Development under adversity

Abstract

The Palestinian economy has been operating below its enormous potential since the 1993 signing of the Declaration of Principles. This book documents the degrees to which the permit and closure policies implemented by Israel since 1993 have led to a decline in employment for Palestinian in Israel. Many promising export industries have been shut down and farmers have reverted to low-value crops. Despite the obstacles and setbacks, the Palestinian economy has enormous potential. The most important asset is its people. The book identifies other promising factors for economic growth, including a vibrant and well-organized civil society, the potential for significant tourism, an extensive international network of skilled and wealthy expatriates, a location at the trade intersection of East and West, no government debt, a good tax system, and widespread international sympathy. The books finds that donors can also make a big difference in stabilizing the economy, alleviating poverty, and laying the foundations for sustained growth. They need to review their role and renew their funding commitments into the future. The next round of support should focus on investment, particularly long-term finance to support infrastructure reconstruction and sustainable delivery of social services.