RAMALLAH, July 25, 2012 (WAFA) – A report by the World Bank Wednesday argued that much can be done now to improve the business environment in the Palestinian Territory in order to support a future Palestinian state despite the Israeli restrictions on access to markets and natural resources.
“While Israeli restrictions remain the biggest impediment to investing, and most growth comes from donor-funded government spending, there are still positive actions that the PA can take now that will both lay the ground work for a sustainable economy and contribute to growth today and in the future,” said Mariam Sherman, World Bank Country Director.
The report, titled “Towards Economic Sustainability of a Future Palestinian State: Promoting Private Sector-Led Growth,” noted that only a dynamic and rapidly growing private sector will be able to provide the jobs needed by the expanding Palestinian population and generate the revenues required to fund essential government services.
“The Palestinian Authority has made steady progress in many areas towards establishing the institutions required by a future state but the economy is currently not strong enough to support such a state,” said Lead Economist and Lead Author of the study John Nasir.
“Economic sustainability cannot be based on foreign aid so it is critical for the Palestinian Authority (PA) to increase trade and spur private sector growth,” he added.
The report asserted that future growth of the Palestinian economy will depend upon how well it can integrate into the world economy and take advantage of its main riches that are its well educated and entrepreneurial population and its location as a gateway between the Arab World and Europe.
World Bank indicated that a Palestinian state could seek to emulate the outward-looking models of the East Asian countries, with trade as the main driver of future growth.
In addition, high value-added services are particularly promising given the high levels of education and good infrastructure in West Bank and Gaza, thus “investment in the education system is the key to better link learned skills to the needs of the private sector.”
Commending its ongoing work, the report urges the PA to continue efforts to improve the legal and regulatory environment by passing new legislation and developing the ability to regulate markets.
R.Q.
