The Palestinian Authority is “well-positioned” to establish a state, though it remains donor dependent and economic growth is unsustainable, the World Bank said.So how much in foreign funding will it take to see the PA through to the end of the year?
“If the Palestinian Authority maintains its current performance in institution-building and delivery of public services, it is well-positioned for the establishment of a state,” the World Bank said in a report to donor countries. “Sustainable economic growth in the West Bank and Gaza, however, remains absent.”
The West Bank and Gaza economies are heading for 8 percent growth this year, up from 7.2 percent in the West Bank in 2009 and 5.4 percent in Gaza, Oussama Kanaan, the head of the International Monetary Fund’s mission to the area said on Sept. 14. While some of the growth is due to improved investor confidence and the partial easing of restrictions by Israel, the main driver remains foreign donations, the World Bank said in its report.
The World Bank Board approved an additional $40 million grant for budget support for the Palestinian Authority today, bringing its support for the Palestinian Reform and Development plan to $120 million. The Palestinian Authority faces a $300 million to $400 million financing gap for 2010, the report said.Now this is where it gets interesting. If it takes $400milliion just to get through to the end of the year, can you imagine what it is going to cost other countries to actually establish this Palestinian state everyone is talking about?
No? Then let Egypt's Foreign Minister help:
Egyptian Foreign Minister: The cost of establishing a Palestinian state - 40-50 billionSo not only is it expected that the West Bank Arabs get their own state--they also get compensated for what they don't get. And on top of all that, other countries are expected to chip in.
According to Ahmed Abu Alrit, this cost takes into account the need to meet the needs of the Palestinians, including the provision of services to residents as well as compensation for land they lost
Egyptian Foreign Minister Ahmad Abu Alrit, said today in an interview on Egyptian television that the cost of establishing a Palestinian state after signing a peace treaty with Israel would move from 40 to 50 billion dollars. The Egyptian minister explained that this cost takes into account the need to meet the needs of the Palestinians, including the provision of services to residents as well as compensation for land they lost. He said regional countries should be drafted to cover this cost for establishing a Palestinian state is in the interests of all parties. [Google translation from the Hebrew]
That actually makes sense. All of those countries that have been kvetching that creating a second Palestinian state will bring stability to the area and make it easier to deal with Iran should be first in line to pony up the necessary $50billion to create this state. In fact, they should be happy--thrilled, even--to be able to stabilize the region. All things considered $50billion is a small price to pay.
Of course that will include the US.
Think of it as Obama's foreign stimulus package.
(Thanks anyway, Hussein!)
Technorati Tag: Mideast Peace Talks and Palestinian State.