After having experienced a modest recovery in 2003-05, the Palestinian economy suffered another decline in 2006, as a result of the domestic and international political difficulties. Although hard data are scarce, real GDP is estimated to have fallen within a range of 5 to 10 percent in 2006, less than initially had been feared, but still leaving average real per capita GDP at almost 40 percent below its 1999 level. Stronger-than-expected official and private inflows have helped prevent a much sharper decline in incomes and consumption in 2006, thus cushioning the overall contraction. But with a larger decline in investment, from an already low level, this also signals a further hollowing out of the Palestinian economy. Read more about Economic developments in 2006: A First Assessment
The World Bank circulated a new report on the Palestinian financial crisis. The report says that the crisis is worse than expected and it threatens to provoke a humanitarian crisis and the collapse of the Palestinian Authority. According to the report, 2006 is shaping up to be the worst year in recent times for Palestinians in the occupied Palestinian territories. The report follows the recent cut-off of financial aid to the Palestinian Authority. On Tuesday, Secretary-General Kofi Annan will host a high-level meeting on Tuesday of the diplomatic Quartet, the partnership of the United Nations, European Union (EU), Russia and the United States amid a potentially dangerous deterioration looming on the horizon. Read more about World Bank Report: "Palestinian crisis is worse than expected"
In recent weeks, both the Government of Israel (GOI) and donors have been considering a variety of economic responses to the outcome of the Palestinian Legislative Council (PLC) election of January 25, 2006, some of which are already under implementation. GOI has suspeneded the regular transfer of revenues which it collects on behalf of the PA; other forms of economic interaction at issue are Palestinian labor access to Israel, and the flow of imports and exports across Palestinian borders with Israel. Donors are planning to reduce various categories of foreign assistance. Read more about Economic Update: Westbank and Gaza
The World Bank approved a $42 million grant to assist the Palestinian Authority (PA) meet its immediate financing needs in the wake of a severe fiscal crisis to avoid suspension of vital basic services to the Palestinian population. The grant will be made through a multi-donor trust fund—the Public Financial Management Reform Trust Fund—launched in 2004, with support from international donors, to channel budgetary aid to the PA against progress in financial reforms. The EC, France, the Netherlands, New Zealand, Spain and the UK contributed to the current grant. The West Bank and Gaza continue to suffer from a debilitating economic recession brought on by restriction on movement of goods and people since September 2000. Read more about World Bank approves $42 million to Palestinian Authority to sustain public services for Palestinian people
Paul Wolfowitz, president of the World Bank, said yesterday that the Bank should continue delivering aid to the West Bank and Gaza in spite of last week’s electoral victory for Hamas, reports The Financial Times. The Bank chairs the committee of donors for the West Bank and Gaza, which disburses about $1bn a year. The EU, which is the largest single donor, recently suspended some of the aid that was funneled directly into the budget of the Palestinian Authority (PA) in protest at financial mismanagement. The PA’s fiscal situation has become increasingly unsustainable mainly as a result of uncontained government consumption, in particular a rapidly increasing public sector wage bill, expanding social transfer schemes and rising “net lending”. Read more about World Bank Chief Backs Continued Palestinian Aid
A group of Palestinian and Israeli private sector representatives presented today a joint Declaration at a Conference on “Promoting Economic Growth in the West Bank and Gaza through the Private Sector” in London. The conference was co-hosted by the World Bank and the United Kingdom Treasury. The Declaration identified priority areas, such as security, movement of goods, protection of investors, legal and regulatory reform and private sector participation in revitalizing the economy. The Working Group met for the first time last week in Jerusalem to discuss issues of common interest and develop a joint position on matters of economic development. Read more about A Palestinian-Israeli Joint Declaration unveiled at World Bank conference on Economic Growth
Secretary of State Condoleezza Rice announced the appointment of outgoing World Bank President James Wolfensohn to serve as special envoy on behalf of the Middle East Quartet to help coordinate Israel�s disengagement from Gaza and several West Bank settlements. “As Special Envoy for Gaza Disengagement, Mr. Wolfensohn will focus his efforts on two areas: first, Palestinian-Israeli coordination concerning the non-military aspects of the withdrawal, including the disposition of the assets that will be left behind; and second, the revival of the Palestinian economy in the wake of the withdrawal,” Rice said upon announcing Wolfensohn�s appointment April 14. Read more about Outgoing World Bank President to serve as special envoy Gaza plan
A disengagement plan that is accompanied by a rolling back of Israel’s closure policy and a stronger Palestinian commitment to reform will bring the Palestinian economy out of its present stagnation, according to a World Bank report released today. Titled Stagnation or Revival? Israeli Disengagement and Palestinian Economic Prospects, the report further asserts that only significant new efforts by both parties can justify a major increase in donor aid beyond existing levels. The report states for an economic recovery to be possible, Israel will need to roll back the security-related system of restrictions on the movement of people and goods imposed since the beginning of the intifada. Read more about World Bank: Little chance of economic revival without lifting closures
Four years since the outbreak of the intifada in September 2000, the Palestinian economy continues to be mired in deep recession, according to a World Bank report released today. The third in a series of reports that examine the impact of the socio-economic crisis in the West Bank and Gaza reveals that although the Palestinian economy recovered in 2003, this upturn is short-lived. The economy remains severely depressed compared with the pre-intifada period, with closures stifling economic activity and restricting the movement of people and goods. Read more about Worldbank: "Nearly half of Palestinian population lives in poverty"
The World Bank approved this week a grant of US$7.8 million to the Palestinian Authority to deal with the impending public health, safety, and environmental hazards stemming from the lack of proper treatment of wastewater in North Gaza. The North Gaza Emergency Sewage Treatment project is the fourth in a series of water and sanitation projects supported by the World Bank Trust Fund for Gaza and West Bank since 1993. Although 64 percent of the wastewater is collected in Gaza, most of it is not properly treated, contributing significantly to contamination of the coastal aquifer and seashore, including beaches. Read more about World Bank supports water and sanitation project in Gaza
