The World Bank is calling upon nations of the world to help the people of Palestine and upon Israel to improve relations with the Palestinian people. These calls come following data indicating that the Palestinian people are growing increasingly poor; a trend the World Bank believes could destabilize this population even further and spark off both conflict and a further humanitarian crisis.
The central bank governor of Palestine noted that the West Bank is undergoing tremendous economic damage in the wake of the Israeli decision to keep $130 million a month in Palestinian income. This comes on the heels of Palestinians joining the International Criminal Court, which may charge Israel with war crimes.
U.S. Secretary of State John Kerry on Sunday outlined a $4 billion private investment plan to spur growth in the West Bank, saying it could transform the lives of people, but acknowledged the benefits could not fully materialise unless supported by a moment towards peace between Israel and the Palestinians.
Arab League foreign ministers have unanimously agreed to send at least $100 million in monthly aid to the Palestinian Authority (PA) starting later this year, reported Al Jazeera on Sunday, after Israel declared last week that it would be withholding tax receipts to the PA in response to Palestine’s bid for statehood.
The Gaza Strip, bordering Egypt and Israel, may be practically ‘unliveable’ by 2020, said a report by the United Nations this week, with nearly 2.1 million expected to be displaced due to lack of improvement in water, power, health, education and sanitation facilities.
The report, entitled “Gaza in 2020: A liveable place?” claimed that the region’s basic infrastructure was “struggling to keep pace with a growing population,” after an Israeli blockade had left the area “essentially isolated since 2005.”
The Palestinian economy will be unsustainable if the nation achieves statehood in the near future, said the World Bank on Wednesday, with foreign aid still seen as the only reason behind the Palestinian Authority’s (PA) present survival.
“While the Palestinian Authority has had considerable success in building the institutions of a future state, it has made less progress in developing a sustainable economic base,” wrote the 181-page report, which examined Palestine’s economic growth since the PA was founded in 1994 under the Oslo Accords.
The International Monetary Fund (IMF) has turned down an appeal from Israel for $1 billion in bridge loan funding to the Palestinian Authority (PA) government, reported the Times of Israel on Monday, after claiming that it did not wish to set a precedent of non-state entities receiving loans by proxy.
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Forecasting what will happen with the economy of the Palestinian Territories of the West Bank and Gaza is amongst the most demanding challenges than an economist can face.
It may in fact be easier for geopolitical and military analyst to make.
That is because the economic fortunes of Palestine depend first and foremost on whether a Palestinian state is actually created, under the auspices of the now stalled ‘Two State’ peace process with Israel, and secondly on what the final border, security and logistics arrangements that state will be permitted to have.
The Palestinian economy is built around agriculture and small scale industries. The economy relies on Israel, which controls all movement of goods, services, people and finances into and out of the Palestinian terroritories. Jordan is the key re-export market after goods transit through Israel.
Palestine exports hard commodities (27 percent), fruits and vegetables (9 percent), iron and steel (5 percent), furniture (5 percent), footwear (5 percent), tobacco (5 percent), wood (3 percent), vehicles (3 percent) and fertilizer (3 percent).
