A World Bank report released on Monday called for the opening of the Rafah crossing between the Gaza Strip and Egypt to exports and imports to try to stem the Palestinian territory‘s economic collapse.
The report puts forth a gradual plan for the reopening of the crossing for the passage of goods, beginning with exports and later on adding import into the Gaza Strip.
The report says that time and cost effiency should play a major role in the planning of logistics and security arrangements, since the Rafah crossing must not only serve as an outlet for goods and a port for the entry of supplies into the Gaza Strip, but function as a major leverage for the failing Palestinian economy.
According to the report, ‘only by accessing [Arab and European] markets directly and making full use of the generous trade agreements provided to the West Bank and Gaza by Europe and the Arab League, will Palestinian producers capture enough value-added to grow the economy even if the borders with Israel become more efficient and transparent.‘
In order to allay Israeli and Egyptian security concerns without compromising the cost efficiency of the procedure, the World Bank proposes security arrangements that ‘would be based on using risk analysis to maximize detection while minimizing physical inspection.‘
Israel says the Gaza-Egypt border is a major transit point for militants and weapons. It has frequently closed Rafah, limiting its use only for the passage of travelers citing security concerns.
Terror groups have intensified the smuggling of arms and gunmen through Rafah since Israel‘s withdrawal from the Gaza Strip in August 2005. Most smugglings take place through tunnels, regularly dug and maintained by locals.
Virtually all trade with Gaza is restricted to the Karni crossing with Israel. Limited operating hours at Karni and Israel‘s frequent closure of the crossing have reduced the flow of goods and driven prices up.
Palestinian exports have plummeted to their lowest levels since 1994 because of the Karni closures and a year-old Western ban on direct aid to the Hamas-led government, the World Bank report said. The value of Palestinian exports in 2006 was nearly 30 percent below the level 10 years ago.
Under the World Bank proposal, Rafah could be quickly expanded to handle Palestinian exports and eventually imports. Egyptian sea ports and airports plus the Suez Canal would be used to move goods in and out.
The World Bank said increased trade was the key to reviving the Palestinian economy. Trade accounts for about 85 percent to 90 percent of the Palestinian gross domestic product.