Palestine - International Balance of Payment before Nakba, for the years of 1945 And 1946, British Mandate: A Survey of Palestine: Supplement - Page 64

PALESTINE-INTERNATIONAL BALANCE OF PAYMENTS, 1945 AND 1946.

During the period of the Mandate, Palestine has always had a substantial adverse balance of trade. The adverse balance of recorded trade has varied from just over £P.4 million in 1922 to well over £P.46 million in 10'16. This continuous adverse balance has not had the results which would normally be expected. viz:-a continuous reduction in the standard of life or a piling-up of foreign debts. On the contrary, Palestine has managed not only to reduce its comparatively small public foreign debt from £P.4.5 million to £P.3.6 million in 1942 by means of a conversion operation, but also to build up in recent years large assets abroad, mainly in the U .K., estimated to have reached in December, 1946 the net sum of £P.135,000,000. As for the standard of life, war restrictions had their unfavourable effects, but on the whole there is sufficient evidence that for people in the lower income groups and in the agricultural community there has been substantial improvement in recent years.

2. The explanation for this phenomenon is to be found in the annual statements of Palestine's international balance of payments compiled for the years l!l4 5 and 1946 and presented in the attached table. As yet, these statements must be regarded as first approximations. For the less important of the invisible items, only rough estimates could be made in the absence of precise figures.

3. The data of the table indicate in an approximate way the main contributories to the flow of funds to and from Palestine as well as their respective magnitudes. They are also an essential aid to the understanding of the complex and unique pattern of Palestine's external trade, finance and economic conditions generally.

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