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31 December 2007
THE PALESTINIAN ECONOMY
AND THE PROSPECTS FOR ITS RECOVERY
Economic Monitoring Report to the Ad Hoc Liaison Committee
Number 1, December 2005
Foreword – The Context for this Report
The Rationale for Periodic Assessments
The World Bank presented to the December 8, 2004 meeting of the Ad Hoc Liaison Committee (AHLC) a report (
Stagnation or Revival? Israeli Disengagement and Palestinian Economic Prospects
) which argued that rapid Palestinian economic revival is essential to sustaining the momentum of a renewed peace process, but that it will only come about if there is
A drastic improvement in the security environment;
A dismantling of the various post-September 28, 2000 restrictions on the movement of Palestinian people and goods; and
Dynamic progress on Palestinian governance reform and institution-building.
these preconditions for economic revival emerge, it was argued, a major increase in donor assistance levels could have a transformational effect. In furtherance of this premise the Bank identified an agenda of key measures “which, if implemented, will lay the basis for the economic revival of the West Bank and Gaza” (see
). These measures are consistent with the obligations of the Government of Israel and the Palestinian Authority specified under Phase I of the Roadmap. As a corollary to this virtuous sequence, the Bank noted that a quantum increase in donor financing would be hard to justify if meaningful progress in security, closure and reform policy was
made—both because the impact of these resources would be seriously muted, and because the private sector response needed to sustain the impact of the additional spending would not emerge.
o The Bank’s report was endorsed by the December 2004 AHLC Meeting. In its Summary, the AHLC Chair requested the Bank to work with the parties and donors to translate the report’s recommendations into a set of actionable measures, and to monitor progress towards their implementation; this would then help donors form a judgment on the extent to which the preconditions for economic revival are being put in place. At the London Meeting on March 1, 2005 donors and the PA agreed that the first Bank Economic Monitoring Report should be prepared as an input to the next AHLC Meeting.
o Integral to this report is a matrix of
Indicators of Economic Revival
). These indicators were developed by the Bank with assistance from the European Commission and the United States. They should
be considered a checklist or scorecard, and are not of themselves determinant: they merely help anchor a qualitative analysis of the extent to which the preconditions for robust economic growth are being re-established.
Complete document in PDF format