'Gaza's industry has stagnated rapidly'

The Palestinian economist Mohamed Meddad Gaza – Mohammad Habib The Palestinian economist Mohamed Meddad said that the Palestinian economy will improve if the division between the West Bank and the Gaza Strip ends and the reconciliation agreement is implemented on the ground. He pointed out that Arab and foreign countries will could deal with the Palestinians in a better manner in this case, particularly in regards to the reconstruction of Gaza. Mekdad said in an interview with Arabstoday: "The real reconciliation will have a positive impact on the Palestinian economy, and Gaza will be linked to the West Bank after many years of economic separation". He added that Palestinian economic unity will contribute to the restoration of the economy, as it was before the blockade on Gaza. Mekdad clarified that reconciliation will affect subsidies and aid provided to the Palestinian Authority (PA), as the US and Europe will put pressure on the PA financialy. He pointed out that US would be able to impede the arrival of any Arab subsidies to the West Bank if it wished to punish the Palestinians for their unity, as transfer of aid is an international decision and only happens through American banks. On another topic, Mekdad said that the industrial stagnation in Gaza has reached an unprecedented rate of 90 percent in comparison to what it was before the Israeli blockade on Gaza and before the Israeli war on Gaza in 2008. He considered the industrial crisis a political crisis which may be resolved through political ways. He stressed the necessity of attempting to make international and Arab economic agreements to replace the Paris one and to disengage the Palestinian economy from being subjugated to the Israeli economy. Mekdad highlighted the importance of the Palestinian integration into the global economy based on valid grounds, through awareness sp as not to be exposed to the crises previously experienced by Asian states, and to seek to build a technological base in order to create a competitive advantage and benefit from the information and communication revolution. He said: “Israel tried hard during the occupation, using all means and methods, to link the Palestinian national economy with the Israeli one and making it a follower, in a way that is of a servant to a master. It looted the wealth of the Palestinian people, beginning with the occupation then confiscation of their land in the form of settlements, looting their water and wealth, then subjecting them to oppressive policies and laws in the fields of trade.” He continuted by saying that: "the PA, after coming to power in 1994, was in dire need to reconstruction. Then came the blessed Intifada in 2000 and Israel ignored the remaining agreements, the blockade got tighter so the suffering of the Palestinians increased day by day until it was crowned with the siege of Gaza, then the war on Gaza in 2008 which destroyed everything, so the rate of the industrial stagnation has exceeded 95 percent". Mekdad said that he expects a new economic crisis, especially after the wage issue, as the PA lacks sources of financing and depends on external aid and grants. He aded that the economy in the West Bank is on a downward spiral and local financing dependence is adding to the PA's woes. Mekdad said that the Arab countries are part of the international system and will not be able to help the Palestinians or take a decision of the reconstruction of Gaza except if exposed to popular pressures. However, he noted that the countries that have money have no significant popular pressure, believing that it is likely that this issue will remain open. He pointed out that the solution of the problems facing the industrial and agricultural sectors in Gaza, is to open the door for exports to the West Bank and the world freely and without restrictions or preconditions. He explained that exports are a strategic option for development and growth in the entire world, as the exports reflect a double rate on the GDP, and can raise the standard of living. He added that exports creates job opportunities, reform deficits in the balance of payments, attracts local and foreign investment, and hence achieves high growth rates.