The United Nations' trade and development agency (UNCTAD) warned that the Palestinian economy was declining dramatically, leading to a worsening this year of already high unemployment and poverty levels in the West Bank and Gaza.
"The economy of the occupied Palestinian territory is on the verge of collapse," the U.N. Conference on Trade and Development said, adding that "projections indicate economic decline to levels not seen for a generation."
"Projections point to unprecedented unemployment, poverty and social tensions," the agency said. "Added to this has been a weakening of the Palestinian government's managerial and technical capacities."
UNCTAD said the economic crisis was being compounded by decreasing levels of aid from foreign governments and institutions since the militant group Hamas swept January parliamentary elections. Western nations and Israel have been withholding hundreds of millions of dollars from the Hamas-led government.
The economy, according to one scenario outlined in the report, could be 35 percent lower by the end of 2007 compared with last year. While economic crisis has affected all Palestinians, it has hit especially hard in Gaza. The International Red Cross, in a statement Tuesday, said an estimated two-thirds of Gaza's residents were living below the poverty line of $2 (1.60 euros) a day.
[Associated Press]
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