The World Bank warned today
that continued Israeli economic restrictions are severely limiting the
potential of the Palestinian economy and leaving Palestinians more
dependent on foreign aid than ever.
In a report to be delivered
to international donor governments this month, the World Bank
acknowledges that Israel has lifted some roadblocks in the occupied
West Bank but it says the impact is limited. It says continued
discussions about removing individual checkpoints and roadblocks have
become a “distraction” from the bigger issues. {josquote}”Overwhelming
evidence suggests that the current restrictions correlate to settlement
locations and expansions,” the report says, adding that there is
evidence economic restrictions could be removed without risk to Israeli
citizens.{/josquote}
The
International Monetary Fund says the Palestinian economy shrunk by 0.5%
last year and will grow by only 0.8% in 2008, a long way short of the
Palestinian Authority’s own forecast. It says there was a clear lack of
investment and some industries have been badly hit: the construction
industry is now less than a fifth the size it was in 1999. Foreign aid
has become ever more important: this year the Palestinians will require
around $1.9bn in budget support, equivalent to nearly a third of their
gross domestic product.
The criticisms are striking because as
part of the year-long peace negotiations between Israel and the
Palestinians, Israel and the west have spoken of making significant
improvements to the Palestinian economy, particularly in the West Bank,
to encourage popular support for moderate positions and continued
negotiations. The World Bank report demonstrates how little has been
achieved.
“Israel has announced a series of steps to remove a few
physical obstacles within the West Bank, which will only have an impact
insofar as it is scaled up in number and the scope of the restrictions
being addressed,” the report says.
“The challenge moving
forward with the removal of economic restrictions is to go beyond
isolated gestures towards a profound revision in the fundamentals of
the Palestinian economy. It is thus essential to convert these
initiatives to a new status quo, rather than a series of isolated
exceptions that are consuming a substantial amount of time by all
players, and that are a distraction from dialogue on longer-term
issues.”
The World Bank says aid and reform without improved
access are unlikely to revive the economy. It says that although Israel
has legitimate security concerns, in fact most of the restrictions in
the West Bank are near Jewish settlements.
“Overwhelming
evidence suggests that the current restrictions correlate to settlement
locations and expansions,” the report says, adding that there is
evidence economic restrictions could be removed without risk to Israeli
citizens.