Economic situation of refugees in Gaza remains of concern despite improved indicators

07 December 2011

7 December 2011

Fishermen in GazaA new report by the United Nations Relief and Works Agency, UNRWA, has found evidence that in spite of Gaza’s construction industry experiencing a period of relatively “expanded activity” due to the tunnel economy, the situation of some 1 million refugees registered with the Agency remains of concern. According to the report, comparing macro-economic indicators for the first half of 2011 with the first half of 2010, there was a decline in the refugee participation in the labour force following robust growth in the working-age population. The refugee unemployment rate remains high at 33.8 per cent.

An important finding is that in the year-on-year period, there were some 1,430 more refugees employed in the public sector and about 18,670 more in the private sector, for a net gain of about 20,100 jobs. Refugees accounted for less than 20 per cent of job growth in the public sector and about 55 per cent of private employment growth in the parallel period comparison. Given that refugees accounted for nearly 62 per cent of the Gaza labour force in this period, these gains are less than proportional, particularly in the case of the public sector.

The UNRWA report finds a “surge in private employment” as a result of “expanded importation of much-needed building materials and other productive inputs”.

UN estimates show that for the month of September, 46,500 tonnes of aggregate came through the Kerem Shalom crossing from Israel into Gaza, whereas 90,000 tonnes came through the tunnels; 9,195 tonnes of cement came through Kerem Shalom, while there were 90,000 tonnes of cement through the tunnels, and 1,418 tonnes of steel bars came through Kerem Shalom, whereas 15,000 tonnes came through the tunnels.
“Despite the easing of restrictions on the Israeli-imposed blockade, tight controls of the crossings from Israel into Gaza are a significant factor behind the growth in the tunnel economy,” said UNRWA spokesman, Chris Gunness. “The facts speak for themselves. Construction jobs grew by more than 9,400, increasing by 3.5 times relative to first half 2010. This accounted for 27.7 per cent of all job growth in the year-on-year period. This is still significantly lower than pre-blockade levels. But despite significant gains, broad unemployment in Gaza, at nearly 33 per cent, remains among the most severe in the world. Under such circumstances, the reversal of deepening poverty and aid dependency among ordinary people in Gaza is unlikely.”

The report finds that in an economy severely depressed for most of the past decade, developments in the first half of 2011 provided some marginal relief. “Employment jumped by more than 47,000 jobs in first-half 2011, or 24.7 per cent to an estimated 237,475. The broad unemployment rate declined to 32.9 per cent from 45.2 per cent in second-half 2010.”

According to the report: “The private sector accounted for 90 per cent of all job gains in first-half 2011 relative to second-half 2010 as it added 42,450 positions. In proportional terms, private sector employment jumped by 42.4 per cent in the sequential period comparison. Public sector employment grew by 4,660 jobs or 5.1 per cent in the same period.” However, the private sector continues to be badly affected by the restrictions on exports. While the informal economy provided for wider imports, the blockade continues to restrict exports, which today stand at just over three per cent of pre-blockade levels, preventing sustainable economic growth.

Download the full report (PDF)

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For more information please contact:

Christopher Gunness
UNRWA Spokesperson
Mobile: +972 (0)54 240 2659
Office: +972 (0)2 589 0267
[email protected]

Sami Mshasha
UNRWA Arabic Spokesperson
Mobile: +972 (0)54 216 8295
Office: +972 (0)2 589 0724
[email protected]