Palestinian economic growth unsustainable – World Bank
The World Bank has said the recent economic growth in the Palestinian Territories is unsustainable because of its heavy reliance on foreign aid.
The Palestinian Authority had begun establishing institutions for a future state, but the economy was not strong enough to support it, a report warned.
It was critical to increase trade and spur private sector growth, it added.
The PA said last month it was facing a funding crisis, with debts of $1.5bn (£968m) and a cash shortfall of $500m.
The admission that civil servants would not be paid in July led some Palestinians to demand the dismantling of the PA, which was established under the 1994 Oslo Accords.
The World Bank said donor countries had propped up the Palestinian economy by giving the PA billions of dollars in aid, helping it achieve a 7.7% increase in GDP between 2007 and 2011.
But the report said the growth had only occurred in government services, real estate and other non-tradable sectors. The manufacturing and agriculture sectors had shrunk, and aid levels had begun to fall because of the global economic downturn, it noted.
aid is national GDP? sounds like a strange way to do your accounting for starters..i note the world bank has no answers..they lend plenty to the failed countries in europe ..why not here?