The Palestinians are becoming more dependent on foreign aid, mainly because of a sluggish economy stifled by continued Israeli restrictions on trade and movement, the World Bank said in a report published yesterday.
The bank prepared the report for a meeting of key donor country representatives during the UN General Assembly in New York this month.
The report counters a key assumption of international policy — that the current massive aid to the Palestinians would stimulate their economy and make them increasingly less dependent on foreign money in the future.
A three-year plan for Palestinian economic recovery was launched in December in Paris and was based on three elements — Palestinian government reform, a pledge of US$7.7 billion in foreign aid through 2010 and a significant easing of Israeli movement restrictions.
However, the bank said that while the Palestinians have moved forward with reform and the donors have delivered significant sums of aid, Israel has only removed a few obstacles and its economic restrictions on the Palestinians have increased.
“Aid and reform without access are unlikely to revive the Palestinian economy,” the bank wrote. “As such, international manifestations of support toward a viable Palestinian state and institutions are incomplete insofar as they do not tackle Israeli economic restrictions in parallel.”
Israeli foreign ministry spokesman Yigal Palmor, who had not yet seen the report, said in an initial response that security was key to any economic development.
Israel has said its restrictions are aimed at stopping Palestinian militants who not only threaten Israelis, but also the moderate Palestinian government in the West Bank.
Israel imposed the restrictions after the outbreak of the Palestinian uprising in 2000 in what it said was an attempt to thwart Palestinian bombing and shooting attacks on Israelis.
Since then, Israel built a separation barrier that slices off about 10 percent of the West Bank and erected more than 600 roadblocks, checkpoints and other obstacles that make it difficult to travel within in the territory.
West Bank goods are trucked to Israel and other markets through a cumbersome back-to-back system. Israel has also halted movement between the West Bank and Gaza since 2000 and deepened Gaza’s isolation after the violent takeover of the territory by the Islamic militant Hamas last year.
The World Bank said that while Israel has important security concerns, considerations not related to security also come into play.
“Overwhelming evidence suggests that the current restrictions correlate to settlement locations and expansion,” the report said.
Palmor dismissed the report’s comments on security concerns as superficial, saying Hamas militants continue to pose a threat to Israel and Palestinian moderates.
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