Economic growth in Gaza's economy - Update

The GDP in the Gaza Strip has increased more than 30% compared to last year,
and the unemployment rate is the lowest recorded in the past 10 years.

(Communicated by Coordinator of Government Activities in the Territories -
COGAT)

As a result of Israel's civil policy that distinguishes between the civilian
population and the terror organization Hamas, the GDP in the Gaza Strip has
increased more than 30% compared to last year, and the unemployment rate is
the lowest recorded in the past 10 years.

Trade

During the first nine months of 2011, an average of 4,497 truckloads entered
the Gaza Strip per month - an increase of 96% compared to 2010.

Exports

- Agricultural goods:

1. Professional meetings, with the participation of Palestinian farmers
from the Gaza Strip and relevant representatives from the international
community, were held to explain the export mechanism, and the bureaucratic
procedures in the CLA (Coordination and Liaison Administration) and in the
Land Crossing Authority were shortened.

2. The export of agricultural goods from the Gaza Strip began on
November 27, 2011.

- The export of textiles from the Gaza Strip to overseas markets was
approved.
- Although the export of furniture was approved and the required
coordination carried out, the furniture factory caught on fire and burned
down on November 14.

Projects

Of the 176 projects approved in the Gaza Strip, 35 have been completed, 70
are under implementation and 63 are awaiting tenders, the purchase of
materials, etc. Eight projects were canceled by the international community.

Project Areas

Main Projects:

1. Housing - 1,918 housing units will be rehabilitated or built under
the framework of 12 different projects. Four of these have already been
completed; the other 8 are under implementation.

2. Health - Israel has approved the upgrade of 6 hospitals and the
construction and rehabilitation of 7 new clinics. One project has been
completed, others are under implementation.

3. Education - 57 new schools and kindergartens will be rehabilitated or
built in the Gaza Strip in 64 different projects. Seven of them have been
completed.

4. Water and sewage - 27 infrastructure projects were approved,
including construction or rehabilitation of waste water treatment plants
such as in Sech Ajlin and the northern WTP. Six projects have been
completed.

5. Agriculture - 18 agriculture projects were approved; five of them
have been completed. The projects approved include building hothouses,
cooling rooms for fruits and vegetables, rehabilitating farm lands, wells
and water reservoirs, and others.

Transfer of construction materials for the private sector

The transfer of raw materials to ten factories owned by the private sector
in the Gaza Strip has been approved according to the proper controlling
mechanism that Israel and the international community agreed upon. On
November 15, 2011 the first shipment of equipment was delivered.

Movement of people

1. Every day 100 business persons are allowed to cross from the Gaza
Strip into Israel.

2. Thousands of Palestinians cross the border for medical treatment in
Israel.

3. Professionals and experts exit the Gaza Strip on a daily basis, in
order to participate in conventions and conferences.

4. People exit the Gaza Strip for religious worship and in order to
visit religious sites in Israel and abroad.

Water

Israel has approved an increase of the water quota transferred from Israel
to the Gaza Strip, 3 million cubic meters in addition to the 5 million cubic
meters transferred today to the Gaza Strip.

Electricity

Israel supports and assists UNDP in transferring equipment to the Gaza Strip
in order to upgrade its self-production of electricity in the power stations
in the Gaza Strip by building a transformer farm adjacent to the power
station. The transformer farm will increase the energy production from 60
watts to 100-110 watts per day.

GDP and growth

The GDP in the Gaza Strip in Q2 of 2011 was 426 million dollars, an increase
of 30.7% compared to the same period the previous year (the GDP per capita
increased 26.4%).

The construction sector is responsible for over 43% of the growth in the GDP
in the Gaza Strip in the time period between Q2 in 2010 and Q2 in 2011, and
the services and agriculture sectors are responsible for 15% and 14% of the
growth, respectively.

Employment

During Q2 of 2011, the unemployment rate dropped to its lowest rate in the
last decade, 25%. The number of employees in the construction sector grew by
4,500 people during Q2 of 2011.