The pandemic's toll on Gaza's economic sectors

Pal-Think for Strategic Studies continues carrying out the episodes of the radio programme “Gaza in the face of Corona” within the project “Gaza in the face of Corona”, funded by the Atlas institution — hosting the researcher and specialist in economic affairs Dr Raed Hilles, to speak on the repercussions of the coronavirus pandemic on the economic sectors in Gaza, in the programme's second episode.

At the beginning, Hilles described the coronavirus pandemic as the severest shock the Palestinian economy has been subjected to — especially as it was suffering from several crises before the disease's spread inside the Palestinian territories. He made clear that the economic repercussions of the crisis were embodied in the manner of facing it: Palestine, like other states, took the course of applying the preventive measures, most prominently the curfew and the closure of all the crowded places in which the policies of social distancing are difficult to apply, such as the institutions, the commercial shops, and the popular markets — declaring the state of emergency since the first of last March, accordingly preventing movement and travel between the governorates and stopping the religious rites and the educational institutions.

He affirmed that Palestine does not possess the economic elements and financial resources that would enable it to continue long in these measures, and therefore it incurred great economic losses, which the Palestinian government estimated at three billion US dollars. As for the Palestinian Central Bureau of Statistics, it expected the Palestinian economy to contract by 14%, while the World Bank expected the Palestinian economy to contract by some 7.6% in the case of a gradual return of movement and economic activity — but should the closure scenario continue, it will contract by 11%.

He added that the crisis's impact was severer on the economic sectors in the Gaza Strip as a result of the blockade continuing for 14 years, in tandem with the internal Palestinian division — and this contributed to the retreat of most of its economic indicators: with poverty rates that reached 53% and unemployment rates of 52%, the highest worldwide; the unemployment rate reached 70% for the youth category; alongside that, 72% of the Gaza Strip's inhabitants suffer from food insecurity, not to mention that 80% of them receive relief help from the various bodies. All this confirms the fragility of the economy in Gaza before the corona crisis. He qualified that the world's preoccupation with facing Corona and the damage to the donor states' economies will affect negatively the volume of the help the Gaza Strip receives, and accordingly will affect the wheel of the economy negatively.

Dr Raed Hilles pointed out that these closures led to the collapse and damage of most of the economic sectors — such as the tourism sector and the services tied to it, which was the most damaged of the sectors; the agricultural sector, with the farmers' inability to go to their lands and harvest what they had planted and the weakness of their marketing of the crop or its export; the industrial-construction sector, because the citizens' purchasing power weakened as a result of the closures that reached their sources of livelihood, alongside the citizens' turn to buying sterilisers and preventive products; and accordingly the damage to the sector of internal trade between the governorates; and the transport sector was disabled as a result of the stoppage of the movement of employees, students, and citizens in adherence to the measures and closures; and the educational sector — the private specifically — and the services tied to the educational process.

The researcher and specialist in economic affairs mentioned that the number of workers harmed by the coronavirus pandemic registered with the Ministry of Labour reached 158 thousand workers, added to the high proportion of those out of work — bringing the rate to the highest that can be reached in the Gaza Strip, and it will work to widen the circle of poverty more and more. He noted that the return to natural life will add new economic burdens on the various sectors in order to apply the safety conditions and the criteria of social distancing between the workers, employees, and recipients of services from these sectors.

As for the economic sectors that benefited from the crisis, he said the clothing sector and the sewing and textile factories were among the sectors that benefited most, with the increase of demand for masks and protective clothing — so the number of workers in this sector grew by some 3,000 workers, and there came to be production exported to “Israel” and to the West Bank, in addition to meeting the market's need in the Gaza Strip. And the sector of chemical industries and medicines witnessed a revival as a result of the increased demand for detergents, sterilisers, sanitary tools, and soap and the citizens' turnout for them. As for the food industries, some products witnessed a turning-away and others witnessed currency, especially the storable products.

The encounter concluded with the mention of the interventions carried out by the government and international bodies in order to ease the effects consequent on the damaged economic sectors — recommending focus on the file of compensation and material help for the harmed Palestinian workers and the relief of them and their families, on the pattern of the “Waqfet Izz” fund; with the encouragement of businessmen and the owners of companies and factories to present financial help, because the citizen will return these funds to the market and will contribute to restoring movement to the economic cycle — this will return benefit, with its economic reverberations, upon the presenters of the help.

He likewise affirmed that the government bodies are called on to present help to the damaged sectors, especially the owners of medium, small, and micro enterprises — because their elements of steadfastness are simple and they have a fundamental role in moving the wheel of the Palestinian economy; and the government must likewise present facilitations to the economic sectors during their return to economic movement, and provide exemptions from licences and customs fees as compensation for the losses they sustained during the crisis.