The World Bank has assisted the Palestinians since the Oslo Accords of the early 1990s – continuing to lay the foundation of a future Palestinian state so that it can deliver services to the people. Grants, financed from the World Bank’s own income and supplemented by Trust Funds contributed by donors, fund the Palestinian Authority’s projects in water and sanitation, municipal, education and social protection sectors.
The lack of progress towards peace and reconciliation creates an unsustainable economic situation. Donor support has significantly declined, and a financing gap persists despite the PA’s fiscal performance having improved in 2017. The Palestinian internal polity remains divided between Gaza and the West Bank, with grave uncertainty about the reconciliation process.
Initial recovery from the 2014 war in Gaza has ended a short-lived growth spurt resulting in the deterioration of economic conditions. A recent liquidity squeeze in Gaza has led to a rapid collapse in humanitarian conditions, including access to medical treatment, electricity, and clean water. Unemployment is at high at 27 percent. Only 41 percent of those ages 15 to 29 are active in the labor market. Despite a low participation rate, unemployment amongst this category reached a staggering 60 percent in Gaza. The West Bank and Gaza ranked 114th out of 190 economies in the 2018 Doing Business report—26 spots better from the 2017 ranking (140th).
Last Updated: Apr 18, 2018