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West Bank and Gaza
>> Regional Overview >> West Bank and Gaza Overview
Summary Tables
Program Summary
Previous Years' Activities
2001, 2000, 1999, 1998, 1997Last updated: 56
Introduction
The first nine months of 2000 were characterized by relatively open borders between the Palestinian areas and Israel, a high degree of cooperation between Israelis and Palestinians in the sphere of development, and an increasing level of trade and investment. By September 2000, the Palestinian economy had registered 7% growth for the year and Palestinian unemployment had decreased to approximately 11% (down from a high of 25% in 1996). Moreover, negotiations between Palestinians and Israelis regarding permanent status issues were ongoing and seemingly making progress, even if no agreement had yet been achieved.
On September 29, 2000, the Al Aqsa Intifada (uprising) began, resulting in a series of protracted closures by the Government of Israel, which has greatly limited the movement of people and goods between Israel and the West Bank and Gaza, and within the West Bank and Gaza. As a result, between September 2000 and February 2001, unemployment increased to approximately 40%, direct economic losses were estimated at 51% of Gross Domestic Product, and average poverty rates climbed by 50%. The United Nations estimates that by the end of 2001, approximately one out of two Palestinians will be living in poverty if no significant improvements take place in the current situation. Furthermore, the fiscal condition of the Palestinian Authority (PA) has deteriorated significantly as a result of the slowdown in economic activity, the increase in the cost of providing PA-supported services, and the refusal of Israel to transfer tax receipts owed to the PA. The PA has struggled to pay the salaries of civil servants and provide basic health and social services at a time when the PA's budget deficit has increased four-fold since September 2000.
During the next 12-24 month transition period, USAID's program of assistance will promote regional stability by addressing the humanitarian needs of the Palestinians living in the West Bank and Gaza and promoting select economic and democratic institutions.
Status of Wye Funding
In FY 2000, USAID provided approximately $45 million in Wye funds to improve community services in rural areas of the West Bank and Gaza; strengthen the rule of law; design border industrial estates; support a master's degree scholarship program; and enhance the health status of mothers and their children. These areas are consistent with the Congressional Notification submitted to Congress on Wye supplemental funding in November 1999. Following the outbreak of violence at the end of FY 2000, USAID suspended other activities previously notified as part of the Wye supplemental funding, including the Gaza seaport, Nablus-Jenin road, procurement of container scanners, a Department of Justice program to train prosecutors and civil police, and construction of border industrial estates. Funds for these projects are being reallocated to other activities.
In addition to ongoing annual assistance, USAID will provide $355 million of Wye funds during FY 2001 and FY 2002 to improve community services in additional villages and municipalities; to enhance the health of Palestinian mothers and their children in rural areas; to develop village water networks; to design and construct two wastewater treatment plants in the West Bank and one desalination plant in Gaza; to provide additional support for a master's degree scholarship program; to strengthen the capacity of the Palestinian Industrial and Free Zones Authority and other authorities responsible for promoting trade, and to design/refurbish local industrial estates; and to train lawyers, judges and prosecutors and improve the quality of Palestinian law schools.
Development Challenge
The USAID West Bank and Gaza program is designed to promote stability in the region, to improve the quality of life of Palestinians, and to contribute to long-term, sustainable development. Some of the basic constraints to development that have been exacerbated by the current uprising include nascent institutions of governance; limited modern infrastructure; limited natural resources, especially water; geographic separation of the West Bank and Gaza; a rapidly expanding population; and a volatile political and security environment. The latter has constrained economic growth, curtailed investment, and increased poverty.
In response to these challenges, between FY 1996 and FY 1999, USAID concentrated resources in three strategic areas: water resources, private sector growth, and democracy/governance. Since FY 1999, USAID has increased support for two additional areas-maternal/child health and village-level community services. With Wye funding, higher education has also been added to the portfolio.
Objective #1 (294-001): Expanded Economic Opportunities. As a result of the current crisis, leading economic indicators markedly declined between September 2000 and May 2001. USAID programs address constraints to private sector growth that are particularly important in this environment, specifically by increasing access to credit for small and microenterprises, expanding the local market share of Palestinian firms, and supporting the development of a comprehensive regulatory framework to promote commercial transparency.
Objective #2 (294-002): Increased Access to and More Efficient Use of Scarce Water Resources. A grossly inadequate supply of water for household consumption, agricultural production and industrial development, and an inadequate system for effectively eliminating water sewage, are major obstacles to long-term sustainable development in the West Bank and Gaza. The difficulty of bridging the gap between potential demand and available supply of water for Palestinians in the West Bank and Gaza is further exacerbated by anticipated high rates of population growth. Since 1996, USAID-funded activities have directly supported increasing the level of potable water in the West Bank and eliminating the presence of raw sewage from the streets of Gaza. Activities planned over the next several years under this objective are aimed at developing and implementing a long-term sustainable solution to the acute shortage of water through the construction of water wells and the development of a village water network, and addressing the sewage problem through the construction or expansion of several wastewater treatment plants.
Objective #3 (294-003): More Responsive and Accountable Governance. Following the establishment of the PA and the 1996 elections, USAID assisted the Palestinians to focus on further transition toward democratic self-rule through the establishment of a government system based on democratic checks and balances, and the development of accountable and transparent governance. As a result of the current crisis, USAID will focus increased resources on strengthening the management and programs of Palestinian civil society organizations. In addition, a program to strengthen the rule of law by supporting the judiciary and legal profession was initiated in FY 1999 and will be further supported in FY 2001 and FY 2002. Additional resources in FY 2001 and FY 2002 will be invested in improving the still nascent Palestinian institutions (e.g., civil society, Palestinian Council, and local governments).
Objective #5 (294-005): Selected Development Needs Addressed. Between 1996 and 2000, USAID responded to important political initiatives through this objective. For example, as a result of the Hebron Protocol in FY 1997, USAID funded the renovation of Shuhada Road, a main Palestinian thoroughfare in Hebron. In FY 2000, assistance was provided to design the Nablus-Jenin road. However, given the current situation, USAID is not planning to provide assistance for the construction of the road. In FY 2000, USAID also began to support higher education opportunities for Palestinians through a U.S.-based scholarship program. In FY 2001 and FY 2002, additional assistance will be provided to initiate a program of U.S.-based short-term training and internships for Palestinians and to establish an endowment mechanism to promote higher education opportunities for Palestinians over an expanded time horizon.
Objective #7 (294-007): Maternal-Child Health Care Improvements Demonstrated. The most serious health problems facing mothers and children in the West Bank and Gaza derive from high fertility with short birth intervals, along with weaknesses in clinical and outreach services. In FY 2000, USAID refurbished and equipped 25 rural health clinics under a pilot health project. In FY 2001 and FY 2002, USAID will expand maternal-child health activities to a greater number of rural villages and will also provide emergency assistance (e.g., medical supplies, training and equipment) to Palestinian health providers.
Objective #8 (294-008): Community Services. Inadequate access to basic services along with high unemployment and low income levels are factors that have lead to despair and frustration at the community level, and threatens to undermine popular support for peace initiatives. USAID support, through U.S. private voluntary organizations, local nongovernmental organizations, and public international organizations, will revitalize community-level infrastructure, improve basic services, and reach disadvantaged groups, while at the same time provide needed jobs in under-served communities.
Other Donors
The U.S. Government, the European Union (EU), Germany, Japan, Norway, and the World Bank are the lead donors in the West Bank and Gaza. The Arab League has also provided significant assistance to the Palestinians. Notwithstanding the violence and impediments to program implementation resulting from Israeli closure measures imposed on and within the West Bank and Gaza, most donors have maintained their levels of assistance. However, there has been a shift in programming toward ameliorating high unemployment and rising rates of poverty, as well as responding to the emergency health situation. The World Bank, for example, has provided $12 million in immediate assistance to support emergency job creation activities, and the EU, Norway, the Netherlands, and Japan have provided support through the United Nations Relief and Works Agency. In addition, the EU and the Arab donor countries have provided budget assistance to the Palestinian Authority to address the large current budget gap.
FY 2002 Program
The FY 2002 program has the following objectives:
- Lending for small and microenterprises, support for Palestinian business organizations, development of infrastructure at two local industrial estates, technical assistance to strengthen the Palestinian Industrial and Free Zone Authority and the Palestinian Investment Promotion Agency, and policy initiatives to improve the legal and regulatory framework;
- Development of new water supplies for household consumption and village water distribution systems, repairing and installing transmission/distribution and waste/storm water systems, and design and construction of two new wastewater treatment plants in the West Bank and one desalination plant in Gaza;
- Enhancement of Palestinians' capacity to participate in and influence the governing process through support for local civil society organizations, and development of democratic institutions (the legislature, judiciary and local government entities) to better meet their needs in a transparent and efficient manner;
- Improvements in maternal child health care services provision; and
- Increased and improved community services responding directly to a range of priority service needs as defined by Palestinian communities; and selected development needs, including improved higher education through a U.S.-based scholarship program.
In addition to bilateral program activities, USAID's Bureau for Humanitarian Response implements a program in the West Bank/Gaza to demonstrate U.S. education and medical technologies and practices.
Activity Data Sheets
- 294-001 Expanded Economic Opportunities
- 294-002 Greater Access to and More Effective Use of Scarce Water Resources
- 294-003 More Responsive and Accountable Governance
- 294-005 Selected Development Needs Addressed
- 294-007 Healthier Palestian Families
- 294-008 Improved Community Services
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State Dept. Country Information
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Last Updated on: May 29, 2002 |
