Israeli curbs threaten US plan for Palestine economy: ILO

A $4.0-billion US plan to boost the Palestinian economy will likely falter if Israel does not lift a wide range of restrictions strangling economic growth in the occupied territories, the UN’s labour organisation warned Thursday.

“If that $4.0 billion flows in and meets all the security-driven restrictions, you will not get the proper result,” cautioned Kari Tapiola, a special advisor to International Labour Organization chief Guy Ryder.

He was referring to a plan unveiled last month by US Secretary of State John Kerry to attract the mammoth sum in private investments.

Kerry, who next week will make his fifth visit to the region since taking office in February, said the plan could help swell the Palestinian economy by as much as 50 percent over the next three years and bring down its devastatingly high unemployment figures.

Tapiola told reporters that for the plan “to give some kind of credible result, you have to undo these restrictions.”

The restrictions and resulting dire economic situation in the Palestinians territories were also threatening prospects of a satisfying long-term solution, he warned as he presented the ILO’s annual report on the situation of workers in the occupied territories.

“If this double weight of the occupation and the settlement economy continues to constrain efforts at growth of the Palestinian economy, the belief in two states for two people will be seriously jeopardised,” Tapiola explained.

The report pointed out that Palestinian businesses face Israeli-imposed limitations on access to land, water and markets, while Palestinians seeking to work in Israel need hard-won security clearance and often spend hours each day at check-points.

“There are tens of thousands of discouraged workers and actual or would-be entrepreneurs who urgently need to know that their interests … can and will be restored and reinforced,” the report said.

While ILO has long lamented the stagnation of the Palestinian labour market, it stressed Thursday that the already bleak situation risked drastic deterioration.

Israel, Ryder said in a statement, needed “not only to relax the application of restrictions on people and businesses but to lift them altogether, thus enabling the Palestinian economy to grow and generate decent jobs.”

Thursday’s report was ILO’s first since Israel decided to temporarily freeze tax revenues it collects on behalf of the Palestinian Authority in retaliation for the Palestinians winning upgraded UN status late last year.

This move, along with many donors’ failure to make good on promised funds, had worsened a situation already weakened by years of Israeli restrictions, ILO said.

“As often happens, a fiscal crisis is turning into an economic and social crisis,” Tapiola warned.

The Palestinian economy faces soaring unemployment, with the number of jobless Palestinians rising by 15.3 percent between 2011 and 2012 to reach 23 percent, the UN agency said.

The situation is especially dire in Gaza, where unemployment stands at 31 percent, and a staggering 50 percent among women.