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Palestinian territories

Palestinian school children ride a donkey cart in al-Maghazi refugee camp market, central Gaza strip. Copyright: Suhair Karam/IRIN

Content

Economy at lowest ebb
Development potential
Priority areas of German cooperation with the Palestinian territories
Water supply and sanitation, solid waste management
Sustainable economic development and employment promotion
Institution building
Emergency aid

Situation and cooperation

Despite numerous international efforts to resolve the Middle East conflict, the peace process between Israel and the Palestinians has faltered at every turn. In the view of Germany and Europe, only the two-state solution, which involves Israel's Arab neigh­bours recognising the State of Israel, offers a chance of re­solv­ing the Middle East conflict in the long term.

Street scenery, Palestinian Territories. Copyright: BPA, BienertIn the parlia­men­tary elec­tions in the Pal­es­tinian ter­ri­tories in January 2006, the radical Islamic move­ment Hamas, regarded by many coun­tries as a ter­rorist or­ga­ni­sa­tion, won the majority of votes. In March 2007, Hamas, the mode­rate Fatah and other, smaller parties formed a National Unity Gov­ern­ment (NUG). This dis­inte­grated, how­ever, in June 2007 when Hamas seized control in the Gaza Strip. For four years, a deep internal political rift – be­tween the Gaza Strip, controlled by Hamas, and the West Bank, controlled by the Pal­es­tinian Authority – split the Palestinian ter­ri­to­ries. It was not until May 2011 that a re­con­ci­lia­tion agree­ment was signed between Hamas and Fatah. They agreed to form a joint interim government and to hold elections within one year.

The international community supports the founding of an in­de­pen­dent Pal­es­tinian state. The peace pro­cess was revitalised at a Middle East con­ference in Anna­polis in November 2007, and soon after­wards, at an inter­national donor con­ference held in Paris, around five billion euros were pledged until 2010 for build­ing a Pal­es­tinian state. Germany con­tributed 200 million euros for practical de­vel­op­ment co­op­e­ra­tion pro­jects and programmes and essential humani­tarian assistance measures. At a donor con­ference held in the Egyptian resort of Sharm el-Sheikh in March 2009, the Ger­man gov­ern­ment pledged 150 million euros of financial support to help rebuild the Gaza Strip.

Economy at lowest ebb

Israelische Soldaten kontrollieren das Auto eines Palästinensers am Checkpoint Hawera unweit von Nablus. Urheberrecht: Kobi Wolf/IRINThe economic situa­tion in the Pal­es­tinian ter­ri­tories re­mains diffi­cult. The West Bank and the Gaza Strip are geo­graphi­cally separate. More than half of the West Bank is, more­over, still con­trolled and ad­min­istered by Israel. Finan­cially, the Pal­es­tinian Autho­rity is severely under-resourced, which con­strains its ability to ful­fil its ob­li­ga­tions. Struc­tural problems such as water short­ages, a fast growing pop­u­la­tion and high un­em­ploy­ment have served to aggra­vate the situation further.

The United Nations, World Bank and International Monetary Fund acknowledge that the Palestinian Authority has made con­sid­er­able progress towards reforming public ad­min­is­tration and build­ing state struc­tures. They also contend, however, that economic de­vel­op­ment is lagging behind; that growth rates of around eight per cent in 2009 and 2010 were attri­butable primarily to aid flows from the inter­national com­munity; and that sustained economic growth requires more investment by the private sector.

Israel has built a barrier along the border with the West Bank. Restrictions on the freedom of movement of people and goods have badly disrupted economic development. The fact that all exports have to be channelled through Israel has severely hampered the transport and marketing of Palestinian goods and services. The number of Palestinians working in Israel has also fallen sharply.

In and around Gaza, there were violent clashes between Israeli forces and Hamas in late 2008/early 2009. The economy in the Gaza Strip has virtually collapsed as a consequence of the war and of Israel's closure of border crossings to the passage of people and goods. Much of the infrastructure and numerous businesses and factories have been destroyed. Raw materials and food are mostly smuggled from Egypt into the Gaza Strip through an extensive system of tunnels.

The average income in the Palestinian territories has fallen by around one third compared with the 1999 level, and increasingly large sections of the population are living below the poverty line. Unemployment stands at around 16 per cent in the West Bank and is close to 40 per cent in the Gaza Strip. Many families have used up all their savings and are now dependent on food aid. People's health status has also deteriorated; symptoms of malnutrition and undernourishment are increasingly seen, especially in children. Due to the security situation, emergency treatment is not always possible because restrictions on free movement are often too stringent to permit a hospital visit.

Development potential

There is potential for development in the Palestinian territories. Generally speaking, the Palestinian people are well trained. Many of them work abroad successfully, and are closely networked both among themselves and with their homeland. These people constitute a key factor for economic development, as they can provide financial and technical support.

Markt in Gaza City während des Ramadan. Urheberrecht: Erica Silverman/IRINA sus­tained eco­nom­ic up­swing de­pends, how­ever, upon a fun­da­men­tal sta­bi­li­sa­tion of poli­tical con­di­tions and free move­ment of goods and people. Nu­mer­ous his­tor­ic and reli­gious sites, a beauti­ful land­scape and an agree­able cli­mate could turn tourism into a growth sector. The prin­cipal pro­ducts with export poten­tial are tex­tiles and agri­cul­tural pro­ducts. Other sectors con­sidered to have growth poten­tial are the food and packaging in­dustries, chemi­cals and pharma­ceu­ticals, con­struc­tion, and in­for­ma­tion and communications.

The future of the Palestinian territories hinges, however, on finding a comprehensive political solution to the Middle East conflict.

Priority areas of German cooperation with the Palestinian territories

The German government has been actively involved in the Pal­es­tinian terri­tories since the 1980s. The aim of de­vel­op­ment co­op­e­ra­tion is to improve the living con­di­tions of the local pop­u­la­tion. Only if people have prospects for the future can peace and the establish­ment of a viable Pal­es­tinian state become reality. In terms of German inputs per head of the pop­u­la­tion, the Pal­es­tinian terri­tories are one of the leading bene­fi­ciary coun­tries of German development cooperation.

For the year 2011, the German government has pledged a total of 42.5 million euros to the Palestinian Authority. German cooperation with the Palestinian territories focuses on three priority areas:

  • Water supply and sanitation, solid waste management

  • Sustainable economic development and employment promotion

  • Institution building and strengthening civil society (governance).

Given the political instability, emphasis is increasingly placed on supporting programmes that can be rapidly implemented to create jobs and develop the social infrastructure.

Water supply and sanitation, solid waste management

Water is scarce in this region, and this scarcity generates distributional conflicts. Since 1967, the water resources have been under Israeli control.

Furthermore, the infrastructure is in a very poor condition – in some cases, the water pipes laid during the British Mandate have never been renewed, with the result that a great deal of water seeps away unused. This has serious consequences for the population. Not only is drinking water scarce; agriculture is also adversely affected by water shortages and increasing salinisation of the soil.

German support aims to improve the population's drinking water supply and, at the same time, to conserve resources by improving plant efficiency. Germany is advising the Palestinian Authority on water management and is supporting the repair and construction of the water supply network and treatment plants. More than 120,000 people now have access to drinking water from repaired wells.

Since there is a close correlation between solid waste manage­ment and the quality of ground­water, especially in the den­sely populated Gaza Strip, waste manage­ment has been inte­grated into this prio­rity area at selected loca­tions. Along with the USA, Ger­many is the largest and most im­por­tant bi­la­teral donor in the water and sanitation sector.

With the German contribution, capacities for waste­water collec­tion and treat­ment in Gaza and the West Bank will be expanded substan­tially by 2015. Around 1.2 million people will benefit from these measures, which also make an impor­tant con­tri­bu­tion to protecting coastal waters, rivers and groundwater resources.

Sustainable economic development and employment promotion

The development of an effective private sector is a key pre­re­qui­site for economic growth and the crea­tion of new jobs. German de­vel­op­ment co­op­e­ra­tion is promoting this sector on various levels.

Palästinensische Schülerinnen aus dem Dorf Al-Walaja in der Nähe von Jerusalem tragen T-Shirts mit der Aufschrift ‘Peace starts here’. Urheberrecht: Erica Silverman/IRINTogether with its Pal­es­tinian part­ners, Ger­many has ini­tiated com­pre­hen­sive job crea­tion schemes. One of the pro­grammes, for example, aims to con­struct and moder­nise more than 100 schools for around 80,000 stu­dents. All the build­ing con­tracts are awarded locally, so that small and medium-sized Pal­es­tinian com­panies bene­fit, creating more than 5,000 tem­porary jobs. At the same time, a better learning en­vi­ron­ment is created for children and young people. A pro­gramme to pro­mote voca­tional training aims to ensure that young people from all sec­tions of society benefit in addi­tion from better access to qualified training.

As a result of the German contribution, education and training provision in the Palestinian territories will be expanded substantially by 2015. Around 1.1 million students and some 30,000 teachers will directly benefit from this.

One project for the future is Jenin Industrial Estate, which is designed to bring Israeli and Palestinian private enterprises and public agencies together in order to strengthen cross-border cooperation and develop the region's economy.

Many Palestinian entrepreneurs cannot obtain loans because of the difficult environment and so a loan guarantee fund has been established. The fund takes part of the credit risk away from the banks, thus increasing their willingness to lend to small and medium enterprises and help them survive.

Institution building

To strengthen community cohesion, institutions in the Palestinian territories must work more democratically and efficiently and become more transparent and accessible for citizens. German support is provided mainly at municipal level. Advisory services are being provided to municipalities on issues of financial ad­min­is­tra­tion, muni­cipal service delivery and citizen participation.

Non-governmental organisations (NGO) are also receiving sup­port with a view to strengthening civil society in the Palestinian territories.

Furthermore, a Municipal Development and Lending Fund (MDLF) has been established to provide support to key Palestinian institutions.

Emergency aid

After the election of the Hamas government, the European Union suspended its direct financial transfers. However, the EU not only continued but expanded the provision of assistance to meet the basic needs of the Palestinian population. For this purpose, the European Commission and the World Bank set up an interim financing mechanism (the Temporary International Mechanism, TIM). In 2006 and 2007 the German government provided a total of 40 million euros via the TIM for the maintenance of public services, especially in the health and education sectors.

In February 2008 the EU decided to place its support for the Palestinian territories on a new footing. The Palestinian-European Mechanism for Management of Socio-Economic Aid (Mécanisme Palestino-Européen de Gestion de l'Aide Socio-Economique, PEGASE) is based on the development planning of the Palestinian Authority. In 2008, Germany contributed 20 million euros via PEGASE for emergency aid measures to maintain the energy supply in the Gaza Strip. In June 2009, a further 25 million euros were provided in order to ease the humanitarian situation.

Furthermore, since 2009 Germany has provided over four million euros under development-oriented emergency and transitional aid, including two million euros for the needy population of the Gaza Strip via the United Nations World Food Programme.

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