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Source: World Bank
6 December 2000

The World Bank Group
News Release No:

World Bank Provides US$12 Million Grant to Mitigate
Current Economic Crisis in West Bank & Gaza

WASHINGTON, December 6, 2000
--The World Bank Board of Directors has approved a grant to the Palestinian Authority in the amount of US$12 million for an Emergency Response Program designed to help offset the effects of the current economic crisis in the West Bank & Gaza (WBG).

The present crisis has caused severe economic shocks to the Palestinian economy that calls for a rapid response by the donor community. The areas of WBG under the jurisdiction of the Palestinian Authority are subject to tight closure. As a result, approximately 125,000 Palestinians previously working in Israel (nearly 20 percent of the labor force) are unable to go to work. At the same time, the domestic economy has been crippled by both internal and external closures and work stoppages due to inadequate supplies of materials, movement restrictions and other related transaction costs.

"This is a highly unusual move for the World Bank, since the Bank usually provides loans rather than grants. However, the severe economic shock affecting the Palestinian economy calls for a rapid response that should not impose further financial burdens on the Palestinian Authority
," said Joseph Saba, World Bank Director for West Bank and Gaza.

The Emergency Response Program will aim to alleviate hardships for thousands of families through the provision of temporary employment for unskilled and semi-skilled laborers. Local suppliers and contractors will also benefit through the increased demand for materials and works. The grant is intended to serve as a catalyst for other donors to participate through parallel or joint contributions for further activities.

The grant will be channeled through the Holst Fund, a multidonor trust fund facility administered by the Bank, for which all the institutional arrangements and procedures are in place, thus enabling expedited transfer and disbursement of this urgently needed assistance.

The implementing agencies involved will include the Ministry of Local Government, PECDAR, the Ministry of Labor, the municipalities, village councils and Palestinian NGOs. Most of the projects would be implemented using local labor and materials. A typical menu of projects could include painting, maintenance and repair of public buildings, interlock tile laying, pipe installations, solid waste collection and other labor intensive small construction activities that require materials produced in the local market.

Contact Person:
West Bank and Gaza : Ma'moon Sbeih
+972-2-2366511 Email:
Washington: Hanan Dowidar +1-202-473-7199

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