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World Bank Urges Focus on Palestinian Economy

G7 Aid Pledge to Palestinians ‘Unconditional’ but ‘Insufficient’: Fayyadh

World Bank Urges Donors to Focus on Palestinian Economy

PNA Finance Minister Salam Fayyadh said Saturday that the promise by the Group of Seven nations in Dubai to increase financial assistance to the Palestinians was “without conditions,” adding however that the package pledged by the G-7 was “insufficient.” Fayadh requested 1.2 billion dollars in emergency humanitarian and budget support for 2004.

"We have agreed to review the prospects for increased financial assistance to the Palestinian Authority in the short term," said a G7 statement after a meeting between its finance ministers and their Palestinian counterpart, Salam Fayyadh.

"We will advocate that the World Bank replenish the Trust Fund for the West Bank and Gaza this fall. We urge other members of the international community to increase and accelerate their assistance provided to the Palestinian Authority," the statement added, although without giving figures.

"We are concerned about the current humanitarian situation and fully support the peace process," it continued, also applauding Fayyadh’s "reform efforts to improve transparency in the budget" of the Palestine National Authority (PNA).

Fayyadh presented the meeting with a plan "to maximize the scope and pace of economic recovery, reconstruction, rehabilitation and medium-term development" for 2004 and 2005.

"The general approach is to emphasize requirements for 2004. Under various scenarios, it is envisaged that a resource base of 1.2 billion dollars will be required for 2OO4, in line with the recent experience," said a note on the Palestinian plan handed out to journalists.

"Such a resource base for 2004 would include requirements for sustained emergency and humanitarian assistance and budget support; existing commitments for projects" under planning or execution, it added.

Karim Nashashibi, the IMF resident representative in the occupied Palestinian territory, told a news conference that US$200 million of the pledged assistance will be in direct support for the PNA budget for the rest of the year and the remainder for rehabilitation and reconstruction of the infrastructure.

Nashashibi said peace would benefit both the Palestinian and Israeli economies, noting that Fayyadh told the G7 meeting that the Palestinians will not need any budgetary support "as soon as we go back to normal mode."

World Bank Urges Donors’ Focus on Palestinian Economy

Separately, World Bank director for the occupied Palestinian territory, Nigel Roberts, warned Saturday that Palestinian economic situation was "both tragic and dangerous." The PNA needs at least $1 billion a year from donors to keep its economy going, he said on Saturday.

"We're talking roughly $1 billion a year and if we can maintain or slightly exceed that I think we'll be doing very well," Roberts told reporters in Dubai.

He urged donors to keep a focus on the Palestinians as their attention turns to raising funds for Iraq. Donors are due to meet in Europe in November to discuss raising money for the West Bank and Gaza Strip. The meeting will follow a donor conference for Iraq scheduled for the end of October.

"The Palestinian issue is absolutely critical to the region and also internationally so the priority that the international community needs to give to that is extremely high," he said.

Roberts said "it looks tough" to ensure donor funds keep flowing to the Palestinians at the same time as the global community is passing round the hat for Iraq and Afghanistan.

But he cited Saturday’s meeting of the Group of Seven finance ministers with Palestinian officials as a sign that interest in the West Bank and Gaza is there.

Most of the donor money is expected to come from Europe, other Arab countries and the United States.

The US-backed “roadmap” peace plan envisaging a Palestinian state in Israeli-occupied territory has been derailed by a relapse into a tit-for-tat violence over the past month with Washington largely preoccupied by turmoil in Iraq and a looming election campaign.

"The current situation in which there is a great deal of political uncertainty is obviously not the situation you want to see when you're raising funds," said Roberts.

"But this is something that has only been an issue as of the last couple of weeks so what we're looking at is a process of trying to address these needs over a much longer period," he added.

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