IMF calls for Austerity in Palestine: Ignores catastrophic Impact on Health

Christof Lehmann (nsnbc) : The International Monetary Fond (IMF) issued a report, warning about the possible collapse of Palestine’s economy. In August the UNRWA Director of Health warned that the lacking possibility to develop a sustainable economy may be one of the root causes for an alarming rise in infant mortality and non-communicable diseases in Palestine. 

Palestine_Gaza_Child_NEOThe recent IMF report warns that the Palestinian economy faces “daunting challenges” due rising political uncertainty and a stalled peace process. In a press release, the IMF would state that:

“In this difficult and fragile environment, it is essential that the main stakeholders – the Palestinian Authority (PA), Israel, and donors – work together to maintain macro-fiscal stability, safeguard institutions, and ensure a steady inflow of donor aid to avoid a deterioration in economic conditions, according to the latest report issued today by IMF staff for the Ad Hoc Liaison Committee (AHLC).”

Christoph Duenwald, IMF Mission Chief for Palestine’s West Bank and Gaza said:

“The costs of inaction are potentially severe: sustained recession, rising unemployment, and, ultimately, social unrest.” 

The AHLC is scheduled to discuss the IMF report and the state of the Palestinian economy at a meeting in New York later this month. The IMF provides technical services to the West Bank and Gaza, including policy advice in the macroeconomic, fiscal, and financial areas, as well as technical assistance. The report reviews recent developments, discusses the risks to the outlook, provides advice on policies to strengthen the economy, and recommends actions to be taken by all parties concerned. 

The IMF press release would state that IMF staff recommends that the PA retain policy discipline to address fiscal pressures and a large projected financing gap in 2015 projected at US$500 million (or 3.7 percent of GDP). Measures should focus on limiting the rise in the wage bill, introducing new government administrative fees, and strengthening tax administration.

The report also urges Israel to enhance economic cooperation, ease restrictions on movement and access in the West Bank, and to work with other countries in the region to lift the blockade of Gaza, which is impeding postwar recovery. The recent conflict in Gaza has had a devastating impact on all sectors of the economy, in addition to the human loss. Donors should maintain aid to the Palestinian economy at this critical juncture, the report says.

Dunewald added:

“Measures by the PA to ensure macro-fiscal stability and a resumption of growth can only go so far. The strong and predictable support of the donor community—notwithstanding other competing claims on aid budgets—remains as important now as it ever has.”

The IMF is, on other words, recommending that the Palestinian Authority (PA) implements further austerity measures in a Palestine where large swaps of the population are already living at a, or below that what is considered a minimum.

In August the UNRWA’s Director of Health, Dr. Akihiro Seita, gave an interview, warning that the Israeli occupation is one of the root causes that prevents the development of a sustainable Palestinian economy. Dr. Akihiro Seita warned about an increase in infant mortality among Palestinian children, saying that:

Infant mortality in the Gaza Strip has fallen from 167 per 1,000 life birth during the 60s to 20.2 in 2008. The latest UNRWA report from 2013, however, shows that infant mortality has risen to 22.8 per 1,000 life birth. While the rise is not statistically significant, I asked Dr. Akihiro Seita why the UNRWA considers this rise as a dangerous marker.

Dr. Akihiro Seita stressed that it is correct that the increase is not statistically significant but that a reverse in a trend of infant mortality is very rare. On an international level, said Dr. Seita, one can observe a reverse in the trend of infant mortality in conflict areas, like in Iraq, in the 1990s, adding that a kind of generalized conflict could be one of the causes, but even that is very rare. In other incidents an increase in infant mortality in children up to the age of one would for example be correlated to the outbreak of communicable diseases, but also that is very unusual.

The reason why the infant mortality rate also is an important indicator, said the UNRWA Director of Health, is that it does not merely reflect the level of primary medical care, but that it reflects the economic and other development of a society in general. This is one of the reasons that the rate has been included as one of the indicators in the millennium development goals, he added.

Dr. Akihiro Seita also noted that there was an alarming rate of non-communicable diseases such as diabetes among Palestinians. The UNRWA Director of Health stressed that one of the primary reasons for e.g. diabetes was that the population is poor and that bread is subsidized by the government. Dr. Seita said:

One reason for the high prevalence of diabetes throughout Palestine is that the people generally are poor and that bread is one of the most affordable foods because it is government subsidized. It would be misleading to speak about malnutrition said Dr. Seita, because it could give the impression that people are starving or loosing weight. The issue, he added, is rather that the one-sided nourishment makes people prone to become obese and to develop diabetes.

It is also noteworthy that the 2014 Israeli bombardment of Palestine’s Gaza Strip wiped out over 30 % of the coastal enclaves industry and that the protracted blockade of Gaza and the occupation of the West Bank prevents the development of e.g. a lucrative tourism industry. Following what can be described as a typical IMF policy of austerity, some analysts would note that the IMF, with regard to Palestine reinforces rather than mitigates an, arguably, genocidal policy.

CH/L – nsnbc 23.09.2015

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