AL QUDS, Jan 13: The Palestinian intifada, or uprising, has cost the recession-hit Israeli economy 3.2 billion dollars, equivalent to economic growth of four percentage points, the Bank of Israel said Sunday.

“In addition, the intifada has created a political uncertainty which has undermined the climate of business, investment and private consumption,” the central bank’s research department said in a statement.

The bank said the losses covered the period from October 2000 until December 2001. The spiral of violence from the uprising, which broke out on September 28, 2000, has also cost more than 1,100 lives and left the peace accords between Israel and the Palestinians in tatters.

It said the biggest losses came from a 45 per cent drop in tourism revenues over the period, equivalent to 1.8 billion dollars. The sector had undergone an “impressive recovery in 1999 and the first three quarters of the year 2000.”

Trade with the Palestinians has also been badly affected by the fighting, the bank said, with a 45.7 per cent drop in volume valued at 500 million dollars.

In construction, which had employed some 45,000 Palestinians before the intifada, losses were estimated at eight per cent of revenues, or some 650 million dollars.

The agricultural sector, which also employed thousands of Palestinians, has lost some 120 million dollars, the bank said.

Since the start of the uprising, Israel has imposed an almost uninterrupted blockade of the West Bank and Gaza Strip, preventing thousands of Palestinians from travelling to their jobs inside Israel and throwing them out of work.

This, along with a crisis in the country’s high-tech sector, has caused Israel’s gross domestic product (GDP) — the main measure of economic growth — to drop by 0.5 per cent in 2001, its worst performance since 1953, the central office of statistics in Al Quds said recently.

The year before, GDP grew 6.4 per cent amid the boom in the now ailing high tech industry. About 100 Israeli companies are listed on the tech-heavy Nasdaq stock exchange in New York.

Besides Japan, Israel was the only developed country to have registered negative growth rate in 2001

The Bank of Israel has attempted to spur economic revival by lowering the base interest rate by two points, but only managed to cause strong attacks against the national currency.

The budget deficit has more than doubled, rising to 3.8 billion dollars last year, equalling 3.3 per cent of GDP, from 1.8 billion dollars in 2000.

The future also seems bleak as the standard of living in Israel has nosedived, with GDP per capita going down by 2.9 per cent to 17,100 dollars in 2001, after growing by 3.6 per cent the year before.—AFP