18 Sep 2011
Measures taken by Israel in support of developing the Palestinian Economy and Socio-Economic Structure
This report was prepared for the upcoming meeting of the Ad Hoc Liaison Committee (AHLC) established fifteen years ago by the Government of Norway to coordinate international aid for the purpose of building and strengthening the capabilities and institutions of the Palestinian Authority.
The Government of Israel views the bilateral track with the Palestinians as the only way to reach a sustainable solution, based on two states for two peoples. The Government of Israel wishes to maintain the existing legal framework, as long as circumstances allow.
After two consecutive years of impressive economic growth in the West Bank, the Palestinian economy now faces a slowdown. According to IMF estimates, in the first half of 2011 real GDP growth amounted to approximately 4% (compared to real GDP for the first half of 2010), a decline from the 8% annual growth rate the previous year. The PA now faces a financial crisis. The factors fueling the crisis include: the Palestinian budget's ongoing dependency on foreign aid and the shortfall in aid in 2011; the PA's inability to finance the shortfall through bank loans; the lack of sufficient internal resources to generate income; and a relatively large public sector which consumes a large portion of the budget. The current fiscal situation raises doubts about whether the PA will be able to reduce its dependency on foreign aid in the coming years.
Israel's policy in the West Bank has contributed significantly to growth in the past year. Trade between Israel and the PA continuously increased by 7% throughout the first half of 2011, an increase reflected by a 6% increase in tax revenue collection transferred to the PA1. A higher volume of commercial goods was shipped from the West Bank via the land crossings to Israel. In the first half of 2011, there was a 31.32% increase in commercial movement of goods via the Allenby Bridge. Palestinian imports (except Israel) amounted to NIS 3,127,395,640, a 17.44% increase compared to the parallel period in the previous year. Palestinian exports (except Israel) amounted to USD 45,458,095 in the first half of 2011, a 23% increase compared to the parallel period in the previous year.
Israel calls for ongoing international support for the PA budget and development projects that will contribute to the growth of a vibrant private sector, which will provide the PA an expanded base for generating internal revenue.
Israel maintains bilateral dialogues with the PA on a variety of matters, aiming to support the upgrade of Palestinian infrastructure in these areas, including: financial and customs services, water and sewage infrastructure, the legal system and the rule of law, the agriculture sector, and the electricity network. (complete report)
This is very bad news. Either the Israeli Government supports another Arab state in the Land of Israel or it recognizes the dangers to the very existence of the State of Israel. What type of government helps in the endangerment and destruction of its own country?