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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 (PA) 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 in the Palestinian territories. Economic momentum faltered during 2019. The slowdown was driven by a decline in private and public consumption and investment. The PA’s fiscal stress significantly heightened in 2019 over clearance revenues (taxes that the Government of Israel collects on behalf of the PA and later transfers to the PA).  

    Along with the rest of the global community, in March 2020 the West Bank and Gaza began dealing with the Coronavirus (COVID-19) health crisis. Since declaring a 30-day state of emergency on March 6, the PA has closed educational institutions, restricted movement, and banned large gatherings—in order to ensure social distancing practices. Cross-border movement has been almost entirely cut off. 

    Last Updated: Apr 15, 2020

  • In the Palestinian territories, the path to sustainable growth depends on nurturing a domestic private sector that can increase its export of goods and services and compete in regional and global markets. 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 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. 

    Aside from promoting investment, the World Bank has maintained a robust analytical program, which includes recent support to the Palestinian financial sector: some analytical work has gone into the stability, accessibility, and sustainable development of the sector, while other analytical work has helped the Palestine Monetary Authority to develop a Microfinance Strategic Framework (2019–2023). The Bank will support the implementation of this framework to help achieve financial inclusion for women and marginalized communities—including by working through product diversification, improved efficiency, and new regulations. 

    Last Updated: Apr 15, 2020

  • Supported by the World Bank’s engagement in municipal development, 85% of the 148 Palestinian municipalities attained at least 50 New Israeli Shekel (NIS) per capita of own-source revenue during 2018 or reported an increase over the previous year in revenues collected by themselves. Also, 76% of municipalities now have complaint system mechanisms established in their Citizen Service Centers to process citizens’ complaints, concerns, and suggestions related to their municipal services.  

    The World Bank has also helped strengthen Palestinian energy sector organizations. The Palestinian Electricity Transmission Company Ltd. (PETL) is now paying for 100% of its electricity bill for power imports from the Israel Electricity Company, through the Jenin sub-station.   

    In solid waste management, a recently completed sanitary landfill with a capacity of 2.2 million cubic meters provides an improved solid waste disposal service to 46% of the population of Gaza. 

    Last Updated: Apr 15, 2020

  • The World Bank functions as the secretariat for the Ad Hoc Liaison Committee (AHLC) of donors to the Palestinian Authority (PA). 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, the Bank-administered Palestinian Recovery and Development Program Multi Donor Trust Fund (PRDP MDTF) has channeled about US$1.5 billion in budget support to the PA’s program for macro-fiscal strengthening and public financial management reform. France, Japan, Norway, and Kuwait have demonstrated strong commitment to continue channeling budget support through the PRDP MDTF. 

    The West Bank and Gaza Partnership for Infrastructure Development Multi Donor Trust Fund (PID MDTF) was established in 2012 to provide financial and technical support for the coverage, quality, and sustainability of Palestinian infrastructure. Focusing on the water, urban development, and energy sectors, the PID MDTF has contributions of US$271 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 multi-donor Trust Funds, the Government of Norway cooperates with the World Bank via the World Bank-administered Norway West Bank and Gaza Support Trust Fund, established in 2014 with a pledge of US$2 million. This supports the coordination of aid and, also, analytical work on energy, education, and private sector development. Norway also chairs the Ad Hoc Liaison (AHLC)—for which the World Bank serves as the secretariat. The Norway-chaired AHLC Committee is a semi-annual, policy-level meeting for development assistance to the Palestinian people that brings together representatives from the Bank, IMF, UN, US and other partners, in addition to those from the PA and Israel. 

    Last Updated: Apr 15, 2020

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LENDING

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

*Amounts include IBRD and IDA commitments

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