West Bank, Gaza Peace Process “Increasingly Vulnerable” – IMF

Gaza Strip, Just 40km (25 miles) long and 10km wide, it is home to more than 1.5 million Palestinians.

Washington, 22 Rajab 1438/19 April 2017 (MINA) – The peace process in the West Bank and Gaza looks “increasingly vulnerable” due to Israel’s “stepped up” settlement approvals in early 2017 despite the UNSC’s resolution condemning them, KUNA quoted as saying a report by the International Monetary Fund (IMF) on Tuesday.

“The domestic situation remains unsettled, with municipal elections planned for May in the West Bank,” the report noted.

“While growth edged up to an estimated four percent in 2016, ongoing constraints and political uncertainty have eroded the economy’s productive capacity” which points to “a sobering outlook,” the report said.

Without a breakthrough to the peace process, growth is projected at 3.3 percent and is not enough to reduce unemployment or boost per capita incomes, it pointed out.

The outlook faces “significant” risks such as reduced donor support, escalating unrest, geographic fragmentation and strained relations between Israeli and Palestinian banks, according to the report.

These “persistent financing gaps require further fiscal adjustment” to which the IMF made a priority in 2017 to reduce the USD 800 million financing gap, “by restraining non-priority current spending and looking for scope to raise revenue.”

The report concluded that, “Strengthening public financial management is a priority reform that could generate significant payoffs by supporting fiscal adjustment, but requires support across government. Increasing the predictability of revenue transfers from Israel and reversing the decline in aid will reinforce domestic efforts to secure fiscal sustainability”. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)