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| >> Regional Overview >> West Bank and Gaza Overview | |||||||||||||||||||||
THE DEVELOPMENT CHALLENGE: Since the Al Aqsa Intifada (uprising) began in September 2000, the social and economic situation of Palestinians in the West Bank and Gaza has dramatically declined. The most direct economic hardship is the loss of an estimated 75,000 Palestinian jobs in Israel; including family members, this loss has affected some 750,000 Palestinians. Unemployment has jumped from 10% to 38% and the estimated percentage of the population living under the poverty rate of $2 per person per day has jumped to 46%. Total income losses arising from Israeli-imposed border closures amount to around $2.4 billion, in addition to over $300 million in infrastructure damage. Estimated losses include decreased domestic output and income, lost labor income from Israel, damage to property and structures, costs of additional burdens on health and social services, and decreased revenue transfers from Israel. These losses are catastrophic to an economy with an annual gross domestic product (GDP) of approximately $4.75 billion before September 2000. The massive disruption in the Palestinian economy has directly affected the ability of the Palestinian Authority (PA) to pay civil service salaries and deliver basic services. USAID believes that the projected 19% further decline in Gross National Income per capita coupled with sustained and further tightening of the closures will lead to a much greater scale of human hardship. The development problem that has confronted USAID since September 2000 is how to relieve the increasing suffering of ordinary Palestinians through appropriate "emergency" projects while maintaining a longer-term developmental approach. USAID has reprogrammed significant funds for emergency response activities that address urgent and critical needs. USAID has obligated more than $54 million for this purpose and has plans to obligate an additional $83 million during fiscal year 2002, for a total of $137 million. These emergency response projects include employment generation, microenterprise financial services, emergency health services, improved service delivery through nongovernmental organizations (NGOs), increased support for the United Nations Relief Works Agency (UNRWA), and expansion of small infrastructure projects. USAID has also maintained programs that address other basic needs, i.e., water and health that contribute to the development of institutions necessary to sustain essential services. THE USAID PROGRAM: USAID plans to use $323,445,569 from prior year funds and $72,000,000 in ESF in FY 2002 funding. USAID requests $75,000,000 in ESF in FY 2003. USAID will use FY 2002 funds to implement projects to ensure efficient development of the private sector; develop new water resources; improve democracy, governance, and the rule of law; increase access for mothers and children to higher-quality healthcare; provide basic community services; and ensure access to higher education and training for a broad range of Palestinians. Despite the violence and other challenges associated with the situation, USAID has achieved meaningful results during the past 15 months, has helped avoid a more serious crisis from emerging, and has laid the basis for the advancement of important US foreign policy goals. While USAID has altered the manner in which it does business in the West Bank and Gaza, a strategic focus has been maintained and oversight responsibilities are uncompromised. ONGOING PROGRAMS FOR WHICH NO FY 2002 OR FY 2003 FUNDING IS REQUESTED: None. OTHER PROGRAM ELEMENTS: In FY 2000, USAID received Wye Supplemental Funds in addition to its annual operating year program budget. Wye funds are being used to develop new water resources in Gaza and the West Bank, principally through construction of a Gaza Desalination Plant and Regional Water Carrier. Combined, these two projects will provide a regular supply of fresh water to approximately one million people in Gaza for the first time. Wye also funds community services projects, which provide villagers throughout the West Bank and Gaza with new and improved infrastructure, including new agricultural roads, water cisterns and new small water wells, school playgrounds, and other village level projects. Wye funds also have contributed to emergency response activities, including major employment generation projects and UNRWA activities that respond to the most pressing needs of the poorest Palestinians. Wye funds are used to pay for higher education and training programs, which offer Palestinians the opportunity to receive further training and education in the United States and within the West Bank and Gaza. The Wye funds also pay for a significant maternal and child healthcare project, which includes training, health clinic upgrades, and healthcare system design and implementation. Finally, Wye funds rule of law projects that aim to train Palestinian lawyers and judges to ensure that the rule of law is observed throughout the judicial system. OTHER DONORS: From March through December 2001, Arab League members, through the Islamic Development Bank, provided $405 million and the European Union provided $115 million in direct budgetary support to the Palestinian Authority. USAID's traditional donor partners are the World Bank (emergency employment, NGO development, and village level improvements), Norway (small-scale infrastructure), Japan (small-scale infrastructure), the United Nations (employment generation, refugee assistance, and grass roots development), and Germany (water infrastructure). In conversations with USAID, all the traditional donors indicate that they intend to sustain long-term programs at or above current levels despite project implementation problems due to the uprising. Donor coordination in the West Bank and Gaza is highly organized, with several layers of donor coordination mechanisms. A Task Force on Project Implementation, which includes representatives from USAID, the European Union, the United Nations, and the World Bank, works closely with Israeli government officials to facilitate donor project implementation. The Joint Liaison Committee (JLC) includes the leading donors, and Israeli and Palestinian counterparts. Since the uprising started, the JLC donors have met on a regular, albeit informal basis. The Ad Hoc Liaison Committee (AHLC) consists of high-level decision-makers from capitals that discuss broad policy issues concerning donor work in the West Bank and Gaza in the company of Israeli and Palestinian representatives. To respond to the unfolding humanitarian crisis, the donors formed the Humanitarian Task Force for Emergency Needs (HFTEN), which provides continual analysis of the situation to all donors, the Palestinians, and the Israelis. Program Data Sheets
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