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Source: World Bank
2 December 2004

World Bank Recommends Israel’s Disengagement Be Accompanied By Lifting Of Closures, Further Palestinian Reforms
Report warns increased donor aid alone cannot lead to Palestinian economic recovery

News Release No:2005/190/MNA
Media Contact:
In West Bank:  Stefano Mocci +(972-50) 536-8823
In Washington: Sereen Juma 1 (202) 473-7199
WASHINGTON, December 2, 2004—A Disengagement Plan that is accompanied by a rolling back of Israel’s closure policy and a stronger Palestinian commitment to reform will bring the Palestinian economy out of its present stagnation, according to a World Bank report released today. 
Titled Stagnation or Revival? Israeli Disengagement and Palestinian Economic Prospects, the report further asserts that only significant new efforts by both partiesthe Palestinian Authority and the Government of Israelcan justify a major increase in donor aid beyond existing levels.
The report states for an economic recovery to be possible, the Government of Israel (GOI) will need to roll back the security-related system of restrictions on the movement of people and goods imposed since the beginning of the intifada.  The Palestinian Authority (PA), for its part, must demonstrate a much stronger commitment to security reform and to curbing attacks on Israelis.
The report urges the PA to renew its legitimacy through parliamentary elections, and to reinvigorate its program of internal governance and economic reforms in order to create a legal and regulatory framework that can attract investors back to the Palestinian economy.
The report will be discussed at meeting of international donors for the West Bank and Gaza, also known as the Ad Hoc Liaison Committee, which is scheduled to take place in Oslo on December 8.  The report recommends that the donor community assess progress over the coming few months in order to help judge if the preconditions for a major additional aid effort are in place.  
If and when significant progress is made, the report argues that it would make sense to convene a donor pledging conference.  It concludes that calling such a conference in the absence of adequate progress would be counterproductive.
“While economic growth and prosperity do not of themselves guarantee peace, it is clear that steep economic decline helps foster an environment in which violent doctrines can resonate,” says Nigel Roberts, World Bank Country Director for West Bank and Gaza“Too often in the course of this conflict, economic considerations have been dealt with as a residual element in diplomacy.  Given the depth of the economic crisis in the West Bank and Gaza, securing work and a future for one’s family features very high on the agenda of the ordinary Palestinian, and need to be catered to as top priority.”

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