World Bank: Sustainable Palestinian economic recovery impossible under West Bank restriction system

JERUSALEM, May 9 2007 – As part of its ongoing analytical work on Palestinian trade facilitation and economic revival, the World Bank released its latest report today, entitled Movement and Access Restrictions in the West Bank: Uncertainty and Inefficiency in the Palestinian Economy.

While acknowledging Israel's legitimate security concerns, the report examines the wider context and implications of the current access situation in the West Bank. It notes that although physical impediments are the visible manifestations of closure, the means of curtailing Palestinian movement and access are far more complex and are based on a set of administrative practices and permit policies. The resulting system, while enhancing Israeli security, is also aimed at protecting and enhancing the free movement of settlers and the physical and economic expansion of the settlements at the expense of the Palestinian population. In particular, the routing of the separation barrier, the system of restricted West Bank roads, the control of the Palestinian population registry and restrictive zoning and land use rules and practices are aimed primarily at serving the settler population.

Drawing on extensive work undertaken by UN OCHA and others, the Bank report notes that the restriction system has fragmented the West Bank into 10 economically isolated cantons, severed Palestinian economic, social and physical links to Jerusalem and denied Palestinians access to some 50% of West Bank land for economic purposes.

According to David Craig, World Bank Country Director for the West Bank and Gaza, this has devastated the Palestinian economy. "The restriction system has caused a rise in transaction costs, making Palestinian goods increasingly uncompetitive. Even more importantly, the system has created such a high level of uncertainty and inefficiency that the normal conduct of business in the West Bank has become exceedingly difficult and investment has been stymied," he said.

"Palestinian economic revival is predicated on an integrated economic entity with freedom of movement between the West bank and Gaza and within the West Bank, unfettered Palestinian access to West Bank land for economic purposes, and reliable access to world markets," Craig added. "The restriction system has significantly undermined these conditions. Restoring sustainable Palestinian economic growth is dependent on its dismantling."