In the event of peace, and a Palestinian state being formed, Palestine Essay

In the event of peace, and a Palestinian state being formed, Palestine would carry massive economic repercussions due to lack of competitiveness and underdevel - Essay ExampleThe current economic scenario in Palestine is not very encouraging. In the twinkling quarter of 2007, the GDP of Palestine grew by 6.5%. The largest increases in gross value added were registered the following sectors education (+32.1%), hotels (+24.9%), health ( +15.2%), construction (+13.9%) and agriculture (+12.8%). There was a discipline however in sectors like mining, water and electricity and manufacturing. However in Gaza, due to political problems, 95% of the factories in Gaza had closed down leading to 32000 dividing line losses. Many of these factories were approaching a point of no return where owners were likely to sell their assets and shut down completely. (The Portland trust, Nov, 2007)In the previous years, between 2005 and 2006, the GDP in Palestine cut out by 8.8%. In the first quarter of 2007, the GDP fell by 4.2%. This was 13.2% lower than the GDP for the first quarter of 2006.(The Portland Trust, July 2007)Besides the detrimental growth of the economy, it is the typography of the GDP that remains a cause for concern. The GDP is driven by Government and private consumption from aid rather than investment or production. prevalent sector employment for instance has increased by 60% between 1999 and 2006. Much of the foreign aid which could e used in infrastructure make is spent on salaries of government employees. (World Bank, 2007) Fig2 Source (World Bank Document, 2007)Even among Palestinians, the condition of those living in Gaza is particularly bad. Despite receiving aid, the number of slew in Gaza living at a lower place the poverty line has increased from 21.6% in 1998 to nearly 35% in 2006. Without aid, the figure is likely to be around 67%. (World Bank, 2007) Fig3 Source (World Bank Document, 2007)Given the current economic scenario, it is likely that a n independent Palestine face the immense challenge of managing the repercussions of years of negative economic growth and political instability.In the context of Palestine, the concept of peace is crucial to the economy. According to a World Bank report, in 1968, an average Israeli was most 10 times richer than the average Palestinian. Today the situation is far worse. The GDP of Israel is almost 20 times that of Palestine and over 2/3rds of Palestinians live below the poverty line. (2007). This disparity in income level and lifestyle is a cause for concern. As Moshe Alamaro, a research scientist at the University of Massachusetts points out there muckle be no lasting peace if a destitute third world nation stress across the border to find a successful modern democracy. Alamaro compares the relationship between Japan and North Korea to that between in Israel and Palestine and says that Japan helped fuel economic growth in South Korea and thereby avoid any friction between the two states. Similarly, he believes that the west along with Israel needs to fuel economic growth in Palestine and thereby establish a mutually beneficial socio-economic relationship.(Alamaro, 2002)From the Palestinian perspective however, it is important to break free from the dependence on Israel. The Palestine National authority has charted a framework for Economic development. The framework suggests that dependence on Israel can be reduced by diversifying the export markets and