Stagnation or Revival? : Palestinian Economic Prospects
This report begins by documenting the Palestinian Authority's (PA's) ongoing fiscal crisis that threatens its ability to provide basic services to the population. In 2011, the PA required about US$1.5 billion dollars in budget support, of...
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| Format: | Report |
| Language: | English en_US |
| Published: |
Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/947221468321846641/Stagnation-or-revival-Palestinian-economic-prospects-economic-monitoring-report-to-the-Ad-Hoc-Liaison-Committee http://hdl.handle.net/10986/27153 |
| Summary: | This report begins by documenting the
Palestinian Authority's (PA's) ongoing fiscal
crisis that threatens its ability to provide basic services
to the population. In 2011, the PA required about US$1.5
billion dollars in budget support, of which US$200 million
to cover development expenses not funded directly by donors.
However, it only received about US$814 million in budget
support and US$169 million in development financing, for a
total of US$983 million. Ultimately, the PA can only hope to
achieve fiscal sustainability through a combination of
sustained private sector growth and continued internal
reforms. Robust private sector growth is necessary for the
PA to generate the revenues needed to sustain service
delivery. Yet the private sector remains stifled as a result
of Israeli restrictions on access to natural resources and
markets. The West Bank has experienced a slowdown in
economic growth in 2011, combined with double-digit growth
in Gaza. The recovery in Gaza can be attributed to a
combination of aid inflows and easing of restrictions on
entry of goods from Israel-though it is important to keep in
mind that the average Gaza today is worse off than s/he was
back in the late nineties. The recent growth in Gaza is also
driven largely by a boom in the construction sector, and
Gaza infrastructure exhibits such gaps and disrepair that
major investments are necessary and would generate important
employment as well as future growth. The slowdown in growth
in the West Bank, on the other hand, is the result of
falling donor support, uncertainty caused by the PA's
fiscal crisis, and lack of significant new easing of
restrictions by the Government of Israel (GoI). |
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