The World Bank on Monday called on the international community to increase aid to the Palestinian Authority, which is facing a budget crisis, as contributions hit a “historic low”. In a report published on the eve of the opening in Brussels of a conference of foreign donors to the Palestinians and the first anniversary of the last war in Gaza, the World Bank draws a contrasting portrait of the Palestinian economy, notably mentioning the a phenomenon of “new poor” in the rural areas of the occupied West Bank, despite the return to economic growth.
Palestinian finances “very precarious”
After a year of pandemic-related contraction, the Palestinian economy picked up in 2021, with an increase in the number of work permits in Israel and settlements for Palestinians in the West Bank, which contributed to a growth of 7, 8% of the GDP in this occupied territory. In the Gaza Strip, an enclave geographically separated from the West Bank, growth was “slowed down” by the war in May 2021 between the Islamist movement Hamas and Israel, nevertheless reaching 3.4%, said the World Bank.
This economic recovery made it possible to increase the tax revenues of the Palestinian Authority, which on the other hand limited its expenses, underlines the establishment. However, despite these measures, “Palestinian finances remain very precarious”, indicates the World Bank report, calling on donor countries to “grant budgetary support to the Palestinian Authority”.
A deficit of 1.26 billion dollars for an aid of 317 million
Also according to the report, “in 2021, the deficit amounted to 1.26 billion dollars (1.20 billion euros), while international aid reached a historic low of 317 million dollars (300 million euros)” due to the absence of contributions from certain Gulf countries and “delays” in payments from the European Union. As a result, the real deficit reached 940 million dollars (892 million euros), pushing the Palestinian Authority to reduce the payment of salaries to its employees.
Palestinian Prime Minister Mohammed Shtayyeh is holding talks with European officials in Brussels on Monday in the hope of convincing them “of a step forward in the European position on its support for the Palestinian Authority”, he told AFP. Palestinian government spokesman Ibrahim Melhem. Israeli diplomacy, for its part, confirmed to AFP the presence of its Minister for Regional Cooperation, Issawi Farij, at the Brussels conference.