world bank 88.
(photo credit: )
The World Bank Board on Thursday approved an additional $40 million grant for
budget support to the Palestinian Authority.
The development institution
also delivered a stark warning about the sustainability of growth in the West
Bank and Gaza Strip in its latest report to the Ad Hoc Liaison Committee donor
The report, released ahead of the AHLC meeting scheduled for
September 21 in New York, emphasizes the need for strong institutions and
private sector-led growth to underpin any future Palestinian state.
also also applauds the efforts of the PA in institutionbuilding and delivery of
public services. Starkly missing, however, says the report, is the sustainable
economic growth required for the PA to reduce its donor dependence.
commend the Palestinian Authority for recent results under its reform agenda,”
said Shamshad Akhtar, vice president of the Middle East and North Africa
“These include increased efficiency of the social safety net
system that is now one of the most advanced in the region, improved fiscal
standing through greater revenue collections and a decrease in recurrent
expenditures and an improved security situation in the West Bank.”
West Bank and Gaza Strip economy continued to grow in the first half of 2010 and
is likely to reach 8% growth this year.
But external financial aid is its
primary driver. Private investment, particularly in the productive sectors, has
yet to increase significantly.
This is attributed to important Israeli
restrictions still in place: exports from Gaza remain prohibited; access to the
majority of the West Bank’s land and water is severely curtailed; east Jerusalem
markets are beyond reach; the ability of investors to enter Israel and the West
Bank and Gaza is unpredictable; and many critical raw materials to the
productive sectors are classified as “dualuse” (civilian and military) and their
import entails the navigation of complex procedures, generating delays and
significantly increasing costs.
“Action can, and should be taken to
remove the remaining obstacles to Palestinian private sector development,” said
Mariam Sherman, World Bank Country Director for the West Bank and
“Our analysis highlights important areas holding back private
investment and we hope our work in this report can provide some momentum to
address these challenging – but surmountable – issues.
economic growth will not be sustainable growth, the PA will remain donor
dependent and its institutions, no matter how robust, will be unable to underpin
a viable state.”
The $40m. grant will bring to $120m. the World Bank’s
budget support to the Palestinian Reform and Development plan, which
building the fundamental blocks of the future state.
“This new grant will
specifically support areas critical to a stable financial environment,”
John Nasir, Lead Economist for the West Bank and Gaza Country
“This includes the government’s fiscal position and its
transparency and accountability.”