A report released today by the World Bank warns that even if the donor countries meet all of the PA's demands for aid, the Palestinian economy will continue to deteriorate if Israel does not alter mobility and trade restrictions in the West Bank.
The dire message comes ahead of the Pledging Conference to the Palestinian Authority next Monday in Paris.
The report states that if the PA implements all of Prime Minister Salam Fayyad's reforms, and if the donor countries transfer all the money to pay for these, the economic deterioration will be slowed, but not reversed.
"In order to reverse this downward cycle, the bank recommends parallel actions by the Palestinian Authority, Israel and the donors," the report says.
However, the report contends that if Israel cancels its policy of restricting mobility and trade in the West Bank and lifts the siege on the Gaza Strip, the PA "has the potential to yield double-digit growth rates." In any event, in the short term the Palestinian economy will continue to rely on outside aid.
The PA is asking for $1.9 billion in annual aid for the next three years. Of this, $1.644 billion will go for development and the remainder to pay salaries.
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