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World Bank: Gaza economy on ‘verge of collapse’

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Jerusalem:  Gaza’s economy is on the “verge of collapse,” a new World Bank report warned today, saying the unemployment rate there is now the highest in the world and calling on Israel and international donors to remedy the situation.

It charged that “blockades, war and poor governance have strangled” the economy of the Gaza Strip, ruled by the Islamic militant group Hamas.

The report said Gaza’s GDP would have been four times higher if not for conflicts and restrictions, including a blockade in place since 2007.

Israel and Egypt imposed the blockade on Gaza after Hamas violently seized the territory from forces loyal to the Western-backed Palestinian President Mahmoud Abbas.

Israel says the blockade is necessary to prevent Hamas from getting weapons and building militant infrastructure, while critics say it amounts to collective punishment.

Since its takeover, Hamas has fought three wars with Israel, including 50 days of fighting last summer in which thousands of Gaza buildings were either destroyed or damaged.

Over 2,200 Palestinians, including hundreds of civilians, were killed during the war. On the Israeli side, 67 soldiers and six civilians were killed.

The report said Gaza’s economy was badly hurt as a result of the fighting, especially the agriculture, construction, manufacturing and electricity sectors.

It said about 43 per cent of Gaza’s 1.8 million residents are unemployed; a figure it said is the highest in the world. Youth unemployment reached about 60 percent by the end of last year, it said.

“The current market in Gaza is not able to offer jobs leaving a large population in despair particularly the youth,” Steen Lau Jorgensen, World Bank country director for the West Bank and Gaza, said in the report.

“The ongoing blockade and the 2014 war have taken a toll on Gaza’s economy and people’s livelihoods.”

The report warned that the “status quo in Gaza is unsustainable.” It said the coastal territory’s recovery depends on an easing of the blockade and on donor countries honoring their pledges made at an international conference in Cairo after last year’s war.

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