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Study: Most of West Bank’s GDP Comes from Foreign Governments

As the Palestinian Authority continues to push for unilateral declarations of statehood, a new study indicates that the West Bank economy is still being propped up by outside donations. Over 60 percent of the PA’s gross domestic product comes from donations from foreign governments and governing bodies, according to a survey conducted by economic analyst Eyal Ofer.

The report found that the Palestinian government receives an average of $1,000 for each Palestinian per year, amounting to roughly $560 each month for a family. But according to researchers, the government has still not succeeded in laying the infrastructure necessary for an autonomous state.

And perhaps unsurprisingly, the reliance on donations has actually slowed the growth of the private sector:

[A]ccording to the study, the facts on the ground indicate that the governmental apparatus and international aid organizations impede the growth of the business sector, while donations are used to preserve the ruling party rather than build a separate economy that is not dependent on foreign donations.

Ofer and Roiter are not the only ones pointing to the worrying trend. A piercing article published in UK-based the Guardian newspaper last November claimed that NGOs have become synonyms with corruption and incompetence, hinting at international donors who the paper claimed thwarted the Palestinian economic development by overinflating the aid industry without supplying long-term solutions.

The latest study reinforces this claim, pointing to the absence of an industrial sector in the Palestinian Authority. “Employers lack the ability or the will to go into industry or development, because they cannot compete with the salaries of governmental organs and that of the aid workers on the ground,” said Ofer, adding, “In reality, their economy is solely based on the trade of services.”

This news is just further evidence of how unhelpful unilateral declarations of statehood are. Yes, the country of Uruguay might “recognize” a Palestinian state, but that doesn’t mean the West Bank currently has the tools necessary to sustain itself economically.


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