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World Bank calls on donors to continue support for Palestinian Authority

The World Bank has launched an appeal to its member states urging them to address the fiscal crisis afflicting the Palestinian Authority in the occupied West Bank as a matter of urgency.

According to a report published by the World Bank on Wednesday, the Palestinian Authority faces a dangerous situation in its public finances in light of the raised budget deficit which exceeds the expected level, along with large debt to the local banking sector. Such a position will reduce the PA's opportunities for getting more credit from the private sector, it is claimed.

The report – "Public fiscal crisis: the economic outlook and the urgent need for economic interdependence between the Palestinian territories" – highlights the devastating economic situation in the occupied Palestinian territories, and stresses the importance of exploiting natural resources as the basis for growth in key sectors of the Palestinian economy.


The World Bank has emphasised the importance of so-called Area C, over which the Israeli occupation authorities have full civil and security control, but which is the only sector of the occupied West Bank which is contiguous, well populated and with plenty of agricultural land and natural resources. The report suggests that in order to facilitate access to Area C the bank should play a major role in the development of businesses in construction, telecommunications, agriculture and tourism in order to kick-start the Palestinian economy.

The World Bank called on donor countries to continue their support for the Palestinian Authority's budget to enable it to implement key reforms to raise domestic revenue levels and control spending.

The report will be discussed at the forum for aid donors to the PA in New York on the 23rd September. The agenda will include a call to the Israeli authorities to remove obstacles and constraints resulting directly from the isolation of Palestinian areas from each other by the Separation Wall, settlements and settler-only roads, which result in investment restrictions, higher costs and hindered economic interdependence.

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