The Palestinian Gross Domestic Product in the West Bank could increase by at
least 35 percent, $3.4 billion annually, if Israel lifted its restrictions on
Palestinian access and movement in Area C, the World Bank said in a report it is
issuing on Tuesday morning.
“Access to Area C will go a long way to
solving Palestinian economic problems,” said Mariam Sherman, the outgoing World
Bank Country Director for the Palestinian territories.
is bleak. Without the ability to utilize the potential of Area C, the
economic space will remain fragmented and stunted. Lifting multiple restrictions
could transform the economy and substantially improve prospects for sustained
growth,” she said.
The World Bank report “Area C and the future of the
Palestinian economy,” said that Israel had put those restrictions in place out
of security concerns, but did not offer any alternative suggestions.
key to Palestinian prosperity continues to lie in the removal of these
restrictions with due regard for Israeli security,” the report said.
report focused on an analysis of the problems and the steps needed to increase
private sector productivity in agriculture, tourism, telecommunications,
construction, quarrying and mining Dead Sea minerals.
Agriculture and the
Dead Sea offer Palestinians the most economic growth potential for the private
sector, the report said.
The bulk of farmland in Area C belongs to
Palestinians, 32,640 hectares, compared with 18,700 hectares that are attached
to Israeli settlements, the report said.
But Palestinians lack the water
necessary to irrigate the land and to maximize its use for agriculture
production, the report said.
Under the terms of the Oslo Accords,
Palestinians are allocated 135.5 MCM annually, or 20% of estimated availability,
instead of the needed 189 MCM, the report said.
If they had accessibility
and the resources to fully farm their land, Palestinians could add $704 million
annually into the their economy, the equivalent of 7% of their GDP in 2011,
according to the report.
Palestinians could bring $918m., 9% of their GDP
in 2011, into their economy annually if they could harvest minerals such as
potash and bromine from the Dead Sea as Israel and Jordan do, the report
These two countries earn $4.2b. in yearly sales, which account for
6% of the world’s potash supply and 73% of the global bromine output, the report
The Palestinian tourism industry could receive a boost of $126m.
annually or 1% of the 2011 GDP, if it could create Dead Sea hotel complexes
comparable with what Israel has, the report said.
The Palestinian stone
mining and quarrying industry could double its economic output, if Israel would
grant it permits to open new quarries, the report said.
telecommunications industry’s two operators, need 3G access, the report
Increasing the GDP would decrease unemployment and increase tax
revenues for the PA, thereby making it less dependent on donor funding, the
For the construction industry, building permits are needed
and land needs to be made available for such building, the report
The report explained that most of the West Bank’s natural resources
and the land for agriculture and development are located in Area C of the West
Bank, which is under Israeli military and civil control.
Some 6.6% of the
Palestinian population or 180,000 people live in Area C of the West Bank,
according to the report. Most of the Palestinians in the West Bank live in Areas
A and B.
The initial flush of Palestinian economic growth in the first
years of Prime Minister Binyamin Netanyahu’s second term as prime minister,
dropped because his gestures failed to revive private business, leaving the PA
to continue its heavy reliance on donor funding, the report said.
2012, the report said, “foreign budget support had declined by more than half,
and GDP growth has fallen from 9% in 2008- 11 to 5.9% by 2012 and to 1.9% in the
first half of 2013 (with negative growth of –0.1% in the West Bank).”