Area C And The Future Of The Palestinian Economy

This is the first report to systematically evaluate and quantify the economic potential of Area C, which constitutes approximately 61 percent of the West Bank. The report reveals that lifting the restrictions on economic activity in Area C could have a large positive impact on Palestinian GDP, public finances, and employment prospects. Among other things, access to economic activity in Area C is expected to be a key prerequisite for building a sustainable Palestinian economy. However, full potential of the Area C could be materialized only if other restrictions on free movement of goods, labor and capital are removed and the overall business environment in Palestinian territories has become more attractive. The economic significance of Area C lies in that it is the only contiguous territory in the West Bank, which renders it indispensable to connective infrastructure development across the West Bank, and a relative abundance of natural resources situated therein. Area C offers large potential for the development of several sectors of the Palestinian economy: agriculture, stone and mineral processing, cosmetics, construction, tourism, and telecommunications. The report shows that access to economic activity in Area C could increase the Palestinian GDP by as much as 35 percent, the majority of this impact would stem from agriculture and Dead Sea minerals processing industries, as well as the multiplier effect, which has been estimated at 1.5. Although the importance of building connective infrastructure through Area C is discussed in the report, the quantification of this impact is beyond the scope of this report. An increase in GDP of 35 percent, although thought to be a conservative estimate, would be expected to result in at least $800 million increase in tax revenues for the Palestinian authority, which would drastically reduce its dependence on donor aid for financing chronic budget deficits.

This is the first report to systematically evaluate and quantify the economic potential of Area C, which constitutes approximately 61 percent of the West Bank. The report reveals that lifting the restrictions on economic activity in Area C could have a large positive impact on Palestinian GDP, public finances, and employment prospects. Among other things, access to economic activity in Area C is expected to be a key prerequisite for building a sustainable Palestinian economy. However, full potential of the Area C could be materialized only if other restrictions on free movement of goods, labor and capital are removed and the overall business environment in Palestinian territories has become more attractive. The economic significance of Area C lies in that it is the only contiguous territory in the West Bank, which renders it indispensable to connective infrastructure development across the West Bank, and a relative abundance of natural resources situated therein. Area C offers large potential for the development of several sectors of the Palestinian economy: agriculture, stone and mineral processing, cosmetics, construction, tourism, and telecommunications. The report shows that access to economic activity in Area C could increase the Palestinian GDP by as much as 35 percent, the majority of this impact would stem from agriculture and Dead Sea minerals processing industries, as well as the multiplier effect, which has been estimated at 1.5. Although the importance of building connective infrastructure through Area C is discussed in the report, the quantification of this impact is beyond the scope of this report. An increase in GDP of 35 percent, although thought to be a conservative estimate, would be expected to result in at least $800 million increase in tax revenues for the Palestinian authority, which would drastically reduce its dependence on donor aid for financing chronic budget deficits.

This book offers the only comprehensive overview of the Palestinian economy in the West Bank and Gaza. It focuses on the unique features of this unusual economy during the last thirty years. Under Israeli occupation, the Palestinian economy suffered from poorly developed domestic labor and capital markets, and considerable dependence on the highly developed Israeli economy for employment, trade and financial resources. The book analyses past trends, present conditions and alternative arrangements for the future. A comprehensive data set is used and, for the first time, the public is presented with a detailed picture of the Palestinian economy, with tables and graphs. The authors propose new institutional arrangements between the Palestinian and Israeli economies - an economic filters plan - which will promote neither total integration nor total separation. The book will be of great value to anyone interested in the political economy of the Middle East, the economics of occupation and the Israeli-Palestinian conflict.

"War, border closures, violence, and unemployment have hampered the Palestinian economy for over a decade. Despite these obstacles and setbacks, the future outlook is optimistic." Based on the research of the Palestine Economic Policy Research Institute (MAS), the World Bank, and other organizations, 'Development Under Adversity' reviews the development of the Palestinian economy since the 1993 Declaration of Principles. The Palestinian economy has enormous potential. Its general development indicators, including life expectancy, literacy, and child mortality rates, are among the best in the Middle East and North Africa. The book identifies the conditions under which the Palestinian economy can grow. They include trade channels that reduce the economy's reliance on Israel; the creation of a more efficient civil service; more investment-oriented public expenditure; and more resourceful support from NGOs in the delivery of health, education, welfare, and infrastructure services. 'Development Under Adversity' provides historical background, an objective examination of recent economic and political developments, and a comprehensive analysis of the contribution that the donor community can make toward alleviating poverty. Throughout its analysis, the book focuses on the human consequences of economic uncertainty. It studies the social and household costs of border closures, and includes complete chapters about the education and health sectors. The result is a book that will be relevant to a wide range of institutional and private lenders, as well as to anyone with a general interest in the well-being and future of the Palestinian economy.

The study addresses the leakage of Palestinian fiscal revenue to Israel and provide up-to-date data on the sources of losses of Palestinian fiscal resources. It explains that the fiscal costs are part of the overall economic costs caused by occupation and consists of two components: (i) Palestinian fiscal leakage to Israel under the PER, and (ii) other fiscal losses that are not leaked to Israel but caused by policies and measures imposed under the prolonged occupation.

This book addresses the rising productivity gap between the global frontier and other firms, and identifies a number of structural impediments constraining business start-ups, knowledge diffusion and resource allocation (such as barriers to up-scaling and relatively high rates of skill mismatch).