The Palestinian economy is heading for a further slowdown in growth and a spike in unemployment just as it faces a “high risk” of continuing social unrest, according to the International Monetary Fund.
The conclusions of the most recent IMF fact-finding mission make alarming reading both for Palestinian leaders and western governments amid growing concern over the viability of the Palestinian Authority and with peace talks with Israel frozen.
The past weeks have seen a sharp rise in social unrest across the West Bank, with demonstrators taking to the streets to protest against fuel price hikes, tax increases and a broader decline in living conditions. Salam Fayyad, the western-backed prime minister of the Palestinian Authority, has been the main target of protester anger and has faced calls for his resignation.
Oussama Kanaan, IMF mission chief for the West Bank and Gaza, said the PA’s problems stemmed largely from the continuing curbs on Palestinian trade imposed by Israel and by the sharp fall in donor money, especially from the Arab world. “The PA is viable, because the institutions are there. The capacity to manage the budget is there. The two things required now are for the Palestinians to have better access to external markets and – for a transitional period – more aid.” more (subscription may be required)
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