In an environment of protracted uncertainty which impacts economic growth and the well-being of citizens, the World Bank’s strategy for assistance to West Bank and Gaza for the next two years aims to support private sector led-growth and strengthen public institutions.
The World Bank’s Board of Directors today endorsed the Interim Strategy Note for West Bank and Gaza that outlines the direction of assistance from 2012 – 2014. Simultaneously, the Board of Directors agreed to advise the Board of Governors to authorize a replenishment of US$55 million to the Trust Fund for Gaza and the West Bank, from which the Bank’s assistance is provided.
Consistent with recent commitments, the Bank’s support will continue to focus on strengthening the institutions of a future Palestinian state to efficiently manage public finances while ensuring services to citizens. To help accelerate much-needed growth, the World Bank group institutions, including also the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) will work closely to help create an enabling environment for private sector-led growth which will remain a central platform of the Bank’s approach. Financial independence, local government empowerment, poverty reduction and economically sustainable infrastructure development are all themes to underpin this strategy and are in line with the Palestinian National Development Plan for 2011-2013.
“The Palestinian fiscal situation appears to be worsening despite efforts to reduce expenditures and increase revenues. This is linked to the system of restrictions on access to land, water and export markets which imposes economic costs and constrains private sector growth,” said Mariam Sherman, World Bank Country Director for West Bank and Gaza. “We are supporting the authorities as they build institutions and deliver services to citizens but this must be coupled with measures to develop longer-term opportunities to unleash the vibrant Palestinian entrepreneurial spirit.”
The strategy builds on the World Bank’s existing development projects in higher education, energy, land administration, water and sanitation, and solid waste management and adds new ones in response to needs identified with the Palestinians. The Bank will also continue to provide budget support aimed at fiscal strengthening and public financial management. As in the past, Bank support to municipalities and NGOs continues as this has been instrumental in helping these critical organizations that are close to communities strengthen institutionally and improve service delivery. The new strategy promotes a capable workforce and introduces new projects to support the invigoration of the private sector and the school-to-work transition for young Palestinians.
The Interim Strategy was prepared jointly with the IFC, the private sector arm of the World Bank. In the context of this new strategy it plans a greater role in mobilizing private investments in the West Bank and Gaza, especially from Gulf investors, along with complementary advisory services.
In addition to budget support and project investments, the Bank’s knowledge products have helped set the agenda for overall development assistance and brought to the forefront the major challenges confronting Palestinian state-building. An assessment of sources of growth and economic stock-taking will be released soon and an initiative that will scope the prospects of micro work is ongoing and will identify promising digital earning opportunities particularly for women and youth. In similar spirit the new strategy will support knowledge development tailored to Palestinian needs.
Bank support to capacity building in leading economic and regulatory institutions such as the Palestinian Central Bureau of Statistics, Palestinian Monetary Authority, Palestinian Pension Authority, and Palestinian Land Authority will continue and it will engage in the reform of national payments systems.