UN: Refugees excluded from economic growth

Modest economic gains propelled by a growing construction sector are leaving Palestinian refugees behind, according to a UN report released Monday. Refugee unemployment in the West Bank grew 10.3 percent in the first half of this year compared to 2010, and new employment lagged 3.7 percent behind non-refugees, according to the data collected by the UN agency for Palestinian refugees. The average purchasing power of refugees' wages fell 4.8 percent this year, the report said. The report followed last week's figures showing that construction jobs in the Gaza Strip have increased by 350 percent, while refugee unemployment declined less and employment rose more slowly in the coastal strip. "The patchy gains we have seen in the West Bank and mini boom in the Gaza tunnel economy has left refugees largely untouched," UNRWA spokesman Chris Gunness said on Monday. UNRWA economist and report author Salem Ajluni said refugees face a number of obstacles excluding them from growth rates. "Refugees have less wealth, and for the most part, less land resources," breeding discouragement and blocking access to small-scale agricultural work that buffers hard times, he said. The report said daily wage rates had declined in the West Bank, again hitting refugees hardest, with the average monthly pay for refugees declining 3.4 percent, and reaching nearly 15 percent less than average wages for non-refugees. High rates of unemployment -- among the highest in the world at 32.9 percent in Gaza -- are pushing down the value of wages, the economist said. Further, economic growth has been concentrated in the construction sector, UNRWA said. In the West Bank, 90 percent of new jobs were in the private sector, and 70 percent of these were in construction. Meanwhile employment in agriculture dropped 20 percent and in private services by 26 percent. Increased mortgage lending due to new Palestinian Monetary Authority regulations could have pushed up building rates in the West Bank, Ajluni said, while in Gaza, tunnels under the Egyptian border are bringing in more construction materials since Hosni Mubarak's regime collapsed. Ajluni warned the private service decline was "serious" as it could not be explained by seasonal fluctuations. "It could be the first indication of a decline in NGO and UN-funded positions," he said, after the international financial crisis and political trends restricted donor support to Palestine. While employment rose 3.7 percent in the West Bank, and 1.5 percent amongst refugees, the simultaneous rise in unemployment is explained by a growing labor force, the economist said. "The economy is not growing fast enough to absorb the number of people who enter the job market," he said. Meanwhile, the economies of the West Bank and Gaza Strip are growing farther apart, the economist explained, noting that while Gaza is "cut off" from external markets, there has been a "slow easing" in the West Bank. The economies have been "closed off from each other," with disastrous results for trade, he said. "As a matter of deliberate policy the international community has divided Gaza and the West Bank, they have chosen to isolate Gaza and engage the West Bank and this has led to a clear divergence economically," spokesman Chris Gunness said. UNRWA's emergency programs are facing ever greater humanitarian needs as a result of the ongoing labor collapse amongst refugees, he said. "But rather than asking our donors to pay for the collective punishment of Gaza and occupation in the West Bank it would be better for our beneficiaries and more cost effective for our donors if they put pressure on the appropriate parties to end the root causes," Gunness said.