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On West Bank, Palestinian Consumers Taking Large Loans for Luxury Items

(Al-Jazeera) Dalia Hatuqa - Today some West Bank cities are overrun with flashy new cars and middle-class Palestinians are up to their ears in personal debt, courtesy of easy-to-receive mortgages and consumer loans made available in recent years. Economists attribute this new culture of debt dependency to an increase in consumer credit and the pouring in of donor cash. Since the Oslo Accords were signed two decades ago, Palestinians have been given $4 billion worth of assistance by the U.S. government, in addition to hand-outs from Europe, Gulf countries, Japan and others, making them "among the world's largest per capita recipients of international foreign aid." Banks that give out mortgage loans are particularly vulnerable "because there is no mechanism in place to ensure that the financial institutions can foreclose on property when homebuyers cannot meet their mortgage payments," said Basem Makhoul, an economist. "There has never been one case of a foreclosure in Palestine." "Consumerism has taken over the West Bank, which is something that doesn't go with the low income levels here," Makhoul said. "It's like that saying: 'We have the salaries of Somalia but we spend like we live in France.'...Obviously it's the donor money that has precipitated this phenomenon."
2013-09-17 00:00:00
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