The Palestinian economy is unlikely to shake off its present stagnation without an easing of movements of goods and people to and from the territory, as well as a concerted commitment to security reform, the World Bank said on Wednesday. The Washington-based lender said significant efforts by both the Palestinian Authority and Israel would be needed to justify a major increase in foreign aid to the area.
"Easing internal closures throughout the West Bank must be accompanied by a credible Palestinian security effort," the World Bank said in the report, entitled "Stagnation or Revival? Israeli Disengagement and Palestinian Economic Prospects."
Nigel Roberts, the World Bank's country director for the West Bank and Gaza, said reviving the Palestinian economy was critical to making peace in the region possible.
"Too often in the course of this conflict, economic considerations have been dealt with as a residual element in diplomacy," Roberts said.
"Given the depth of the economic crisis in the West Bank and Gaza, securing work and a future for one's family features very high on the agenda of the ordinary Palestinian and need to be catered to as top priority."
In the report, the World Bank called on Israel to roll back a set of security-related restrictions on the movement of people and goods in the Palestinian territory imposed since the beginning of the intifada.
The bank urged Israel to progressively dismantle a system of more than 700 checkpoints and barriers in the West Bank and encouraged the re-establishment of an efficient and reliable Gaza-West Bank transport link.
Existing trade, tariff and customs procedures should remain in place until they can be properly re-negotiated by both sides, the bank said. It also recommended accommodation of Palestinian workers in Israel.
"Israel's willingness to maintain, as a minimum, current Palestinian labour levels in Israel beyond this decade would make an important and positive contribution to economic and social stability," the bank said in the report.
Turning to the Palestinian Authority, the bank said the territory's future economic prosperity required a stronger commitment to security reform and substantial efforts to stop attacks on Israelis.
The World Bank urged the Palestinian Authority to overhaul its courts and address recurrent concerns about corruption in the public sector. It said revamped governance standards were critical "in order to create a legal and regulatory framework that can attract investors back to the Palestinian economy."
The transfer, management and disposal of Israeli settlement assets must be determined ahead of time and in consultation with the public in Gaza and the northern West Bank, it said.
The World Bank report is to be discussed at a meeting of international donors for the West Bank and Gaza, known as the Ad Hoc Liaison Committee, in Oslo on December 8.
The bank said donors should assess progress over the next few months in order to decide whether a major additional aid effort is warranted.
"If and when significant progress is made it would make sense to convene a donor pledging conference," the report said. "Calling such a conference in the absence of adequate progress would be counterproductive."
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