c conditions since the second intifadah began in September
2000. The downturn has been largely the result of Israeli closure
policies - the imposition of border closures in response to security
incidents in Israel - which disrupted labor and trading
relationships. In 2001, and even more severely in 2002, Israeli
military measures in PA areas resulted in the destruction of
capital, the disruption of administrative structures, and widespread
business closures. International aid of at least $1.14 billion to
the West Bank and Gaza Strip in 2004 prevented the complete collapse
of the economy and allowed some reforms in the government's
financial operations. In 2005, high unemployment and limited trade
opportunities - due to continued closures both within the West Bank
and externally - stymied growth. Israel's and the international
community's financial embargo of the PA since HAMAS took office in
March 2006 has interrupted the provision of PA social services and
the payment of PA salaries.

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. Incomes in Western Sahara are
substantially below the Moroccan level. The Moroccan Government
controls all trade and other economic activities in Western Sahara.
Morocco and the European Union signed a four-year agreement in July
2006 allowing European vessels to fish off the coast of Morocco,
including the disputed waters off the coast of Western Sahara.
Moroccan energy interests in 2001 signed contracts to explore for
oil off the coast of Western Sahara, which has angered the
Polisario. However, in 2006, the Polisario awarded similar
exploration licenses in the disputed territory, which would come
into force if Morocco and the Polisario resolve their dispute over
Western Sahara.

World
Global output rose by 4.4% in 2005, led by China (9.3%), India
(7.6%), and Russia (5.9%). 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 7% range of growth. Growth results posted by the
major industrial countries varied from no gain for Italy to a st