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ECB dismisses German criticism, says policies working

By - Apr 21,2016 - Last updated at Apr 21,2016

FRANKFURT — The European Central Bank (ECB) on Thursday dismissed German criticism of its monetary policy, insisting its benefits would take time to unfold, while bank chief Mario Draghi also said Britain's membership in the European Union [EU] was "mutually beneficial". 

"Let me say unequivocally that we view the participation of the UK to the EU as mutually beneficial and we will continue to say so in the coming weeks," Draghi told a news conference.

Would a Brexit "endanger the economic recovery of the euro area? The assessment of our staff is that the risk of this happening is limited," he said.

Turning to the ECB's policies, which have come under fire in Germany recently for hurting savers and banks, Draghi insisted that "our policies work, they're effective. Just give them time to fully display their effects". 

And he turned the tables on the politicians, saying that "with the rare exceptions, our policies have been the only policy in the last four years to support growth". 

At its previous meeting on March 10, the ECB had announced a new range of new policy moves aimed at driving chronically weak inflation in the euro area back up to economically healthier levels.

These included cutting interest rates to zero per cent, beefing up its controversial asset purchase programme known as quantitative easing and making vast amounts of cheap loans available to banks. 

But the measures have come under increasing fire in Germany, where the country's many savers are seeing interest income cut due to low rates, and banks' profits are being squeezed.

German Finance Minister Wolfgang Schaeuble even recently suggested that the ECB's policies were helping foment political unrest in Germany and aiding the rise of an anti-euro, anti-immigrant party, the AfD.

Draghi dismissed such criticism, insisting that the ECB was legally independent from any meddling from politicians.

ECB 'obeys law, not politicians' 

"We have a mandate to pursue price stability for the whole of the eurozone and not only for Germany alone," Draghi said. "We obey the law, not the politicians because we're independent."

And he threw back the ball into the politicians' court, urging them to pull their weight to help get the eurozone economy back on its feet.

"In order to reap the full benefits from our monetary policy measures, other policy areas must contribute much more decisively, both at the national and at the European levels," Draghi stressed. 

Nevertheless, Draghi left no doubt that the ECB could further ease monetary conditions in the single currency area if it felt the need to.

Ready to act 

"The governing council will continue to monitor closely the evolution of the outlook for price stability and, if warranted to achieve its objective, will act by using all the instruments available within its mandate," he said.

At Thursday's meeting, the bank's policy-setting governing council voted to leave interest rates at their current all-time lows.

 

Despite the ECB's latest round of rate cuts last month, eurozone inflation was stuck at zero per cent in March, a long way off from the 2 per cent the ECB estimates is conducive to healthy economic growth. 

Clock ticking as Swiss watchmakers await market recovery

By - Apr 21,2016 - Last updated at Apr 21,2016

LA CHAUX-DE-FONDS/LE LOCLE, Switzerland — In two small Swiss towns, watchmakers are trying to strike a balance as delicate as the mechanisms in their precision-engineered watches, squeezing suppliers to cope with an industry crisis while preserving the skills that drove past successes.

La Chaux-de-Fonds, home to just 39,000 people, and even smaller neighbour Le Locle have been at the heart of the Swiss watchmaking industry since the 19th century.

But after the boom years earlier this century, life has got much harder. Demand for traditional luxury watches has been hammered by a Chinese government crackdown on bribery, a drop in tourist shoppers to Europe and, at lower price points, the rise of smartwatches.

Top manufacturers such as Swatch Group, Richemont  and LVMH have responded by demanding price cuts from suppliers and taking more production in-house.

That has hit hard in La Chaux-de-Fonds and Le Locle, home to a network of industry subcontractors.

"Some brands asked us to lower prices by 15 per cent," said Alain Marietta, co-owner of Le Locle-based watch dial maker Metalem which employs around 250 people.

"That was not justified, but we did lower prices a bit and are taking a hit on our margin," he added, expecting sales to fall 10 per cent this year, in line with 2015, and staff would likely have to work short hours in the second half.

Francois Matile, secretary general of the watch industry employers' association, said about 1,000 jobs had been lost in about a year from the more than 59,000 in the Swiss watch industry. 

The actual figure was higher including temporary contracts not being renewed and staff attrition, he added.

La Chaux-de-Fonds had a jobless rate of 8.1 per cent in January, one of the highest in Switzerland. The watch industry accounts for the lion's share of its 11,000 industrial jobs.

‘In the same boat’

But the big brands are wary of pushing too hard, as they still rely heavily on suppliers' know-how, often handed down to each new generation in small family-owned businesses.

Despite the job losses, Matile said he knew of no company that had gone out of business in the industry.

"We are definitely all in the same boat. We wouldn't exist without this network of industry contractors and subcontractors," said Aldo Magada, chief executive of high-end brand Zenith, owned by LVMH, but headquartered in Le Locle where its more than century-old factory buildings are part of the UNESCO world heritage site stretching over the two towns.

Manufacturers such as Zenith have been cutting prices in a bid to boost demand, which has hurt suppliers.

But Metalem's Marietta said customers including Zenith, Chopard and IWC were making an effort to give work to subcontractors.

"Even the big groups will always keep part of the production with external suppliers because we are their safety valve," he added, noting that top manufacturers would be even more exposed to swings in demand if they brought more production in-house.

Horlyne, which employs around 30 people in La Chaux-de-Fonds and still uses the traditional decorative technique of engine-turning in which a precise, intricate pattern is mechanically engraved into an underlying material, said business was grim.

"We expect sales to fall 30-40 per cent this year and started working shorter hours in March," said company owner Raymond Leitenberg, adding he hoped to break even this year.

But he was confident that expertise and innovation would see the business through, having invested 600,000 Swiss francs in a new laser machine to be able to offer more decorations for Horlyne's flagship watch component called “oscillating weights”.

"The Swiss watch industry is very dynamic when it comes to research, it is not resting on its laurels. The crisis is fuelling creativity," said Leitenberg.

"We have reached a bottom, things have to improve, we just don't know when. We have to hold out until they do," he added.

Separtaely, global exports of Swiss watches plummeted in March, amid a dramatic contraction of sales in main markets Hong Kong and the United States.

Exports fell 16.1 per cent from March 2015 to 1.5 billion Swiss francs ($1.5 billion, 1.4 billion euros), the Federation of the Swiss Watch Industry (FHS) indicated.

In 2015, watch exports recorded their first full-year decline since 2009, contracting by 3.3 per cent with weakening Hong Kong demand already the main factor.

And FHS said the downward trend was accelerating.

The numbers last month, it added, were "the lowest March figures since 2011".

"The scale of the downturn is also unusual, since we must go back to the crisis of 2009 to find rates of variation of this order," it elaborated.

Analysts voiced disappointment at lacking improvements on the market.

"The mood amongst watch retailers seems to have deteriorated in recent months," Citi Research analyst Thomas Chauvet said in a note, blaming "subdued economic conditions, stock market and [currency] volatility, travel fears after several terrorist attacks in Europe and depressed oil prices".

The slump came as top Swiss watch market Hong Kong saw one of its sharpest downturns, slumping a full 37.7 per cent compared to March, a year earlier.

The Hong Kong watch market has steadily shrunk since the 2014 pro-democracy Umbrella protests chased away the wealthy Chinese tourists who previously travelled there in droves to purchase luxury timepieces.

And the strengthening Hong Kong dollar has since prompted them to look to other markets where prices are more attractive.

Exports to the United States, the second largest market for Swiss watches, meanwhile, fell 32.9 per cent in March.

And the market in China slumped 13.7 per cent, countering signs of a timid recovery seen at the end of last year.

After years of euphoric growth, the Chinese market took a major hit following a 2013 Beijing decision to crack down on corruption by banning extravagant gifts like expensive watches to public officials.

Germany was basically the only market bucking the downward trend last month, showing 2.2 per cent growth over March 2015, "which confirms the steady improvement in its situation", FHS said.

 

Japan, which had recently provided a small dose of optimism to the gloomy market, meanwhile disappointed, recording a 9.4 per cent drop in demand from a year earlier.

Workshop highlights halal food potential for Jordanian factories

By - Apr 20,2016 - Last updated at Apr 20,2016

Amman Chamber of Industry President Ziad Homsi (centre) presides over a workshop organised on Wednesday in Amman in cooperation with Gulf Halal Centre to introduce ‘Halal’ standard (Photo courtesy of ACI)

AMMAN — The value of halal food market in the world exceeds $650 billion, with  demand for it expected to increase by 20 per cent in the next years,  Amman Chamber of Industry (ACI) President Ziad Homsi said Wednesday. 

At the inauguration ceremony of a workshop ACI organised in cooperation with Gulf Halal Centre to introduce "Halal" standard, Homsi said that other halal sectors will be offered, such as medicines, tourism, Islamic fashion and cosmetics, according to an ACI statement. 

Halal food and products have become an international market for Muslims and non-Muslims, and many non-Muslim countries recognise this international consumption trend, he said.

The workshop is aimed at marketing halal products through enabling Jordanian factories to obtain all necessary certificates that help them develop their products and increase their exports, Homsi added.

Chief Islamic Justice Ahmad Hilayel highlighted the importance of issuing halal certificates from the Jordan Standards and Metrology Organisation (JSMO) in compliance with Sharia (Islamic law), and under the supervision of the Ifta Department. 

Hilayel praised the roles of ACI and JSMO in issuing the Halal Standard, reiterating the significance of benefiting from the experience of countries like Malaysia, Indonesia and the United Arab Emirates that already apply this standard, added the statement. 

 

JSMO Director General Haydar Zaben said the organisation had embarked on granting the certificate and logo of halal food, and issued regulations to provide the certificate from a neutral third party testifying that a product meets the requirements of Sharia and is free of Islam-prohibited ingredients.

Finance minister briefs US, IMF officials about challenges facing Jordan

By - Apr 20,2016 - Last updated at Apr 20,2016

AMMAN — Finance Minister Omar Malhas held talks with several US officials during the annual meetings of the International Monetary Fund (IMF) and the World Bank. Malhas discussed with US Secretary of State John Kerry the importance of the US initiative that aims at allowing 1.5 billion people around the world to use Internet by 2020 as a basic part of economic development.

Malhas also discussed with other officials the most important challenges facing the Kingdom and the proper means to support national economy. In meetings with US businesspeople and investors, the finance minister highlighted Jordan's safe and stable investment environment. At the end of the meetings, an agreement was reached to have a delegation from the IMF visit Jordan in May to officially discuss the details of the new programme with the fund.

Moreover, Malhas discussed with representatives of the financial affairs department in the IMF technical support that could be offered to the investment governance unit at the Planning and International Cooperation Ministry, in addition to support for reforming sales tax and customs fees. 

JIC chief highlights investment opportunities in Jordan to IKEA team

By - Apr 20,2016 - Last updated at Apr 20,2016

AMMAN – Jordan Investment Commission (JIC) President Thabet Al Wir Wednesday met with a delegation from the Swedish company IKEA, and briefed them on investment opportunities in the Kingdom, according to a JIC statement.

Al Wir underlined the importance of JIC achievements in enhancing the Jordanian investment in the international markets. He said JIC seeks to improve investment conditions, which stimulate development and to find solutions to challenges faced by investors.

The meeting included a detailed presentation about investment in Jordan, the targeted sectors and the features that the new investment law provides, in addition to success stories achieved by Jordanian companies' owners in the field of wood and furniture industry.

Planning minister highlights benefits of investing in Jordan

By - Apr 19,2016 - Last updated at Apr 19,2016

Minister of Planning and International Cooperation Imad Fakhoury (right) delivers a presentation on business opportunities in Jordan during the French-Jordanian Economic Forum in Amman on Tuesday that was attended by French President François Hollande (Photo courtesy of Planning Ministry and International Cooperation)

AMMAN – Minister of Planning and International Cooperation Imad Fakhoury on Tuesday briefed French President Francois Hollande and the accompanying delegation of businesspeople on what Jordan can offer to investors while working to turn challenges caused by the Syrian refugee crisis into economic opportunities. 

At a presentation during the French-Jordanian Economic Forum at the Jordan Chamber of Commerce, Fakhoury said the private sector could play an important role in the response plan to the Syrian refugee crisis by alleviating social problems in the region while creating economic gains for shareholders.

He called for building on what has to offer through its strategic location on world’s main trade route, preferential access to most global markets, productive and qualified labour force, favourable tax conditions, political and macroeconomic stability and long-term planning through the Jordan Vision 2025.

The minister said that Jordan has bilateral trade agreements with 38 countries, whose markets would absorb future goods.  

Pointing out to London conference on the Syrian crisis in February of this year, which acknowledged the importance of including Jordan into the EU value chain, Fakhoury said a 10-year agreement to grant Jordan simplified rules of origin status would support Jordanian products to reach the EU market in the short term and improve Jordan’s supply chain and national competiveness to be one of the EU reliable suppliers. 

Fakhoury said that Jordan can also play a major role in the reconstruction efforts in the region, adding that the Kingdom is home to productive and qualified human resources. 

He said that many multinational companies are already present in the Kingdom. 

He briefed the attendees on tax incentives for businesses, who he said would also enjoy extensive support from government. 

He underlined tax incentives in special economic zones, explaining that companies would enjoy a low income tax rate of only 5 per cent on all taxable incomes, zero sales tax on goods and services acquired by a registered enterprise, import duties of zero rate on all materials, instruments and machines used in establishing, constructing and equipping a registered enterprise and a zero rate on dividends tax on all income accrued within the zone or outside the Kingdom. 

Fakhoury said Jordan offers macroeconomic stability for exporters, and a political environment supportive of economic growth, pointing out to a stable and high economic growth of at least 2.5 per cent consistently over the past 15 years. 

There is a clear commitment to the private enterprise system, he said, noting that Jordan ranked 38th out of 178 countries in the economic freedom index. 

Fakhoury briefed them on Jordan Vision 2025, which is a 10-year economic blueprint that seeks to achieve a more resilient and prosperous Jordan, focusing on inclusive growth and improving economic competitiveness, investment climate, ease of doing business, self-reliance and entrepreneurship and innovation, based on nine economic clusters.

Chemical companies display products at Jordan exhibition

By - Apr 19,2016 - Last updated at Apr 19,2016

Industry, Trade and Supply Minister Maha Ali (centre) looks at a product of a firm exhibiting at the 6th Jordan International Exhibition for Chemical Industries on Tuesday (Petra photo)

AMMAN — The industrial sector contributes  24 per cent of the gross domestic product ( GDP), provides 200,000 to 250,000 jobs and constitutes some 90 per cent of the Jordanian exports, Industry, Trade and Supply Minister Maha Ali said Tuesday.

Deputising for Prime Minister Abdullah Ensour in inaugurating the 6th Jordan international exhibition for chemical industries, Ali noted that Jordanian chemical industries account for 22 per cent of the Kingdom's total industrial exports.

Jordan has achieved "big accomplishments" in the last 15 years, whereas the GDP grew from $8.5 billion in 2000 to $36.7 billion in 2015, with foreign investments in the Kingdom reaching $1.2 billion in 2015, the minister indicated.

She said the exhibition, being held at the Amman Motor Show, acquired a good reputation as an important economic annual event in Jordan, due to providing an opportunity for the local and international public and private sectors to discuss different economic issues.

Ali expressed the government's keenness to improve policies and laws aimed at enhancing the business and investment environment, and penetrating international markets of more than 1 billion consumers through free trade agreements the Kingdom signed with Arab countries, the US, Canada and the EU.

Khaldoun Nuseir, the chief executive officer of Afaq Group which is organising the three-day fair, said the event provides a good opportunity for participating businesspeople to exchange views and increase the investment and commercial cooperation among them.

 

A total of 140 companies, 83 of which are Egyptian,  are taking part in this year's exhibition, covering 8,000 square metres. The rest are Jordanian, Algerian, Tunisian, Saudi, Palestinian and Turkish firms.

Jordan Industrial Estate Co. promotes investment opportunities in Dubai

By - Apr 19,2016 - Last updated at Apr 19,2016

AMMAN — The Jordan Industrial Estate Company (JIEC) promoted investment opportunities available at its industrial estates to Arab and foreign heads of states and businesspeople during its Participation in Dubai's annual investment forum and exhibition, JIEC said on Tuesday.

During the forum, held last week, JIEC Chief Executive Jalal Al Debei met with several investors and businesspeople and briefed them on the Kingdom's secure investment environment. JIEC received applications to invest in industrial estates, Debei said, noting that the company will study them and contact investors.

JIEC officials held several bilateral meetings with economic delegations taking part in the forum and discussed cooperation opportunities in industrial estates. On the sidelines of the event, Debei met with Chinese businesspeople and reviewed the company's plans and investments available, in addition to discussing investment in the alternative energy sector.

Major steel producers fail to reach deal on overcapacity, US chides China

By - Apr 19,2016 - Last updated at Apr 19,2016

An employee unloads steel products at a market in Yichang, Hubei province, China, April 7 (Reuters photo)

BRUSSELS/BEIJING — China and other major steel-producing countries failed to agree measures to tackle a global steel crisis as the sides argued over the causes of overcapacity, prompting US criticism of Beijing's approach and an angry response from Chinese officials.

A meeting of ministers and trade officials from over 30 countries, hosted by Belgium and the Organisation for Economic Cooperation and development (OECD) on Monday, sought to tackle excess capacity, but concluded only that it had to be dealt with in a swift and structural way.

Washington pointed the finger at China over the failure of the talks, saying Beijing needed to act on overcapacity or face possible trade action from other countries.

"Unless China starts to take timely and concrete actions to reduce its excess production and capacity in industries including steel... the fundamental structural problems in the industry will remain and affected governments, including the United States, will have no alternatives other than trade action to avoid harm to their domestic industries and workers," US Secretary of Commerce Penny Pritzker and US Trade Representative Michael Froman said in a statement.

Asked what steps the Chinese government would take following the unsuccessful talks, China commerce ministry spokesman Shen Danyang told reporters on Tuesday: "China has already done more than enough. What more do you want us to do?"

"Steel is the food of industry, the food of economic development. At present, the major problem is that countries that need food have a poor appetite so it looks like there's too much food," he said.

The OECD indicated that global steelmaking capacity was 2.37 billion tonnes in 2015, but declining production meant that only 67.5 per cent of that was being used, down from 70.9 per cent in 2014.

Britain in particular has felt the squeeze as its largest producer Tata Steel has announced plans to pull out of the country, threatening 15,000 jobs. Last week, more than 40,000 German steel workers took to the streets to protest against dumping from China.

China, the world's top steel producer, has been ramping up exports of steel in recent years, as it battles to steer its economy into services-led growth and away from traditional manufacturing, while keeping employment levels high.

China's steel exports jumped 30 per cent from a year ago to 9.98 million tonnes in March despite a slew of anti-dumping measures globally.

But blaming China for woes in the global steel industry is simply a lazy excuse for protectionism, and such finger-pointing will be counter-productive, China's official Xinhua news agency said in a commentary on Monday.

"It's more been their competitive advantage into Asian countries which has really driven that rise in exports," indicated Daniel Hynes, a commodity strategist at ANZ Bank.  "I think that will continue and will keep those export levels relatively high despite the pressures we're seeing now."

Deep divisions

At a news conference following Monday's meeting, deep divisions between China and other producers were clear.

Cecelia Malmstrom, the European Union's (EU) trade commissioner, insisted governments should not grant subsidies that keep unviable plants running and should subject state-controlled firms to the same rules as the private sector.

China's assistant commerce minister, Zhang Ji, indicated that China had cut 90 million tonnes of capacity and had plans to reduce it by a further 100-150 million tonnes.

"That is only 10 million tonnes less than the capacity in Europe," he added, although critics say it would still have a capacity of around 1 billion tonnes, far in excess of its needs.

China's main iron and steel body has previously acknowledged that the flood of Chinese steel product exports is damaging to the country's efforts to gain market economy status from the EU, an important goal for Beijing as the domestic economy slows.

Li Xinchuang, the vice secretary of general of the China Iron and Steel Association, rejected the US criticisms.

"It is a totally pointless complaint from the US and it's biased against China," Li told Reuters by phone. "China's steel industry is market-based and Chinese steel products have good quality, low price and good service. The complaint on government subsidies is also crap."

Tensions have erupted between other producers, with Japan leading criticism of Indian minimum prices for imported steel at a recent World Trade Organisation meeting and Japan and South Korea coming under fire for exporting steel products cheaper than they sell them at home.

In a step by Beijing to reduce trade frictions with Washington, it has agreed to scrap some export subsidies on a range of products including steel, the United States said last week.

But there were signs the spat was spreading. The United Steelworkers (USW) said on Monday it has filed a case with US regulators seeking to stem a "flood" of aluminum imports the trade unions says have damaged US producers and threatened jobs.

 

The case is the latest move by the US aluminum industry to try and get authorities to investigate the impact of rising imports, particularly from China.

Ageing Israel accords harm Palestinian economy — World Bank

By - Apr 18,2016 - Last updated at Apr 18,2016

In this July 23, 2015, photo, two Palestinian boys stand outside a tent (background) watching workers rebuild a house which was destroyed during the 2014 summer war between Israel and Hamas, as the long-awaited reconstruction began in Shijaiyah neighbourhood, eastern Gaza City (AP photo)

OCCUPIED JERUSALEM — The Palestinian economy is losing hundreds of millions of dollars every year over outdated or insufficiently enforced fiscal agreements with Israel, a World Bank report said on Monday.

The lost revenue of $285 million annually was equivalent to 2.2 per cent of Palestinian gross domestic product (GDP), according to the report prepared ahead of the bi-annual meeting of the Ad Hoc Liaison Committee (AHLC) which coordinates international donor support for the Palestinians.

The Ramallah-based Palestinian Authority (PA) "suffers from substantial revenue losses under the current revenue sharing arrangements outlined by the Paris Protocol", the report said of the 1994 agreement which governs economic ties between Israel and the Palestinian territories.

It added that most of the losses are a result of "tax leakages on bilateral trade with Israel, in addition to undervaluation of Palestinian imports from third countries".

The World Bank also noted the handling fees Israel takes for imports en route to the Palestinians, which at the current rate of three per cent "significantly outstrips costs incurred by [Israel] to handle Palestinian imports", recommending that the rate be reduced to 0.6 per cent.

The World Bank said it could not quantify the losses to the PA because of a lack of access to Israeli data.

The Palestinian Authority has also so far failed to open a "dedicated fund" to receive $669 million in pension payments collected by the Israeli government for Palestinians working in Israel.

The World Bank noted recent meetings between Israeli and Palestinian finance ministers over the issues, and Israel's commitment to transfer $128 million to "offset some of the PA's losses", calling it "highly encouraging as a first step".

"Reviving the Israeli-Palestinian Joint Economic Committee, originally set to monitor implementation of the Paris Protocol and resolve outstanding issues, could significantly enhance economic and fiscal cooperation between the parties," it said in a statement.

Resolving outstanding financial "issues" between Israel and the Palestinians could not only "ease the PA's fiscal stress" and improve its economy but might even "facilitate progress on the political front", the report added.

The Israeli finance ministry said that it ensures that the Paris accords are implemented and has made reductions in its handling fees totalling around $21 million.

"We regret that the World Bank report gave an exaggerated and one-sided analysis of damage to the PA's revenues," it wrote in a response to AFP's query.

"The ministry of finance continues to maintain a positive dialogue with the Palestinian Authority intended for the benefit of both sides," it said.

Earlier this month, Israeli and Palestinian officials agreed to end several days of rolling blackouts in the occupied West Bank over what Israel says is some $450 million in arrears for electricity supplied by Israel.

The World Bank report was set to be presented to the AHLC on Tuesday in Brussels.

Separately, a new report released Monday by the World Bank shows that Qatar, the United Arab Emirates and other Arab donors have delivered only a small fraction of what was promised after Arab countries led the way in pledging reconstruction aid to Gaza, the seaside enclave devastated following Israel's war against militants in 2014.

The World Bank's report sends a stark message that donations are well behind the schedule set when pledges were made at an international conference in October 2014.

"Actual disbursements fall short of planned disbursements by around $1.3 billion, and hence, donors are urged to accelerate the disbursement of funds," the report said. 

If donor funding continues at the current pace, it added, pledges are expected to be complete by mid-2019, some two years behind schedule.

The fighting inflicted heavy damage on Gaza, damaging or destroying some 171,000 homes, according to UN figures. The Palestinians say 75,000 people remain homeless. Israel says Hamas is responsible for the damage, noting the group used residential neighbourhoods for cover as it fired rockets, triggering Israeli retaliation.

At the 2014 conference in Cairo, the international community pledged some $3.51 billion in aid over three years to rebuild Gaza. According to Monday's report, as of the end of March, $1.41 billion has been delivered, compared to $2.71 billion that should have arrived by now.

Qatar led the list of donors in 2014, pledging $1 billion. The energy-rich country's foreign minister at the time, Khalid Bin Mohammed Al Attiyah, denounced the "international silence" that surrounded Gaza's destruction.

"While the Palestinian people need financial support, they need more political support from the international community," he said at the time.

Yet a year and half later, Qatar has delivered only $152 million, or 15 per cent of what was promised, according to the World Bank.

Saudi Arabia, the number 2 donor, has delivered just over 10 per cent of the $500 million it pledged, while the UAE has sent just 15 per cent of the $200 million it promised and Kuwait has delivered none of the $200 million it pledged. 

Turkey, one of Hamas' closest allies, has delivered about one-third of the $200 million it pledged.

In Ankara, a Turkish foreign ministry official said that Turkish aid is expected to reach up to $250 million by the 2017 target date "and therefore to exceed the pledge that was made." The official spoke on condition of anonymity in line with government regulations.

Officials from the Gulf Arab countries were not immediately available for comment.

In contrast, the United States, the number 4 donor, has delivered all of the $277 million it pledged, while the European Union, the number 3 donor, has sent nearly three-quarters of the $348 million it promised, according to the figures. 

Individual European nations, including Norway, Switzerland, Germany and the UK have all sent most or all of the aid they pledged.

The international aid is meant to pass through the internationally recognised PA, bypassing Hamas. 

Last week, Palestinian Prime Minister Rami Hamdallah urged donor countries to "make good on their pledges." 

For years, the Palestinians, who rely heavily on donor aid to prop up their self-rule government, have complained that Arab allies have been slow in delivering promised assistance.

Hamas spokesman Sami Abu Zuhri urged donors to fulfill their pledges, warning that ongoing harsh conditions in Gaza could lead to renewed violence.

"Unfortunately, there are broken promises and betrayal from the donor parties in the reconstruction file," he said. "We call on all parties to honor their pledges because the situation in Gaza is catastrophic."

Donor aid is just one component of rescuing the embattled Palestinian economy, and in its report, the World Bank also took aim at Israel.

It said that an Israeli blockade imposed on Gaza after Hamas seized power in 2007, "continues to weigh on the economy". 

 

It also said that Egypt's closure of its border crossing with Gaza, the main gateway for people moving in and out of the territory, has "further exacerbated the situation".

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