The recent crisis has entailed—in addition to the death or injury of thousands of Palestinians, and several Israelis—serious impediments to personal and vehicular mobility between the West Bank and Gaza and between the Occupied Palestinian Territory as a whole and Israel and the rest of the world. Furthermore, there have been obstacles to mobility between cities, towns and villages in both the West Bank and Gaza. These were due to reduced levels of security on roads between Palestinian population centers, the imposition of strict internal and comprehensive border closures by the Israeli authorities (including the placing of physical barriers between Palestinian villages and cities), and to the work interruptions in the Palestinian Territory. The political strife has resulted in significant losses for the Palestinian economy. The present report seeks to quantify the losses incurred during the last three weeks.

I. Introduction

The recent crisis has entailed—in addition to the death or injury of thousands of Palestinians, and several Israelis—serious impediments to personal and vehicular mobility between the West Bank and Gaza and between the Occupied Palestinian Territory as a whole and Israel and the rest of the world. Furthermore, there have been obstacles to mobility between cities, towns and villages in both the West Bank and Gaza. These were due to reduced levels of security on roads between Palestinian population centers, the imposition of strict internal and comprehensive border closures by the Israeli authorities (including the placing of physical barriers between Palestinian villages and cities), and to the work interruptions in the Palestinian Territory. The political strife has resulted in significant losses for the Palestinian economy. The present report seeks to quantify the losses incurred during the last three weeks.

II. Internal Impact

Since 29 September, travel between the different areas inside the Palestinian Territory (PT) has been severely hindered by confrontations as well as roadblocks and checkpoints established by the Israeli authorities. The main economic impact of such mobility restrictions has been the disruption of productive activities and the internal circulation of goods.

The short-term losses in such a situation are difficult to measure. But they include reduced income to workers, farmers and business people who cannot reach their places of employment in the PT and the reduced output and revenues for commercial and business enterprises which are unable to obtain inputs and/or access output markets. Moreover, the uncertain security situation has reduced tourist-generated income. As the crisis persisted, the extent of these types of losses became more pronounced.

An approximate measure of the internal effects of such disruptions can be derived from estimates of the Gross Domestic Product (GDP)—i.e. the value of goods and services produced in the Palestinian economy. The value of the GDP is expected to reach about USD 5,000 million this year while the average work year in the Palestinian Territory is about 312 days. This results in an estimated average domestic product of about USD 16 million for each normal working day.[1] Assuming that recent events have resulted in a 50 per cent reduction in normal economic activity, the losses are estimated at about USD 8 million for each normal working day during the period 30 September—19 October.[2]

III. External Impact

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