Palestinian Reform and Development Plan

– In Dec. 2007, at the Paris conference, the Palestinian Authority revealed the Palestinian Reform and Development Plan ( 2008-2010 ) that chiefly was trusting on an economic growing of about 3.5 per centum in the 2008 and increasing to 5 per centum in 2010. To accomplish such ends harmonizing to the program, there should be decrease in in economic limitations on the Palestinian economic system and at least some resoluteness in the state of affairs in Gaza Strip.

– The GDP construction gets deeper by the clip and this leads to more decrease in the economic growing. For illustration, the agribusiness and industry sector was approximately 5 % of the GDP in twelvemonth 1999 whereas the instruction and wellness were lower than 20 per centum but in twelvemonth 2008, the state of affairs changed that agribusiness and industry reached 19 per centum and wellness and instruction to more than 27 per centum. What constitute to take downing the Palestinian GDP is when the hard currency pay measure constitutes to a big proportion of the GDP where it reached 27 % in 2007 and diminish to 22 % by 2010.

– Another point is that Palestinian has become an aid dependent state to heighten its economic due to the diminution in it. As an illustration, the USAID by itself has given more than 2.2 billion to Palestine during the last decennary and a half in which these assistance influxs would impact the perennial budget of the PA.

– The per capital income lessenings when population growing increases where it reached to about 2.5 % yearly which causes a decrease in the Palestinian GDP compared to before the intifada.

– Due to the rough state of affairs that Palestine went through, the unemployment and poverty degree increased and reached approximately 18 % in twelvemonth 2008 in the WB and approximately 29 % in Gaza because most of the workers were dependent on the Israeli markets which have declined after the 2nd intifada in 2000. Israel still hires Palestinian workers but it will halt when the Israeli governments impose more revenue enhancements on these employees so his monthly pay would be higher which will do to more unemployment.

– The figures that were captured for ciphering the existent end product of Palestine is significant since there is no existent figure on the figure of trucks traveling between Israel and West Bank since some of the them caput to Israeli colonies, so there is no existent value on the domestic revenue enhancement aggregation system.

– Since the Hamas elections in 2006, Gaza has been surrounded by the Israeli besieging and its economic system was therefore affected taking to unemployment and hence to poverty that reached 52 % in 2006 and the deep poorness reached 35 % in twelvemonth 2007.

– The societal impact due to violence led to act upon the Palestinian algology and adult females were depended on for family income to 15 % and the addition per centum of young person between 19 and 25 old ages old.

– Furthermore, the Palestinian life status got deteriorated with the addition of the nutrient and poorness rate where people in the West Bank spend 66 per centum and Gaza 56 % of their income on nutrient.


Since the Hamas triumph over Gaza in 2007, the imposed closing affected the economic state of affairs due to miss of imports and more significantly exports. This led the industry sector to decline taking to unemployment of 40,000 husbandmans in the agricultural sector and 70,000 workers in the other sectors. The closing besides affected the municipal sector services in which they were unable to cover the outgos on rewards and roll up services fees every bit good as importing trim parts for the H2O and sanitation to better supply their services to people in Gaza.

Furthermore, annually there is a high figure of alumnuss in IT sections and the closing affected the IT sector that includes hardware, package and outsourcing houses that had partnership with Gaza which effected the economic state of affairs. However, when the Tahdiah took topographic point in June 2007, some happenings took topographic point where the boundary lines were still close and there was a uninterrupted ceasefire between Hamas and Israel which led to keeping some trade goods on the lodgers. However, since that period, more trucks were traveling in to Gaza ( 60-70 trucks a twenty-four hours ) every bit good as 3 million litter fuel and 1.2 million litter of Diesel entered Gaza per hebdomad. After that period, everything has changed and has to be approved by the COGAT with bounds on the measures of goods.

The tenseness in Gaza was increasing taking to impact the wellness and the instruction sector in which pupils attending to schools decreased and about 50 % of wellness workers were on work stoppage. Furthermore, some givers were non able to finish or get down their undertakings in Gaza to better their chief services due to the uninterrupted alterations in the closing policies and Israeli governments ‘ actions. However, what Gaza needs is non human-centered aid from assorted givers but the demand for its people to be able to entree wellness and instruction services outside Gaza. The private sector in Gaza is besides affected since the entered goods to Gaza are non plenty and even deficient compared to the past such as grain and cement through the Karni boundary line where the Kerem Shalom crossing was closed due to the Gaza onslaughts in add-on to the ground of Gaza ‘s inability to export to Israel.


Since the 2nd intifada in 2000, the Palestinian economic system was unsubstantial and was less 40 % in 2006 than of 1999 that it was changed from an investing and private sector productiveness to authorities demands to foreign assistance to equilibrate the economic system. All this requires parallel actions between the PA, the givers and the Israeli governments. The Palestinian Reform and Development Plan 2008-2010 represented this procedure that aimed to return the Palestinian economic system to sustainability to what was before the 2nd intifada of Sept. 2000. The program was a PA attempt to link the policy-making procedure every bit good as the planning and budgeting in order to apportion the needful resources for economic system growing to cover the demands of all the Palestinian populations and particularly in Gaza after the closing since they present 40 % of the population.

The Expenditure Control Policy of the PRDP

The reform program aims to stabilise the PA ‘s fiscal state of affairs with a $ 1.8 billion for capital and recurrent outgos by bettering its economic system through switching the resources into development disbursement and through donor budgetary aid where these expenditures accounts the net loaning and public pay measure.

The new pay measure policy will diminish the outgos of security personal and civil services to 22 % in 2010 from 27 % in 2007 since these outgos represent 57 % of the PA ‘s GDP. Furthermore, this in add-on to the support of a reformed pension system through what the PA seeks to make through the level rate coverage system to cover the poorest proportions of Palestinians for which the payments of the pension was about $ 165 million in twelvemonth 2008 to cover approximately 170,000 employees where the PA covers about 75 % of these payments. Another control policy is the net loaning that seeks to reassign electricity from the municipalities ‘ controls into electricity distribution houses, set uping a societal system to guarantee that the hapless people have entree to electricity and cod consumer payments through electricity providers.

The Development Investment Agenda

There is a high demand for plans to be implemented such as building, private sector and authorities with a sum of 1.6 billion dollars and to guarantee that these plans are good designed and implemented and particularly those that promote the economic and trade sector through the parallel committedness of Israel, the PA and the givers. This requires an M & A ; E system and do certain that Gaza is non merely covered with human-centered aid merely but besides reform plans every bit good as polishing the intergovernmental fiscal dealingss.

The PRDP covers four sectors which are the administration ( reform of security and local authorities represent $ 330 million ) , societal ( wellness, capacity edifice and instruction represent $ 396 million ) , substructure ( sanitation, effluent and H2O represent $ 287 million ) and economic ( industry, services and agribusiness ) . The administration sector focuses on the reviewing of the public expenses and seeks to cut down costs through the reforming of the pension system and the net loaning.

For illustration, the World Bank will help the Palestinian Monetary Authority to reform its fiscal system and Palestinian Ministry of Finance to reform its public procurance system. As for the societal development, there is the exigency services support plan that will back up the educational and wellness services. The Economic development will concentrate on the facilitation of trade and economic monitoring every bit good as support, along with the United Kingdom for international development section, the endeavor acquisition fund which seeks to finance the endeavors to bring forth and market and export their goods to increase the Palestinian GDP. Finally, the substructure development seeks through implementing the exigency H2O undertaking to vouch the proviso of equal H2O services to Gazans and the exigency sewerage intervention undertaking for north Gaza to relieve environmental and wellness hazards.


The PA ‘s macroeconomic context that the Palestinian economic system would heighten when there is adequate support from givers every bit good as betterment in the jurisprudence and orders systems and the moderation of motion and less Israeli security limitations. Without foreign assistance, poorness will increase due to low incomes but if the PRDP is accurately implemented, the trade and private sector will rush economic growing. Another ground for the economic system breakability is the increasing figure of colonies which reached about 149 1s and the low contribution to Gaza since the 2006 elections and Hamas winning.

Palestinian Economy:

It was expected that after the Oslo agreements, the Palestinian economic system would heighten but it did n’t. Before the intifada, the growing rate was 8 % per twelvemonth and in 1999, the GDP was about $ 4,500 million but after the 2nd intifada, it reached about $ 3,500 million in twelvemonth 2002 and kept on decreasing over the old ages due to the political and security struggles and limitations. However, the foreign assistance and remittals every bit good as borrowing kept the private and public sector strong since 2006 and 2007 which increase a spot the GDP. Poverty and unemployment still exists in Palestine despite the high influxs of foreign AIDSs where since 2000, the unemployment reached 23 % where it was about merely 10 % . Gaza has been populating in deep poorness where after Hamas triumph ; it reached 35 % from 21 % due to the terrible closing and high unemployment rate. For illustration, if Palestinian people depend on their family incomes, so the poorness rate will increase to make 67 % if nutrient and remittals are non included. Therefore, Gaza has become a consumer and dependant on assistance where the agricultural sector was extremely affected and influenced the whole Palestinian economic system in general and on the West Bank specifically. Furthermore, Palestinians working inside Israel or in their colonies decreased from about 116,000 since the 2nd intifada to about 64,000 in twelvemonth 2007 which urged the PA to use such workers in which the employment increased from 114,000 to 150,000 that led to financial unsustainability.

Furthermore, the uninterrupted edifice of colonies and the terrible Israeli entree limitation due to security grounds, the figure of colonists increased to approximately 450,000 in 2007 and has affected the Palestinian economic system and its reform. Palestinian sellers or companies depend on the Israeli markets for their services and trade goods, but the GOI increased the figure of traversing depending on the lading system as Gaza for the transferring of goods between the WB and Israel.