Palestinians need to be given an economic stake in their own future to encourage "the forces of peace and moderation", Gordon Brown urged yesterday as the UK warned of the need to break the "vicious cycle" of poverty and unemployment, instability and conflict with Israel.
In his first comments on the Middle East since taking over from Tony Blair in June, the prime minister signalled a strong interest in reviving the moribund peace process by endorsing a "bleak" report on the Palestinian economy. The private sector in the Gaza Strip is now near "total collapse," while movement within the West Bank remains "highly restricted", it said.
Israeli closures and security restrictions on the movement of goods and services "represent the greatest barrier" to Palestinian economic growth. These are targeted at extremists but "impact equally on the majority of moderate Palestinians", it warned, adding: "Israel‘s medium-term security can only be assured through Palestinian prosperity."
But the report, Economic Aspects of Peace in the Middle East, by Ed Balls (now the schools secretary) and Downing Street adviser Jon Cunliffe and commissioned by Mr Brown when chancellor, was criticised for not directly tackling the blockade of Gaza, where the Islamist movement Hamas has been in sole control since June and remains at odds with the western-backed government led by Salam Fayyad from the West Bank town of Ramallah.
Barbara Stocking, director of Oxfam, said: "There is an air of unreality, especially with Gaza - where you can‘t have economic progress if you have an economic blockade going on. This is a very nice report, but it‘s a bit passive."
The report paints a familiar picture of gloom about the Palestinian economy. Despite $10bn in international aid since 1993, the Palestinians are getting poorer and 65% now live below the poverty line. In 2005 the Palestinian population was just over half that of Israel yet Palestinian GDP was only 3% of Israel‘s.
"For the Palestinians, further economic malaise will only increase humanitarian suffering," it said. "For the Israelis, economic deterioration...can only increase security risks. For both sides, the current vicious cycle of poverty and unemployment, contributing to instability and conflict, and in turn further poverty and unemployment, must be broken."