OPT: Weakened Gaza economy accompanied by decline in public services

(New York: 3 August) Continued closures of crossings into Gaza have further weakened the economy, with total economic losses reaching $23 million since their closure in mid-June, or an average daily loss of about $500,000. The vast majority of import-dependent industries

• such as the wood, construction and garment businesses - have closed down, and some 120,000 workers in Gaza will lose their jobs if the closures continue. Around 65,000 people lost their jobs in July.

The furniture industry, one of the most important in the Gaza Strip, is facing collapse. Some 400 truckloads of furniture destined for export - worth $8 million - are stranded in Gaza, and restrictions on movement have left business owners and merchants strapped for cash and unable to manage business or collect money for products already shipped and sold.

In addition, restrictions since March 2006 have made it difficult for approximately 20,000 Palestinians with jobs in Israel - representing 2% of the Gazan economy - to go to work. Last week, only 20 senior Palestinian traders were allowed to enter Israel per day.

"The ever-weakening economy is of enormous concern. We also cannot ignore the mounting human cost and its potential consequences," said John Holmes, the United Nations Emergency Relief Coordinator.

This week, the World Health Organization has confirmed the death of four Palestinians at the border with Egypt while waiting to re-enter Gaza through the Rafah crossing. Nevertheless, people are slowly returning - 414 Palestinians re-entered Gaza on 29 and 30 July through the Nitzana border crossing and then Erez crossing, after waiting nearly two months. They are the first of 2,000 Palestinians, out of approximately 6,000, who will be allowed to return to Gaza in the coming days following a compromise between Egyptian, Israeli and Palestinian authorities.

However, once inside Gaza, they will face a shortage of medicine. While health care facilities are still functioning, central drug stores in Gaza City are seeing a 25% shortfall in the supply of 121 essential drugs.

The lack of supplies is also increasingly hitting basic services. Some areas of Gaza have not received water for more than six days. Gaza city authorities have suspended the construction of new local water wells, which would have increased the quantity and quality of water, leaving three out of five local water wells unbuilt. Because of the closure, the Gaza municipality has not been able to obtain the spare parts it needs to repair the vehicles used for garbage collection.

The Gaza municipality has not been able to pay staff salaries due to the 50 per cent decline in revenues, leading municipality workers to go on strike on 29 July. Solid waste workers are likely to join in the coming days.

For further information, please call: Stephanie Bunker, OCHA-New York, +1 917 367 5126, mobile +1 917 892 1679; Dizery Salim, OCHA-New York, +1 917 367 9262; Elisabeth Byrs, OCHA-Geneva, +41 22 917 2653, mobile, +41 79 473 4570. OCHA press releases are available at http://ochaonline.un.org or www.reliefweb.int.