The recent conflict and the governance crisis in the West Bank and Gaza have thrown the Palestinian economy once again into a state of uncertainty. On March 2, foreign leaders gathered at an international donors' conference in Egypt to support the reconstruction of the Gaza Strip, reiterating their commitment to a durable peace solution based on a viable Palestinian state and economy. U.S. Secretary of State Hillary Clinton affirmed: "a child growing up in Gaza without shelter, health care, or an education has the same right to go to school, see a doctor, and live with a roof over her head as a child growing up in your country or mine."
Yet to translate such declarations into action, policymakers will need to look beyond today's urgent demands for humanitarian and reconstruction assistance and recognize the importance of another trend: the Palestinian economy is increasingly fragmented, and the weakening economy is coinciding with strong demographic pressures driven by a youth bulge. In this context, how will young Palestinians attain the basic levels of economic security and prosperity that are enjoyed by their peers in developed countries? To answer this question, it is worth examining the main demographic and structural challenges that will face the Palestinian economy for the foreseeable future