From JTA, July 25, 2012: The Palestinian economy is not yet strong enough to support a sovereign state because of its heavy reliance on foreign aid, according to a World Bank report.
“The Palestinian Authority ...economy is
currently not strong enough to support such a state,” economist John Nasir said
in a statement accompanying the report, which was released Wednesday.
The PA says it is facing its worst financial crisis since it was founded in
1994, with debts of $1.5 billion and an immediate cash shortfall of $500
million, the French news agency AFP reported. Donor countries have propped
up the Palestinian economy with billions of dollars in assistance.
In the report, the World Bank said the aid has led to 7.7 percent gross
domestic product growth between 2007 and 2011, but only in government services,
real estate and other non-tradeable sectors.
“Economic sustainability cannot be based on foreign aid," the
Nasir statement said, "so it is critical for the PA to increase trade and
spur private sector growth.”