The World Bank says in a report that less than half the money pledged by donors to rebuild the Gaza Strip after the 2014 war between Hamas and Israel has been disbursed.
The shortfall is among several reasons the Palestinian economy is stagnating, with unemployment at 42 percent in Gaza and at 18 percent in Yehudah and Shomron.
The report said that over the past 10 years the PA had slashed its deficit by an amount equal to 15 percent of its Gross Domestic Product, “an achievement rarely seen in other places around the world.”
But “the PA’s finances remain fragile, with declining budget support leading to a projected financing gap of about $600 million in 2016,” it added.
“In the short term, donor support and in particular budget support is essential to avoid a fiscal crisis leading to wider economic problems,” the report said.
“The PA’s actions will not be enough to fully close the gap, particularly since local borrowing opportunities are now largely exhausted,” the report said.
The report made particular mention of Gaza, saying that of $3.5 billion pledged by donors for reconstruction following the 2014 war, less than half had so far been disbursed.
“The situation in Gaza is of great concern and the conditions required for post-reconstruction sustainable economic growth are not being put in place,” the World Bank director for Yehudah, Shomron and Gaza, Marina Wes, wrote in the report.
While the report is not even-handed, it does give credit to Israel for increasing the number of work permits for Palestinians, but blames Israeli security restrictions that are limiting Palestinian economic competitiveness and driving away private investments.
The bank recommends that Israel allow more building in Yehudah and Shomron and that it loosen its blockade of Gaza. (Seemingly, it was better for them before the Six-Day War…)
The bank also calls on the Palestinian Authority to cut spending, especially by reducing pension payments. But, while blaming Israel for the PA’s financial woes, its chairman Mahmoud Abbas continues to spend six percent of the PA’s annual budget to pay $4.5 million a month to jailed terrorists and another $6.5 million to their families.
The report released Thursday will be delivered to the Ad Hoc Liaison Committee, a forum of donors to the Palestinian Authority, in New York next week.