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Palestine: Industry Incurs $550 Million Losses
By Abdul-Ghani Al-Shami
04/01/2001
A Palestinian official report asserts that the Palestinian industrial sector incurred $550 million losses due to Israel’s bombardment and assaults, closure of checkpoints as well as siege of cities.
The Palestinian Ministry of Industry, which prepared the report, divided the harm and losses into four main categories – current losses, additional losses, national wealth losses and lost opportunities. The current losses amounted to $203 million ($3.76 million daily), while those of national wealth reached $9.5 million. Emergency additional losses reached $1.5 million and lost opportunities $336 million.
80% Decrease in Production
Regarding the current losses, the report indicates that the industrial sector witnessed a retreat during the period from September 28, 2000 to November 20, 2000 by a rate of 80%.
Rate of production in the sectors of stone, marble and the construction industry plummeted by 90%. Foodstuffs fell by 60%, garments and yarn by 85%, shoes and leather by 90%, chemical and pharmaceutical industries by 65%, furniture and wood by 80%, mechanical and engineering industries by 60%, plastic industries by 70% and paper industries by 75%. As the decrease in the rate of industrial production hits 80%, the current direct losses, incurred in the industrial sector, stand at $3.76 million daily.
The report discusses losses incurred by national wealth, pointing to the total and partial destruction of factories, which include scores of industrial establishments in the West Bank and Gaza Strip at a value of $9.5 million. The additional losses were incurred because goods and raw materials were detained in Israeli ports, including 2800 containers. As a result, charges were paid for the Israeli ports, $1.5 million of which were the share of the industrial sector.
The report points out that there was another kind of loss – lost opportunities. It resulted from money spent to encourage investment in the industrial sector. It advocated the need to set aside new sums and budgets for new programs to encourage investment and go back to pre-uprising conditions.
$336 Million Expected Losses
The ministry affirmed that the impact of the losses incurred by the industrial sector would extend for three years to come at least. They would be reflected directly in a remarkable decrease in the expected growth rate of the industrial sector at a rate not less than 80% of the current rate. This means that the industrial sector will lose $336 million in the coming three years, as the annual increase in the industrial sector’s contribution to the GDP exceeds $100 million. The ministry pointed out that the Palestinian economy underwent difficult conditions during the past weeks, as a full siege was imposed on the West Bank and Gaza Strip and all checkpoints between the Palestinian territories and other areas were closed down.
75% of Raw Materials Besieged
The industrial sector witnessed a big retreat because more than 75% of raw materials for factories are imported from abroad or Israel, said the report. Besides, laborers were unable to go to work due to the siege. The volume of sales plummeted largely on the domestic and foreign markets (exports). Factories were unable to meet orders of foreign exports. Moreover, laborers were unable to go to work whether in the territories occupied in 1948 or in other parts of Palestine. This clearly affected the citizens’ purchasing power.
According to the report, the industrial sector has afflicted harm since the beginning of the closure, including banning the import of raw materials and any exports, cutting the electricity partially and repeatedly, and undermining laborers inside the industrial zones. All this was done despite the fact that there is an agreement with the Israeli side not to subject the industrial zones to closure in any form.
The report says that the siege imposed on the Palestinian cities precluded laborers from going to their work, undermined inter-Palestinian city trade and caused harm to the private sector, as it lost investment opportunities.
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