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UN Warns of ‘Dire’ Economic Situation in Palestinian Authority’s Areas

UN Warns of ‘Dire’ Economic Situation in Palestinian Authority’s Areas

Saturday, 13 November, 2021 - 10:15
A Palestinian child beside the Israeli division wall in al-Eizariya town in the West Bank. (AFP)

The economic and fiscal situation in the occupied Palestinian territories remains “dire,” said a report by the Office of the United Nations Special Coordinator for the Middle East Peace Process (UNSCO) Tor Wennesland.

A broader framework of engagement—including parallel steps by all parties—needs to be re-established between Israel, the Palestinian Authority and the international community to strengthen the fiscal situation of the PA and its institutions.

The report was published on Friday and assesses the uneven progress toward sustainable development and institution building in Palestine. It will be presented in the upcoming Ad Hoc Liaison Committee (AHLC), the international donor group for Palestine, meeting in Oslo on Nov. 17.

Wennesland said the report calls for the immediate economic and fiscal situation facing the PA to be addressed and its institutions to be strengthened, with a near-term focus on delivering public services.

“A piecemeal approach to addressing these challenges, along with a lack of progress on the broader political issues, risks perpetuating a continuous cycle of crisis management,” it stressed.

“A sharp decline in GDP per capita in 2020 followed years of economic stagnation in the West Bank. In the Gaza Strip, the economy continues its multi-decade decline and there is persistently high unemployment, particularly among women.”

It is increasingly difficult for the PA to cover its minimum recurrent expenditures due to the longstanding fiscal leakages, and Israel’s deduction of the clearance revenues.

The report proposed a three-track approach focusing on initiatives to address the immediate economic and fiscal situation facing the PA and strengthen Palestinian Authority institutions and basic service delivery, solidify the cessation of hostilities and support economic development in Gaza and generate longer-term economic growth and sustainable livelihoods across the occupied Palestinian territories.

“Given the severity of the crises endured so far in 2021, Israel’s government, the PA and the international community should work in concert on an integrated response in the coming months,” the report stressed.

It urged relevant parties to solidify the cessation of hostilities that began on May 21 in Gaza, support economic development in the enclave and promote a sustainable and inclusive economic recovery that improves livelihoods of all Palestinians, including women, the poor, young people, refugees and other vulnerable groups.

Although steps have been taken to de-escalate tensions in East Jerusalem and maintain the cessation of hostilities in Gaza, settlement activity and settler-related violence, demolitions and evictions and Israeli security operations in Area A continue to undermine Palestinian institutions and prospects for a two-state solution, the report warned.

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