World Bank approves $30m grant to support Palestine

Search and rescue works are conducted after airstrikes by Israeli army hit residential buildings in Gaza (Ashraf Amra - Anadolu Agency)

Jennifer Gnana

The National  /  May 29, 2021

Poverty among Palestinians living in the densely populated Gaza Strip is expected to undergo ‘a dramatic increase’.

The World Bank approved a $30 million development policy grant to Palestine to support the implementation of digital initiatives to strengthen its economy, help it recover from the pandemic-induced slow down and to improve governance.

The grant will help provide financing to ease fiscal stress caused by the Covid-19 pandemic and the Israeli bombardment of Gaza.

Poverty among Palestinians living in the densely populated Gaza Strip is expected to undergo a “dramatic increase”, the Washington-based multilateral lender said on Saturday.

Every second Palestinian in Gaza is currently living below the poverty line, according to World Bank estimates.

“With the continuation of the Covid-19 crisis and the impact of the 2021 Gaza conflict, the poverty rate is expected to have further increased,” the World Bank said.

The lender’s announcement comes after the UN launched a snap appeal of $95 million to help Palestinians rebuild their lives after an 11-day conflict with Israel. While the reconstruction costs are expected to run into billions of dollars, the UN’s appeal aims to meet the short-term needs of Palestinians.

“The development policy grant offered by the World Bank will support the already fragile fiscal situation,” Kanthan Shankar, World Bank country director for West Bank and Gaza, said.

The grant will also be directed towards the reconstruction and recovery efforts in Gaza, where healthcare infrastructure, including the strip’s only Covid-19 testing centre, was destroyed by Israeli air strikes.

“To help estimate these needs, the World Bank is partnering with the United Nations and the European Union to undertake a Rapid Damage and Needs Assessment,” Mr Shankar said.

Ahead of the latest Israeli bombardment on Gaza, the World Bank approved a four-year strategy for Palestine focusing on protecting lives and creating jobs amid the pandemic.

Palestine’s economy shrunk by 11.5 per cent last year, one of the sharpest contractions on record, and only a modest recovery is expected this year as its overwhelmed healthcare sector struggles to deal with new infections.

The World Bank said earlier this year that it expects the Palestinian economy to grow by 3.5 per cent in 2021 after social-distancing measures affected the growth of the tourism and construction sectors, as well as parts of the service industry such as restaurants.

The estimates are likely to be revised following further destruction of Gaza’s critical infrastructure due to Israeli attacks.

The latest disbursement by the World Bank will support the Palestinian Authority’s five-year priorities under the National Policy Agenda 2017-2022.

The development policy grant will support reforms in building the foundations of a digital economy through the adoption of a modern telecoms and information technology law.

The program will also support setting up of e-payment companies and boost connectivity within Palestine.

In April, the World Bank said the government’s fiscal deficit of more than $1 billion, which is at its highest point in years, and declining government revenue will “depress investment and squeeze out urgent spending”.

The multilateral bank provided a $9m grant to Palestine’s Innovative Private Sector Development Project in March to support start-ups and small and medium-sized businesses through financial and technical assistance.

It also approved a grant of $20m to improve access to high-speed broadband services in Palestinian territories in the same month.

Jennifer Ganan – Journalist