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U.N. Envoy Warns Of Palestinian Economic Crisis
WASHINGTON & GAZA CITY, Feb 13 (IslamOnline & News Agencies) - The Palestinian Authority is on the verge of financial collapse, said a United Nations official citing the Palestinian economy, which suffered losses of $1.15 billion during the first four months of the latest uprising against Israel.
U.N. Middle East envoy Terje Roed-Larsen on Tuesday urged Israel to ease its crippling sanctions against the Palestinians that he said has cost their economy more than a billion dollars.
"The closure policy has been colossally counterproductive: detrimental to Israel's legitimate security interests and very damaging to the Palestinian economy and society," he said in a report.
Roed-Larsen also urged both sides to exercise "maximum restraint and caution" in the days and weeks ahead, describing the situation as "very volatile."
"At this stage, violence would only produce a 'lose-lose' situation," he said, saying Israel and the Palestinians should resume dialogue as soon as possible.
Violence has escalated sharply since the election as prime minister a week ago of Israeli hardliner Ariel Sharon, who is reviled by Palestinians, with six people killed in as many days.
"We are now facing a crisis on many levels," Larsen said to CNN. "The most important issue right now is that if key Palestinian institutions ... collapse because of lack of funding, it will very easily enhance a situation which may be characterized by chaos and anarchy, which would be the greatest threat in my opinion to security for Palestinians and Israelis alike," he adds.
A total of 402 people have been killed since the violence first erupted, most of them Palestinians.
The Palestinian economy suffered a total of $1.15 billion in losses - or about $11 million a day - in terms of gross domestic product and labor income in the four months to the end of January, 20% of the projected Palestinian GDP (Gross Domestic Product) for 2000, he said.
Israel has imposed harsh economic sanctions against the Palestinians in an effort to contain the revolt, blocking roads connecting Palestinian-run towns and cities and denying workers entry into Israel.
Larsen said revenue losses are the result of confrontations, mobility restrictions and border closures that have occurred since Palestinian-Israeli violence spiraled upward at the end of September.
"Living conditions are also deteriorating. We have a situation where we have 38% unemployment and over 30% of the population are under the poverty level, earning less than $2 a day," said Larsen.
The report said 250,000 people in the occupied territories, or 38% of the workforce, were now without jobs.
Roed-Larsen also called on the Israeli government to transfer tax and customs revenues owed to the Palestinians as a matter of urgency, warning that Palestinian leader Yasser Arafat's self-rule authority was facing "an impending fiscal crisis."
"Security cannot be built on uncertainty, peace cannot be built on anger," he added.
Roed-Larsen said the Palestinian Authority's fiscal situation should be at the top of the international community's agenda and that he would travel to several world capitals and visit World Bank and International Monetary Fund officials to raise awareness of the urgency of the issue.
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