Unemployment in the Gaza Strip: A drop from 45.5% in the second quarter of 2008 to 36% in the second quarter of 2009.

• Growth: In an interview with WP and Newsweek in October, Fayyad related to "8% growth in 2009, if not more," and described the growth as "very good." Special Quartet envoy Tony Blair mentioned the possibility of a double-digit growth rate in 2009.

• Stock market: A 12.5% rise since the beginning of the year.

• Foreign investments in the West Bank: A six-fold increase (!) compared with the corresponding period last year, as a result of the economic conferences that were held in Bethlehem and Nablus, and of the improved security in the area (this figure was provided by the Palestinians and the Joint Economic Conference held on September 2).

• Truck traffic between Israel and Judea and Samaria: A 41% increase in the first half of 2009 compared with the corresponding period last year. There was a 22% increase in the crossing of goods into the Gaza Strip between September and October, and an additional 14% increase from October to November (source of data: COGAT).

• Palestinian sales to Israel: From 2007 to 2008 there was a 6.8% increase, from $530 million to $566 million. In the first quarter of 2009, there was an 8% increase, from $136 million to $147 million (source: Central Bureau of Statistics).

• Palestinian purchases from Israel: From 2007 to 2008 there was a 25% increase, from $2.6 billion to $3.25 billion. In the first quarter of 2009, there was a decrease of 9.5% compared with the corresponding quarter in 2008, from $796 million to $720 million (source: Central Bureau of Statistics).

• General Palestinian foreign trade (including with Israel): Imports in 2008 totaled $3.7 billion, of which 72% was from Israel. This is a 20% increase compared with 2007. Imports in 2008 increased by 3%, and reached $529 million. The PA’s total trade in 2008 was $4.3 billion  a 17% increase compared with 2007.

• Energy: There was a 29% increase in gasoline consumption and a 7.6% increase in diesel fuel consumption in the first half of 2009, compared with the corresponding period last year (source: COGAT).

• Imports of cement: In the first half of 2009 alone, 18% more cement was imported than in all of 2008 (source: COGAT).

• Vehicle purchases: There was a 44% increase.

• Tourism: In 2008 there was a 93% increase in the number of tourists in the Bethlehem area (about one million tourists), and a 31% increase in the Jericho area (about half a million tourists). The number of hotel stays in the third quarter of 2009 was 136,000  a 42% increase compared with the corresponding quarter last year.

Even in Gaza, the so-called "humanitarian crisis" is being overplayed by the media with the encouragement of Hamas

Marc Otte, European Union emissary to the Middle East, to the working group for Middle East affairs in the European Parliament said on November 24:
- There has been an economic improvement in the West Bank, primarily due to removal of the checkpoints.
- There is no shortage of equipment or cement for construction in Gaza, and Hamas is controlling the resources.
- - Hamas dismissed employees of the systems and appointed its own people, and that is the reason that there is no construction in Gaza.
- The prevailing economy in Gaza is not an official economy but rather an economy of tunnels; there are no shortages in Gaza, but there is a problem of unemployment, primarily for civilians who are not close to Hamas and have no buying power.
- The security fence has proven its effectiveness in the fight against terrorism.

· Before, during and after the Gaza Operation, Israel acted to enable the entrance of humanitarian aid into the Gaza Strip. Israel ensured the orderly operation of the electricity, communications and water infrastructures, including bringing in equipment and repair teams to repair water and sewer facilities during the operation, and to repair turbines and parts of the Gaza power station after the operation, including a two-month stay by a Siemens team, which conducted repairs and maintenance work at the power station, etc.

· Supply of gasoline: In August, Israel renewed the supply of gasoline for private use, according to the standard determined by the High Court of Justice as the threshold sufficient for humanitarian needs. While the minimum quotas determined by the High Court of Justice are only partially filled because of the debts owed by the gas stations in Gaza to the Palestinian Authority, a decision was made in the summer by the Coordinator to meet the threshold set by the High Court of Justice: 800,000 liters of diesel fuel and 75,400 liters of gasoline per week are approved for transfer as the minimum for use for private transportation.

· Supply of cooking gas: In general, cooking gas has been transferred to the Gaza Strip without restriction before, during and, of course, after the operation. Due to security reasons which jeopardize the continued operation of the terminal, Israel was recently compelled to reduce to a minimum the operation of the gas terminal at Nahal Oz depot and, for that purpose, an alternative was built for the transfer of cooking gas at Kerem Shalom. To some extent, this reduced the ability to transfer cooking gas to the Gaza Strip, and now action is being taken to increase the capacity at Kerem Shalom for a quick solution to the problem. As a rule, the transfer of the gas is coordinated with the Palestinian Fuel Administration Authority in Ramallah. The Authority pays for the transferred fuel (by means of tax offset) and is responsible for collecting the money from the gas stations in the Gaza Strip.

· Diesel fuel for the power station: The transfer of 2.2 million liters a week (financed by the European Union) continues. It is important to note that the flow of diesel fuel to the power station took place throughout and after the operation.