The Eurasia Center
4927 Massachusetts Ave. NW
Washington, DC 20016
www.eurasiacenter.org
President@eurasiacenter.org
Palestinian Territories: Overview
Politics First – An Economy at the Whim of a Crisis:
The economy of the Palestinian territories, here defined as the West
Bank and Gaza Strip, is completely and inexorably linked to the Israeli
economy, and consequently to the political situation that has
embroiled the region since Israel declared its independence in 1948.
Because of security precautions taken by Israel, especially since the
second intifada began in 2000, many Palestinians who work in Israel
have been unable to work in Israel. Moreover, their ability to export
goods has been severely impaired. Ultimately, because of the political
issues surrounding Israel and Palestine and the resulting security
situation, the economy of the Palestinian territories is in a dire
situation.
High population density and Israeli security controls placed on the
Gaza Strip since the end of the second intifada have degraded
economic conditions in this territory. Israeli-imposed border closures,
which became more restrictive after HAMAS seized control of the
territory in June 2007, have resulted in high unemployment, elevated
poverty rates, and the near collapse of the private sector that had
relied on export markets.1 There were changes to the restrictions on
Israeli imports in 2010 that affected their economic activity, but
regular exports from the Gaza Strip are still prohibited.
Economic Indicators:




1
The GDP of Palestine in 2009 was $12.79 billion.2
This GDP reflects Palestine’s status as one of the poorest regions
in the world, with 38% of its population under the poverty line.3
GDP per capita is at $2,900.4
Growth in the GDP of Palestine, however, was 7%, showing at
least some signs of recovery from the poor conditions existing
since the second intifada began in 2000.5
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
3
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
4
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
5
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
2

Inflation remains relatively at 5%, but unemployment is
disturbingly high at 40% (2011) in Gaza Strip and 23.7% in
West Bank territory. This problem has been exacerbated by
Israeli security precautions which prevent many Palestinians
from obtaining work in Israel.6
Economic Structure:




Palestine’s economy is primarily service based, accounting for
55.5% of jobs and 73.9% of output and income.7
GDP by sector:
o agriculture: 3.7%
o industry: 13.6%
o services: 82.7%8
The economy, which is inexorably linked to the economy of Israel, has
been severely impaired by the second intifada and the resulting security
precautions of Israel, namely sealed borders and checkpoints making it
difficult for Palestinians to find jobs in Israel.9
The chief exports of Palestine include olives, fruit, vegetables
and limestone.10
Political Considerations:




6
The Palestinian territories are governed by what is known as the
Palestinian Authority, a conglomerate organization of many
different parties representing the Palestinian people.
In January 2006, the Islamic Resistance Movement, HAMAS,
won control of the Palestinian Legislative Council (PLC);
Palestinian Authority security forces have operated only in the
West Bank and not in the Gaza Strip since HAMAS seized power
in June 2007; law and order and other security functions are
performed by HAMAS security organizations (2008).11
The political environment of the Palestinian territories has
become greatly complicated by the March 2006 elections of
Hamas as the majority party.12
Hamas is recognized by many countries, particularly the United
States and the European Union as a terrorist organization, who
proceeded to block foreign aid to prevent increased financing to
the organization.13
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
8
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
9
CIA World Factbook: https://www.cia.gov/cia/publications/factbook/geos/gz.html
10
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
11
https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
12
Report of the US Department of State on the Israeli-Arab Conflict: www.state.gov
13
Report of the US Department of State on the Israeli-Arab Conflict: www.state.gov
7



Another complicating factor over Hamas’ victory is their refusal
to recognize Israel, a major obstacle in any peace talks.14
Nonetheless, Israel still controls maritime, airspace, and other
access to the Gaza Strip; Israel also enforces a restricted zone
along the border inside Gaza.15
In May 2011, under the backings of Egyptian-sponsored
reconciliation negotiations, Fatah and Hamas agreed to reunify
the Palestinian territories, but the parties have struggled to
finalize any details on governing and security structures. The
status quo remains with Hamas in control of the Gaza Strip and
Abbas and the Fatah-dominated PA governing the West Bank.
Abbas (who on behalf of the Palestinians in September 2011
submitted a UN membership application) has said he will not
resume negotiations with current Israeli Prime Minister Binyamin
NETANYAHU until Israel halts all settlement activity in the West
Bank and East Jerusalem.16
Attractions:

Tourism – Religious Sites of Significance: The Palestinian
territories are home to some of the most religiously important
sites in the Judeo-Christian tradition. Most notable amongst
these is the city of Bethlehem, the Biblical birthplace of Jesus of
Nazareth. Bethlehem is also the site of the Church of the
Nativity, the oldest Christian church, as well as Rachel’s Tomb, a
significant site for Judaism.
Troubled Spots:
 Climate: The Palestinian territory, located in the Middle East
near the Mediterranean coast, is mostly arid and has major
issues with water shortage.17
 Political Issues: Most experts agree that the economy will
continue to be insurmountably impaired until some sort of
accommodation is reached between the Palestinian Authority and
the Israeli government that would enable restored border
travel.18
o After violence in 2008 between Israel and HAMAS that
brought but spiraling end-of-year violence resulted in the
14
Report of the US Department of State on the Israeli-Arab Conflict: www.state.gov
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
16
Ibid
17
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
18
Report of the US Department of State on the Israeli-Arab Conflict: www.state.gov
15
deaths of an estimated 1,100 to 1,400 Palestinians and left
tens of thousands of people homeless
 Security: As it stands, the Palestinian territory is one of the
most dangerous regions in the world, which significantly inhibits
economic activity of any kind.19
 International Pressure: In the year since the election of
Hamas, the Palestinian Authority has come under increasing
pressure to form a unity government that would, among other
things, explicitly recognize the State of Israel and its right to
exist. As long as Hamas continues to refuse to recognize Israel,
countries including the United States have halted their foreign
aid, further exacerbating the many issues in the Palestinian
territories.20
Environmental Section:
Held Hostage by Politics:
The Palestinian territories, here defined as the Gaza Strip and West Bank, are
environmentally speaking rather inhospitable. They are extremely arid and a
water shortage is a major problem. Moreover, the current political situation,
namely the current dispute with Israel over land and international recognition,
make environmental initiatives virtually impossible to pursue. The Palestinian
territories are unable to sign any international legislation pertaining to the
environment, and they lack the resources to undertake any domestic initiatives of
their own.
Demographics:





19
20
21
The Palestinian territories are comprised of the Gaza Strip and West
Bank, which have populations of 1,657,155 and 2,568,555 people
respectively, yielding a combined population of 4,225,710.21
The Gaza Strip is predominantly Arab Muslim, primarily Sunni, comprising
roughly 99.3% of the population.22
The West Bank, on the other hand, has large Jewish and Christian
minorities:
o Muslim: 75%
o Jewish: 17%
o Christian: 8% (Note: In terms of ethnicity, the Christian population is
predominantly Palestinian Arab as well)
Life expectancy for males in the Gaza Strip is 72.27 years and 75.68
years for females. The numbers are roughly similar for the West Bank. 23
Age composition:
Report of the US Department of State on the Israeli-Arab Conflict: www.state.gov
Report of the US Department of State on the Israeli-Arab Conflict: www.state.gov
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
23
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
22


o Gaza Strip:
 0-14 years: 43.9%
 15-64 years: 53.5%
 65 years and over: 2.6%24
o West Bank:
 0-14 years: 35.8%
 15-64 years: 60.5%
 65 years and over: 3.7%25
With more than half of the country’s population within the age
group 15-64, and roughly 40% (average between the Gaza Strip
and West Bank) under 14 years of age, the population of the
Palestinian Territories is one of the youngest in of the world.26
Population growth is estimated at an average of 3.2%27
Education:






24
Education in the Palestinian territories is divided into four
primary sections:
o Pre-primary;
o Primary;
o Secondary – High School;
o Tertiary – University level.28
Approximately 30% of all children are enrolled in some kind of
pre-primary education program.29
86% of all children are enrolled in a primary education program,
which is completed by 98% of those enrolled.30
88% of girls and 83% of boys go on to secondary school.31
Of students at age for tertiary education, only 49% enroll.32
Literacy in the Palestinian Territories is at 92.4%:
o male: 96.3%
o female: 88%33
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
26
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
27
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/gz.html
28
UNESCO Institute of Statistics: http://www.uis.unesco.org/profiles/EN/EDU/countryProfile_en.aspx?code=5880
29
UIS: http://www.uis.unesco.org/profiles/EN/EDU/countryProfile_en.aspx?code=5880
30
UIS: http://www.uis.unesco.org/profiles/EN/EDU/countryProfile_en.aspx?code=5880
31
UIS: http://stats.uis.unesco.org/unesco/TableViewer/document.aspx?ReportId=198
32
UIS: http://stats.uis.unesco.org/unesco/TableViewer/document.aspx?ReportId=198
33
CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/we.html
25
Graph from the UNESCO Institute of Statistics
Geography/Natural Resources:
 The Gaza Strip is a small strip of land on the coast of the
Mediterranean and is completely within the country of Israel.
Acknowledgements:
Research and Data Development Provided by: David Stern and Tara Jakubik,
Research Assistants under the Supervision and Coordination of: Dr. Gerard Janco,
President, Eurasia Center