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Area C and the future of the Palestinian economy (English)

Restrictions on economic activity in area C of the West Bank have been particularly detrimental to the Palestinian economy. Area C constitutes about 61 percent of the West Bank territory. Area C is richly endowed with natural resources and it is contiguous, whereas areas A and B are smaller territorial islands. Mobilizing the area C potential will help a faltering Palestinian economy. Since area C is where the majority of the West Bank's natural resources laid, the impact of these restrictions on the Palestinian economy has been considerable. Thus, the key to Palestinian prosperity continues to lie in the removal of these restrictions with due regard for Israel's security. This report shows that rolling back the restrictions will bring substantial benefits to the Palestinian economy and can usher in a new period of increasing Palestinian gross domestic product (GDP) and substantially improve prospects for sustained growth. This report examines the economic benefits of lifting the restrictions on movement and access as well as other administrative obstacles to Palestinian investment and economic activity in area C. It focuses on the economic potential of area C and does not prejudge the status of any territory which may be subject to negotiations between Palestinians and Israelis. The authors examine potential direct, sector-specific benefits, but also indirect benefits related to improvements in physical and institutional infrastructure, as well as spillover effects to other sectors of the Palestinian economy. Realizing the full potential of such investments requires other changes as well - first, the rolling back of the movement and access restrictions in force outside area C, which prevent the easy export of Palestinian products and inhibit tourists and investors from accessing area C; and second, further reforms by the Palestinian authority to better enable potential investors to register businesses, enforce contracts, and acquire finance.


  • Author

    Cali,Massimiliano, Nasser Eddin,Nur, Niksic,Orhan

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  • Country

    West Bank and Gaza,

  • Region

    Middle East and North Africa,

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  • Doc Name

    Area C and the future of the Palestinian economy

  • Keywords

    asymmetric digital subscriber line;Land and Water Resources;real gross domestic product;efficiency of tax collection;Access to Education;restrictions on trade;private sector activity;movement of people;general equilibrium model;foreign direct investment;real estate development;control of land;privileges and immunity;place of work;quality of transportation;freedom of movement;vulnerability of communities;level of private;reduction in unemployment;availability of water;water and wastewater;consumer price index;built up area;demand for output;information and communication;tourism tourism;lack of water;access to water;reduction in budget;number of wells;movement of worker;movement of labor;Private Sector Growth;public sector service;output per worker;private investment rate;waste treatment plants;access restrictions;institutional infrastructure;Natural Resources;stone mining;budget support;national account;peace process;manufacturing sector;internal trade;movement restriction;open economy;tradable sector;global marketplace;mineral exploitation;multiplier effect;construction permit;unemployment rate;telecommunications sector;military force;fertile land;construction sector;production input;potential contribution;severely limits;non-profit organization;security concern;donor assistance;regulatory measure;consumer good;consumer goods;administrative impediment;israeli citizen;housing price;commercial building;construction material;Fiscal Sustainability;water source;price effect;fiscal data;regional divergence;mobile service;productive activity;access road;unemployment figure;public expenditure;industrial plant;Public Services;communication service;mineral production;underground aquifer;real value;global tourism;original work;productive sector;investment climate;Land Registration;additional revenue;future need;transitional period;wastewater treatment;utility line;water conveyance;spring water;investor confidence;study area;agricultural labor;labor productivity;restricted access;labor movement;mineral processing;agricultural production;export base;administrative boundary;international boundary;expected return;commercial purpose;non-governmental organization;banking service;international partners;export industry;potential investment;construction industry;acute need;fiscal benefit;domestic supply;potential output;fiscal position;water reservoir;copyright owner;tax revenue;fiscal deficit;recurrent budgets;negative growth;field crop;fruit tree;political environment;trade restriction;input mix;municipal boundaries;personal communication;state land;transportation infrastructure;telecommunications infrastructure;private property;military training;military base;Road Networks;forest land;bureaucratic constraints;economic infrastructure;conservative assumption;sum equivalent;net effect;agricultural land;valuable mineral;settlement population;large deposit;annual sale;potential investor;negligible amount;raw material;communication services;physical barrier;security risk;electromagnetic spectrum;agriculture sector;small area;private capital;Public Infrastructure;application process;nature reserve;binding constraint;



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Cali,Massimiliano Nasser Eddin,Nur Niksic,Orhan

Area C and the future of the Palestinian economy (English). A World Bank study Washington, D.C. : World Bank Group.