World Bank to Give Palestinians $90 Million to Boost Economy

(Bloomberg) -- The World Bank increased its yearly allocation to the Palestinians, citing challenges in the Gaza Strip that have “left the territory on the verge of economic and social collapse.”

The bank’s board on Tuesday raised its annual distribution to $90 million from $55 million, the bank said on its website. In its current portfolio, 40 percent of the bank’s grants support private sector development; this rate is expected to increase to 90 percent, with new projects in energy, water, social and municipal development, it said.

“We recognize that the full potential of the economy will not be achieved without a political settlement,” said Ferid Belhaj, Work Bank Group vice president for Middle East and Africa, referring to the Israeli-Palestinian conflict. “Yet, more can be done to support the well-being of the Palestinian people who have faced more than a decade of stagnant growth and stubbornly high unemployment.”

The economy in Gaza, which is controlled by the militant Islamic Hamas group, contracted by 6 percent in the first quarter, the International Monetary Fund said. Growth in the West Bank, which is ruled by the Palestinian Authority, was close to 5 percent. Thirty percent of Palestinians are unemployed, with half of the population in Gaza jobless, the World Bank said.

The funds “are particularly vital for Gaza,” where basic services are “severely overstretched,” United Nations Special Coordinator for the Middle East Peace Process Nickolay Mladenov said in a separate statement.

The funds will be used in partnership with the Palestinian Authority to support job creation through labor-intensive infrastructure rehabilitation, Mladenov said.

©2018 Bloomberg L.P.