LONDON, 28 January 2007 — The Palestinian Authority (PA) economy has never been allowed to expand as it should. In Gaza, restricted land access, strict internal and external security measures and high population density have put the fragile economy under pressure. In the West Bank, the same type of security measures restricting movements of people to and from jobs, businesses and making the movement and export of goods extremely difficult, have had the same effect on the economy.

The West Bank’s population is slightly less dense which slightly eases the pressure on its economy. The security measures have been tightened and employed even more frequently, largely in response to the elevated threat from Palestinian resistance groups since the second Intifada began.

Borders and checkpoints being closed severely disrupting trade and labor movements and Israeli military actions destroying businesses and administrative structures were both a factor in the PA recession of 2001-2002. The separation wall being constructed since late 2002 has further exacerbated the problems. Plundering of its budget has also been extremely detrimental to the growth of the economy.

The Israeli and Western reaction to the election of Hamas in the January 2006 PA elections, refusing aid and boycotting exports and services increased the Palestinian deficit from $60 billion-$70 billion to $110 billion per month. Israel also began withholding tax revenues, which accounted for a third of the PA budget and were used for paying the full salaries of its 140,000 employees, the main breadwinners for a third of Palestinian families. These actions have combined to cripple the Palestinian economy.

Hamas was elected for its stance on corruption and they haven’t plundered the PA economy, nor have they put selfish greed before Palestinian welfare. The West’s embargo has made this irrelevant. The economy is in a worse state than ever. There are people and companies trying to help. Zaytoun is a UK company paying fair-trade prices to import olive oil and other produce from growers in Palestine. The products are sold over the Internet and through many small outlets, with hope of attracting bigger stores.

Another is Joe Turner of Freedom Clothing, a UK not-for-profit cooperative set up in June 2005, importing Palestinian clothing for sale online. At the moment he only imports T-shirts from one factory in Beit Jala employing 80 Palestinians. He has his own printer and prints T-shirts with designs to order.

(Liam Bailey writes regularly for the Palestine Chronicle and is an advanced blogger on the Washington Post’s Post Global blog.)