Economic Structure and Development Prospects of the West Bank and the Gaza Strip

by H. Benshahar, E. Berglas, Yair Mundlak, Marc Sadane

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The 1967 Six Day War united economies of different structure and levels of development — Israel and the West Bank and the Gaza Strip — and disrupted past economic ties between the occupied territories and other Arab states. Future development will depend on the economic relations between the territories and both Israel and neighboring Arab countries. To project the economic development of the territories, four economic sectors were analyzed: agriculture, manufacturing, construction, and services. The average annual rate of output growth is expected to be 5.9-13.0 percent during 1968-1973, 6.8-11.6 percent during 1968-1978, and 7.8-10.2 percent during 1973-1978. The respective rates of growth in employment will be 3.3-10.6 percent, 3.4-7.4 percent, and 3.6-4.2 percent. The average rates of growth of labor productivity will be 2.4-2.6 percent, 3.4-3.6 percent, and 4.2-6.0 percent, respectively. The assumed rate of population growth is 3.5 percent. The development policy for the territories should allow sustained growth supported by modernization of the economic structure, including industrialization.

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