The aim of the package is to rebuild the dilapidated infrastructure of the occupied territories to stimulate growth by attracting investment from expatriate Palestinians, international investors and Arab states, the World Bank said.
The Bank recognised the need for money to go to the occupied territories as soon as possible in order to shore up the position of Yasser Arafat, the PLO chairman. Unless he can point to tangible benefits on the ground of the accords with Israel, he will be hard-pressed to carry his people with him.
'If the peace process has any hope of success, the Palestinians need to see improvements in their living conditions very quickly,' said Caio Koch-Weser, the World Bank vice president for the Middle East and North Africa. 'The programme and the funds behind it are for the immediate needs of the Palestinians and will help create a new physical and social infrastructure, provided political stability can be maintained.'
Yet, in the hype surrounding the World Bank announcement were lodged seeds of possible future obstacles to the proper disbursement of funds. Initially, the funds will be disbursed through the newly formed Palestinian Economic Council for Development and Reconstruction (Pecdar), non-governmental organisations and United Nations agencies.
The World Bank wants Pecdar to be accountable and open in its activities. It is wary of committing large sums to an organisation serving as a channel for Mr Arafat's patronage. For months, agreement was held up because Mr Arafat wanted donors to provide money to cover the running costs of his administration, including the Palestinian police force. Donors initially refused. In the end, however, Mr Arafat managed to secure pledges from some aid donors for help in current expenditure.
Pecdar has its critics among Palestinians in the West Bank too. Many feel they are being excluded in favour of PLO officials to be imported from Tunis. Furthermore, pledges are easily made. What is important for the Palestinians is the flow of cash. This remains barely a trickle. Under the plan, about dollars 200 in annual aid per person would flow into the West Bank and Gaza over the next three years.
The dollars 1.2bn, for a three year programme, is the initial instalment of dollars 2.1bn originally pledged over five years by 40 international donors in October. The largest pledges have come from the European Union (dollars 600m), the US (dollars 500m), Japan (dollars 200m), Norway (dollars 150m), Saudi Arabia (dollars 100m), Italy (dollars 80m), and Israel (dollars 75m). The World Bank's role is to help identify projects and co-ordinate expenditure. It is putting up only dollars 50m for the emergency assistance programme.
The pressing need is to create jobs to alleviate the severe unemployment. As Israel disengages further from the teeming Gaza strip, fewer Gazans will have jobs in Israel proper. At the same time, the labour pool is fast expanding as population growth surges. And thousands more will be looking for jobs when they are freed from Israeli prisons and detention centres.
Leading article, page 15
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