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Economy in Palestine

Wednesday, 10 March 2010 15:40


Since 1994, managed by the Palestinian National Authority (PNA), the Palestinian territories from which Israel has withdrawn, and in the course of which there has begun with the establishment of state structures and institutions. With the establishment of the PA were also initiated in collaboration with international donor countries, economic and development projects to advance the development of Palestine.

The Palestinian economy is mainly service companies (transport, communications, software and financial sector) as well as from small-and-medium-sized operated, the goods for the domestic market and export produce to Israel.  

Some industries have succeeded in spite of the difficult situation, to put it on the Middle East market, in Europe and America. These include agriculture, food, beverage and beverage and pharmaceutical industries. The largest sector in the industrial sector is the growing construction sector, which in 2007 employed 11.6 percent of Palestinian workers and 2.5 percent of GDP generated. In the Gaza Strip has also a significant IT business established. The reconstruction of infrastructure and the supply of over four million Palestinians are pushed forward despite the war and occupation owed ??difficult situation. Especially in the industry is due to the long-term development backlog backlog. To accelerate the development, the PA 2007 the Palestinian Reform and Development Plan (The Palestinian Reform and Development Plan [PRDP], three-year plan to 2010) under way, in the years 2008 to 2010 investments of more than 400 million U.S. dollars to strengthen this sector provides. Since the Palestinian capital is low, ask donor countries for years, especially in building infrastructure financial aid available.

The following fields have been reformed by the PRDP:

  • Government: improving the institutional capacity of PA reforms and new initiatives
  • Social development: improving the social security (health and education, women's empowerment, youth programs)
  • Economy and private sector: a free market economy (agriculture, industry, tourism, promotion of small-and medium-sized enterprises)
  • Public infrastructure: roads, buildings, electricity, water and wastewater

 Olive_Palestine_Woman In August 2009, Prime Minister Salam Fayyad before a government program which provides for, within two years of building effective institutions and rule of law in Palestine. The progress of implementation and the achievements made ??by the World Bank also confirmed in its report of 21 September 2010. The government has accelerated during the first half of the implementation of its reform plan. Here, the expenditure remained within their budget and an improved control system led to higher tax revenues. Thus in the first half of 2010, the income tax by 15 per cent higher than previously forecast. Compared to the previous year, tax revenues rose by 50 percent. In the first six months of this year, the economy recorded a growth in the West Bank, so that the planned real growth rate of eight percent (Gaza Strip included) can be achieved. Economic growth is partly due to increasing willingness to invest and also due to the Israeli government partly repealed by the movement restrictions. However, remains the main driving engine for economic growth, the external financial support. However, there is both in the West Bank and the Gaza Strip continues to be no sustainable development. This requires significant changes occurred in the political environment in order to reduce the dependence of the PA from its donor countries significantly.


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