Overview

«

»

Context
Strategy
Results
Partners

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
A sustainable growth path for the Palestinian economy depends on a domestic private sector that can compete in regional and global markets and increase its export of goods and services. Thus, the World Bank Group’s assistance strategy for 2018-21 is focused on creating a conducive environment for private investment in the productive sectors of the economy.
Increased investment can enhance the capacity of the economy, inspire entrepreneurial effort, and generate the jobs that are needed—especially for the large number of unemployed youth and women. This is built on the World Bank Group’s maximizing finance for development approach. Beyond efforts to support the private sector, a strong focus on shared prosperity is critical for renewing the social contract via better (public) service provisions and social protection. The three pillars of the assistance strategy are:
Setting the conditions for increased private investments and job creation
Private Sector Enhancement Facility to realize private investments
Addressing the needs of the vulnerable and strengthening institutions for improved citizen-centered service delivery.
The World Bank has maintained a robust analytical program. The Bank’s report to the September 2017 Ad Hoc Liaison Committee (of donors) outlined a new vision for growth and job creation, with quantification of the potential gains from actions by the Government of Israel and the donor community to create an environment conducive to private sector investment.

Last Updated: Apr 18, 2018
- A half million people have relief from the immediate threat of flooding and backflows of raw sewage in the communities surrounding the North Gaza Emergency Sewage Treatment Plant.
- More than six thousand students, half of whom are women, have completed job placement programs financed by the Education to Work Transition Project.
- Eight start-ups in the areas of technology and programming have been supported by the Finance for Jobs project.
- The Second Municipal Development Project reports that 90 percent of municipalities recording at least a 20 percent reduction in processing time for selected services in citizen service centers.

Last Updated: Apr 18, 2018
The Bank functions as the secretariat for the Ad Hoc Liaison Committee (AHLC) of donors to the Palestinian Authority. The Bank submits a report prior to each meeting updating partners on recent economic and fiscal trends, and provides economic and institutional analysis.
A World Bank administered multi-donor Trust Fund has channeled budget support (approximately US$1.5 billion since its inception) in support of the Palestinian Authority’s reform program in macro-fiscal strengthening and public financial management. Australia, France, Japan, Norway, and Kuwait have committed to continue channeling their budget support through this Palestinian Reform and Development Plan Trust Fund.
The Partnership for Infrastructure Multi-Donor Trust Fund (PID MDTF), established in 2012 to provide financial and technical support for the coverage, quality, and sustainability of infrastructure. Focusing on the water, urban development, and energy sectors, the PID MDTF has active participation from Croatia, Denmark, Finland, France, the Netherlands, Norway, Portugal, and Sweden with contributions of US$145 million.
Besides its support in the above-mentioned Trust Funds, the Government of Norway cooperates with the World Bank via the Norway West Bank and Gaza Support Trust Fund, which was established in 2014 with a $2 million pledge. It supports aid coordination by the and analytical work in energy, education, and private sector development.

Last Updated: Apr 18, 2018