International Reports about Gaza

Impact of international crisis of food on the Palestinian economy

Within his continuous concern of political and economic developments in the region, Pal Think for Strategic Studies held a symposium about “Reflection of global crisis of food on the Palestinian economy” in the center’s headquarters in Gaza City. The Symposium was attended by a select group of economists, businessmen and specialists in this area. The workshop included two main central presentations by the economic expert Mr. Omar Sha’ban, “Chairman of Pal think” and the lecturer of economy Mr. Mazen El-Ejla. The meeting was conducted by Mr. Hany Habib. At the beginning, Mr. Hany mentioned the role which were played by Pal Think in studying the local issues scientifically and in-depth which contribute in right understanding, diagnosing and setting strategic solutions for it. The presentation of Mr. Sha’aban, included three main articulations. He presented general evaluation of global economy with mentioning of themes of global food crisis. He finished with statement of reason of this crisis. Mr. Sha’aban assured this crisis is one of two biggest economic crises in the previous century after the “Biggest Recession” in the 1930s. He stressed that current crisis was more difficult than crisis of “Atmosphere Market” in Kuwait and Jordanian Dinar in Mid-Eights. It should be noted that it affected the economies of developed countries while it had a little impact on developing countries, stressing that this crisis remain related to economic developments especially in the United States, where crisis has aggravated the mortgage, all of foreshadowing that the worst has not come yet and that the crisis will continue through 2008. In presentation of themes and fields of crisis, Mr. Shaba’an talked about basic themes which include: Decrease of the U.S. real estate market in the second half of the year 2007, after financial markets witnessed fluctuations reflected a clear declaration of bankruptcy of many banking institutions. This goes back to several reasons including, inflated the value of real estate loans without good guarantees. Increment of oil and energy resources prices: the gallon of oil have been doubling which contributed to increment of problem. At the same time, this provided huge cash surpluses in the Arab Gulf states which contributed to avoid the negative effects of the problems of the crisis of global economy. Aircrafts and cars industry: the forefront centers of US were disrupted and U.S aircraft sales retreat of to European and Asian industries. Huge increment of prices of food which goes back to problem of dryiation in Australia, disease in China, and floods in Europe. This is obvious in prices of rice and coffee which have been doubled to highest levels through the last ten years. Fluctuating of Dollar’s Value: the value of dollar have been decreased throughout the second half of 2006. United States ignored this decrease so that it can facilitate exports and put obstacles in front of imports in order to make trade balance in its behalf. Mr. Omar also summarized the reasons of global crisis as followed: · Bad performance of American Economic. · Massive unreal inflation of Estate Market (Estates Bubbles). · Political crisis in the areas of wealth (Iraq, Nigeria, Venezuela). · Climate conditions, drought of Australia, floods of Europe, and diseases of China. · Orientation toward production of biodiesel (biofuel) as an alternative to petroleum. In his presentation, Mr. Mazen El-Ejla stressed on importance of food subject as it’s related to daily life of people. He noted that there were many increments of prices of food which begin in 2003 but it was simple in comparison to increment which began in half of 2007 (price of wheat increase 130). He categorized the reason of crisis to supply and demand. Reason related to supply include: Continuous support of farmers in US and Europe which make developing countries unable to stand in front of competition which led to American and European monopoly of food market. Decline of storage rate because of increment of storage process’ costs. Increment of fuel prices which are necessary for agriculture process (irrigation and transportation). Reason related to demand include: Increment of demand on food in growing markets in China and India. The role of speculation, especially in the real estate market. Orientation toward biodiesel which increased in 2007. This led to negative impact on the growing countries which suffered from increment of poverty rates which was treated partially by increment of pumping aids to poor countries. On the governmental level, the official resources reasoned the crisis to climate changes with ignorance to talk about biodiesel as effective reason. Mr. El-Ejla pointed out the reflection of crisis on the national level in Palestine. He noted that crisis in Palestine is deeper and bigger because of two main factors; internal and external. The internal factors include events of June, current siege, absence of agricultural and economic policies, and monopoly of traders and bad management of problem. On the other hand, the external factor includes impact of global crisis on Palestine as it affect most of regional countries. El-Ejla stressed that the crisis of prices increment in Palestine Preceded the global crisis because of exceptional conditions of Palestinians. This made UNRWA increase aids for refugees which eventually contributed in decline of problem’s sharpness. At the end of his presentation, Mr. Mazen suggested many solutions for the crisis: Cancellation of the customs taxes. Increased salaries. The formulation of agricultural policies to support farm and its orientation towards agricultural investment. Participants suggested attend several other solutions, including: Supporting basic materials as an interim solution to the crisis. Develop a contingency plan to cope with the current reality. The workshop included several interventions from the audience confirmed the inability of the Palestinian economy in the face of global changes, as well as his inability to influence the regional economic climate. Attendance denounced the absence of political vision that supports the economic crisis as one of the elements of steadfastness, especially that there is no room for separation between politics and economy as linked components. Finally, Mr. Hani Habib praised commendable role of Pal Think in putting forward regional issues and examine their relationship with the Palestinian reality which is in line of the policy and vision of Pal Think Center for strategic Studies.

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