Currently Israeli Currency is primary method of payment in the Gaza Strip. After the Israeli pullout is completed, will Palestine be issuing their own currency? They already issue their own stamps. My guess is that they will not have the infrastructure or minting facilities and will be forced to continue using Israeli Shekels. Could the de-shekeling of the Palestinian Authority have a negative affect on the Shekel Value or would it be negligible.
Negligible, I think. The strength of the shekel, and any currency, comes from the confidence the citizens of that nation have in the currency, and the products they produce. As far as I know, little that strengthens the shekel is produced in the Palestinian territories. In line with that thinking, how strong could a prospective Palestinian currency be? How much confidence would the average Palestinian on the street have in it, and what would a Palestinian economy produce?
They could back their currency with some of the billions stashed away in secret swiss accounts. Pretty sad, none of the other Friendly Islamic nations would help them out.
I don't think a Palestinian currency backed by hard currency holdings would really work in the long (or even medium) term. And only maybe in the short term. Eventually, those holdings would have to be spent. And that would have to be (if they wanted a stable "country") on building industry, infrastructure, that sort of thing. And they're not starting from zero. They'd have to clean up the mess that was already there. It would be a race to get what they're trying to build finished before the hard currency runs out. And I don't think it's a race winnable at present for the Palestinians. The UK ran into a similar problem at the end of the Second World War. US Lend-Lease allowed the entirety of British industry to be dedicated to the war effort. When Lend-Lease was cut off suddenly (whether that was fair or not is open to debate), the British had an economy totally dedicated to war production, and no war to fight. They had to rebuild and rededicate industry for civilian needs, and they didn't have the hard currency necessary to do it. They only way they could get the hard currency was to export more than they imported. To lower imports (and thus prevent too many needed dollars from going to pay for those imports) required the continuation of rationing into the 1950s. And Britain was a stable, albeit exhausted, nation in 1945. At the present, I don't see any Palestinian state as stable. Exhausted, certainly, but not stable.
The Gaza strip occupies 139 square miles and is slightly larger than Queens, NYC (109 sq. miles) The West Bank accounts for about 2800 square miles of the total territory and is smaller than Delaware, although it's about three times the size of Luxembourg (1000 square miles) That there haven't been any symbolic issues, like they have from Monaco or the Vatican, is a bit of a mystery. They should have made some long ago in a friendly Arab mint. Sure, there have been microstates that have their own circulating currency, Monaco, Hong Kong, Singhapore and the like, but they had major robust economies, and the notes were issued by private banks in the latter two. Gaza is a very different story. The Palestinians have been robbing their people blind, the infostructure is in complete disrepair, as the PA launched a full scale war on Israel, which it lost, and most of the money went to arms dealers and secret bank accounts [half of all foriegn aid was stolen]. A teensy weensy microstate ruled by incompetant kleptocrats. I don't think it could issue it's own currency it it tried. BTW, the Israeli withdrawl from Palestine will NEVER be completed. Why? Because the people who use the term "Palestine" in this case beleive that it includes Israel proper as well. Every inch, including Tel Aviv.
It will take years for the shekel to leave Palestinian territories, since as prevouisly said they do not have the infrastructure to support an independent economy for a long time, even when they are able to produce their own currency, it will still be pegged to the shekel (or euro). Anyways what I am getting to is I think that any change would be negligible, since everybody will see it comming and would be able to react appropriately.
It's not going to be easy for the Palastines to start producing anything like currency when all they have been good at is producing are suicide bomb devices.
Agreed- In the past both Jordan and Egypt have produced stamps, some counterstamped "PALESTINE", for use by the palestinians. Currently the palestinian authority produces stamps denominated by Jodanian Fils and not the new Israeli Shekel. I wonder if Jordan backs their Postal Service. If Palestine ever does issue it's own coins, I will not be a collector. I do not want any of my money in their coffers. That would be like funding terrorism. Mike
I would think that as long as Palestines work in Israel and as long as they are paid in Shekels that will be as long as the shekel would be used in Palestine. I would also think that the Gaza like most of the middle east will be a place where more then one currency floats. I would not be surprised if the tourist industry there makes it easy for tourists from Europe pay in Euro's and tourists from the United States pay in dollars. But none of this may matter in the future for Iran already has the silk worm missles from North Korea which got the technology from China which was given the technology mainly from the Clinton Adminstration to deliver an accurate payload of pain and since the rulers of Iran could care less for Sunnis or Christians or Jews that whole area may be ablazed if things don't change.
The Palestinian stamps are actually denominated in Jordanian currency - 1,000 Fils = 1 Dinar,which is the same system in use in Iraq. Aidan.
