The World Bank approved a new four-year strategy for Palestine that puts emphasis on protecting lives and creating new job opportunities for Palestinians amid the coronavirus pandemic.
The Palestinian economy is projected to grow by only 3.7 per cent annually between now and 2025, according to a new UN study, as the COVID-19 pandemic continues to limit economic recovery and growth globally.
The forecast is based on new model simulations that show that the pandemic will have a significant impact on the Palestinian economy, already shattered by restrictions and leakage of fiscal resources due to the Israeli occupation.
"Due to the persisting fragile context, exacerbated by the Covid-19 pandemic, resilience strengthening is needed immediately," said Kanthan Shankar, World Bank country director for West Bank and Gaza. "The new World Bank strategy will act to protect lives and livelihoods and put the jobs agenda at the forefront of its strategy."
Palestinian Gross Domestic Product (GDP) declined by 12 per cent in 2020 compared to 2019 as a result of the coronavirus pandemic.
The Palestinian Monetary Authority and the Palestinian Bureau of Statistics said that most economic activities shrunk last year, which led to a significant decrease in the per capita income.
The World Bank also said the government's fiscal deficit is over $1 billion after aid – the highest in years – and the declining government revenues "depresses investment and squeezes out urgent spending."
"The programme will continue to strengthen the Palestinian resilience in times of crisis and provide relief and recovery, including through the emergency social protection and cash-for-work programmes," it said.
More than 66,000 employees lost their jobs last year, leading to an increase in the unemployment rate which reached 27.8 per cent.
The total number of employees in the labour market dropped from 951,000 in 2019 to 884,00 in 2020.
"The social response will aim to enhance workforce resilience and capability for better employment through improving quality of education and health. It will increase its support to SMEs and start-ups for job retention and business continuity."
"More than 36 per cent of youth are unemployed in the Palestinian territories, particularly high in Gaza with 66 per cent and as high as 91 per cent for women," added Kanthan. "The new strategy sees the digital economy as a means of securing significant economic opportunities for young people and leading to a more engaged society."