Overview

  • 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 a twenty percent reduction in the total deficit in the first half of 2018.  The Palestinian internal polity remains divided between Gaza and the West Bank, with grave uncertainty about the reconciliation process.

    Palestinian living standards continued to decline in 2018, with aid flows no longer providing an impetus to growth. The unemployment rate was 32.4 percent in the second quarter of 2018, the highest rate in two decades, while the 2017 poverty rate was 29.2 percent.  A recent liquidity squeeze in Gaza has led to a rapid collapse in humanitarian conditions, including access to medical treatment, electricity, and clean water. In Gaza, 54 percent of the labor force is unemployed, including 70 percent among youth. 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: Oct 11, 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:

    1.Setting the conditions for increased private investments and job creation

    2.Private Sector Enhancement Facility to realize private investments

    3.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: Oct 11, 2018

  • 65 tech jobs created by nine Palestinian startup companies that raised US$1.8 million in private capital -- helped by the Finance for Jobs Project.  

    In Gaza:

    • New / improved electricity service has reached 170,000 people through the rehabilitation of 460 km of electricity distribution lines.
    • An additional 32,000 m3 of re-used water from a Wastewater Treatment Plant is available daily to irrigate agricultural crops in North Gaza”
    • 350,000 tons per day of municipal solid waste disposal capacity has been created.

    Last Updated: Oct 11, 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: Oct 11, 2018

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LENDING

West Bank and Gaza: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments



PHOTO GALLERY

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Additional Resources

Country Office Contacts

Palestinian territories
+972 -2-2366500
mkoussa@worldbank.org