Palestinian Authority needs urgent economic aid – World Bank

Children play near a damaged building in Gaza. The World Bank is urging donors to fulfill their aid pledges to the Palestinian Authority. Photo by: Natalia Cieslik / World Bank / CC BY-NC-ND

The World Bank is urging donors to fulfill their aid pledges to the Palestinian Authority to help mitigate the deepening economic crisis in the West Bank.

In a report released ahead of a Palestinian aid summit next week, the World Bank said donors have so far provided only half of the funds the Palestinian Authority requires to fill the $1.1 billion gap in its 2012 budget. The bank also forecasted gross domestic product growth in the Palestinian territories to drop 0.8 percentage points to 5 percent this year, Reuters reports. This is despite Palestinian Prime Minister Salam Fayyad’s efforts to generate more revenue by raising income tax rates, among other measures.

Donors need to meet their commitments to help stabilize the economy, if only in the short term, Mariam Sherman, the World Bank’s director for the West Bank and the Gaza Strip, said. As for long-term economic development, she stressed the importance of supporting the local private sector, especially in the areas of agriculture, housing, tourism and infrastructure.

“There is a lot of energy and resourcefulness in the Palestinian private sector which is the longer-term path out of crisis mode towards sustainable economic growth,” Sherman said, according to Reuters.

Meanwhile, Finland’s Under-Secretary of State Anne Sipiläinen said the country has, on March 14, renewed its commitment to support the Palestinian Authority’s efforts in the education, land and water sectors.

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About the author

  • Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.