The political morass in the Palestinian world is paralleled by a catastrophic economic situation, especially in the Gaza Strip, which seems set to continue. A recent World Bank report on poverty in Palestine highlighted the importance of donor aid to the alleged successes of the Fayyad government.
In 2009, at least one fifth of the population was still poverty-stricken – 16 percent in the West Bank compared with 23 percent four years earlier, and in the Gaza Strip the comparative figures were 34 percent and 30 percent respectively. The Palestinian Central Bureau of Statistics suggested that, in 2010, 18 percent of the population in the West Bank lived in poverty and 38 percent of Gazitans were in the same state.
Indigenous economic activity has been in constant decline. Between 2000 and 2009, there was a decrease in private sector growth and de-industrialisation in manufacturing and agriculture. Wages fell by 25 percent for those with secondary school education and by up to 45 percent for illiterate workers. The main cause was the loss of employment opportunities in Israel itself and in the settlements after the Second Intifada at the start of the last decade.
Unemployment remains high, although it has declined in the West Bank, standing at 16 percent in the first half of 2011, although youth unemployment is far higher at 26 percent. In the Gaza Strip, unemployment has been running at 28 percent, with youth unemployment at 38 percent, although the opening of the border with Egypt and the massive tunnel trade across the Egyptian border have stimulated construction.
