World Bank: Instability and Fragmentation Continue to Constrain Private Sector Growth in the Palestinian Territories

World Bank

JERUSALEM, September 11, 2014 – “Private sector is a key driver for economic growth and job creation but Palestinian enterprises have remained hostage to political instability, unresolved conflict, and continued restrictions on movement, access, and trade,” said a report published by the World Bank.

An active private sector is much needed to fuel economic and social progress in the Palestinian territories already faced with declining income and increasing unemployment,” said Steen Jorgensen, World Bank country director for the West Bank and Gaza.

Allowing mobility and access to resources is crucial to building investor confidence and developing industry and high value-added service sectors that would support a prosperous Palestinian economy and protect against future violence,” Jorgensen added.

“Panel data from Palestinian firms surveyed in 2006 and then again in 2013 show no significant growth in capital investment or employment due to the uncertainty and fragmentation,” adding: “engagement in innovative and business-upgrading activities has decreased, driven primarily by diminished level of activity among Gaza firms.”

“Political instability resulting from conflict, military rule, violence, political division, and lack of free movement and access to resources and markets remains the key obstacle to economic growth.”

“The Palestinian private sector largely remains confined to primarily small-sized firms operating with low capital investment, in a fragmented domestic market, and in relative isolation from the global economy.”

Source: WAFA