Development of Area C is necessary for sustainable Palestinian economic growth, the World Bank said in a report it published Wednesday calling for donor countries to pledge $400 million to fix a shortfall in the PA’s 2012 budget when the Ad Hoc Liaison Committee meets in New York on September 23.

“Donors do need to act urgently in the face of a serious fiscal crisis facing the PA in the short term,” World Bank Country Director for the West Bank and Gaza Mariam Sherman.

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“But even with this financial support, sustainable economic growth cannot be achieved without a removal of the barriers preventing private sector development, particularly in Area C,” she said.

According to the report, the Palestinian Authority is projected to have a $1.5 billion deficit by the end of 2012, for which only $1.1 b. has been raised from donor countries.

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