Overview

  • The World Bank’s engagement in the Palestinian territories began in November 1992. 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 services, education, and social protection. The lack of progress towards peace and reconciliation continues to create an unsustainable economic situation. 

    After an uptick in economic growth during the second half of 2018, economic momentum faltered in the Palestinian territories in early 2019. The unemployment rate remains high: in the West Bank, unemployment declined from 17 percent in 2018 to 15 percent in the second quarter of 2019, but in Gaza the unemployment rate increased from 43 percent in 2018 to almost 47 percent in the second quarter of 2019. 

    During March to September 2019, the Palestinian Authority (PA) implemented an emergency cash management plan to manage the loss of revenues from the impasse over revenue transfers. The West Bank and Gaza ranked 116th out of 190 economies in the World Bank’s 2019 Doing Business report.

    Last Updated: Oct 01, 2019

  • In the Palestinian territories, the path to sustainable growth depends on nurturing 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 2018–2021 is focused on creating a conducive environment for private investment in productive sectors of the Palestinian economy, a strategy built in turn on the Bank’s approach to maximizing finance for development.

    Increased investment can improve the capacity of the economy, inspire entrepreneurial effort, and generate the jobs that are needed, especially for the large numbers of unemployed women and youth. Keeping a strong focus on shared prosperity is also critical, particularly for renewing the social contract between people and the state via social protection and the provision of better public services. 

    The three pillars of the Bank’s assistance strategy are:

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

    2. Supporting a 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 also maintained a robust analytical program. Technical assistance in the area of digital payments is supporting an improved legal and regulatory framework for electronic payments, the licensing of non-bank service providers for payments, consumer protection measures for payment transactions, and the strengthening of payments’ oversight.

    Last Updated: Oct 01, 2019

  • • A Strengthening Fiscal Resilience and Business Environment Development Policy Grant helped shore up the governance of revenues and land administration; enhance the sustainability and creditworthiness of local service providers responsible for supplying water and electricity; streamline the business licensing regime; and lay foundations for the digital economy.

    • To help address the Gaza liquidity squeeze, the World Bank was able to quickly mobilize US$17 million for the Gaza Emergency Cash for Work and Self-Employment Support Project, creating short-term jobs for vulnerable youth, while bridging the gap with the provision of social protection. 

    • US$10 million has been allocated to an Additional Financing for the Third Municipal Development Project, which is generating employment through the rehabilitation of local infrastructure. This project is creating about 2,500 jobs per year in labor-intensive municipal service delivery. 

    Additional Financing for the ongoing Electricity Sector Performance Improvement Project is improving the efficiency of the distribution system in targeted areas and piloting a new business model for solar energy service delivery in Gaza.

    Last Updated: Oct 01, 2019

  • The World Bank functions as the secretariat for the Ad Hoc Liaison Committee of donors to the Palestinian Authority. The Bank submits a report prior to each meeting, updating partners on economic and fiscal trends and providing economic and institutional analysis.

    Since its inception, a Bank-administered, multi-donor Trust Fund has channeled about US$1.5 billion in budget support to the Palestinian Authority’s program for macro-fiscal strengthening and public financial management reform. Australia, France, Japan, Norway, and Kuwait have committed to continue channeling their support through this Palestinian Reform and Development Plan Trust Fund.

    The Palestinian territories’ Partnership for Infrastructure Multi-Donor Trust Fund (PID MDTF) was 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 contributions of US$170 million in funding, and the active participation of Australia, Croatia, Denmark, Finland, France, the Netherlands, Norway, Portugal, Sweden, and the UK.

    Besides its support for the 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 US$2 million pledge. This supports aid coordination and analytical work in energy, education, and private sector development.

     

    Last Updated: Oct 01, 2019

Api


LENDING

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

*Amounts include IBRD and IDA commitments



PHOTO GALLERY

More Photos Arrow

In Depth

Oct 09, 2019

MENA Economic Update: Reaching New Heights: Promoting Fair Competition in the ...

GDP growth is projected to be 0.6% in the region in 2019, a fraction of what is needed to create enough jobs for the fast-growing working-age population in the Middle East and North Africa region.

Apr 17, 2019

Economic Monitoring Report to the Ad Hoc Liaison Committee- April 2019

A new World Bank report highlights the stalling of the Palestinian economy and calls for a review of the Israeli application of the dual use goods system.

Apr 01, 2019

MENA Economic Update: Reforms and External Imbalances: The Labor-Productivity ...

World Bank economists expect economic growth in the Middle East and North Africa (MENA) to continue at a modest pace of about 1.5 to 3.5 percent during 2019-2021, with some laggards and a few emerging growth stars.

Feb 06, 2019

The Mobility of Displaced Syrians: An Economic and Social Analysis

This report identifies key factors weighing on Syrian refugees contemplating a return home and analyzes how changing conditions in Syria might affect their decisions.

Additional Resources