1999. Recovery was upended in the last quarter of 2000 with the
outbreak of violence, which triggered tight Israeli closures of
Palestinian self-rule areas and severely disrupted trade and labor
movements. In 2001, and even more severely in 2002, Israeli military
measures in Palestinian Authority areas resulted in the destruction
of much capital plant and administrative structure, widespread
business closures, and a sharp drop in GDP. Including Gaza Strip,
the UN estimates that more than 100,000 Palestinians out of the
125,000 who used to work in Israel, in Israeli settlements, or in
joint industrial zones have lost their jobs. In addition, about
80,000 Palestinian workers inside the Territories are losing their
jobs. International aid of $2 billion in 2001-02 to the West Bank
and Gaza Strip prevented the complete collapse of the economy. In
2004, on-going border issues and the death of Yasser ARAFAT
continued to complicate the economic situation.

Western Sahara
Western Sahara depends on pastoral nomadism, fishing,
and phosphate mining as the principal sources of income for the
population. The territory lacks sufficient rainfall for sustainable
agricultural production, and most of the food for the urban
population must be imported. All trade and other economic activities
are controlled by the Moroccan Government. Moroccan energy interests
in 2001 signed contracts to explore for oil off the coast of Western
Sahara, which has angered the Polisario. Incomes and standards of
living in Western Sahara are substantially below the Moroccan level.

World
Global output rose by 3.7% in 2003, led by China (9.1%), India
(7.6%), and Russia (7.3%). The other 14 successor nations of the
USSR and the other old Warsaw Pact nations again experienced widely
divergent growth rates; the three Baltic nations continued as strong
performers, in the 5%-7% range of growth. Growth results posted by
the major industrial countries varied from a loss by Germany (-0.1%)
to a strong gain by the United States (3.1%). The developing nations
also varied in their growth results, with many countries facing
population increases that erode gains in output. Externally, the
nation-state, as a bedrock economic-political institution, is
steadily losing control over international flows of people, goods,
funds, and technology. Internally, the central government often
finds its control o