The World Bank warned of a worsening of the fiscal crisis in the Palestinian economy on Wednesday, unless Israel eases restrictions on the West Bank, and foreign funding increases.
In a statement, Mariam Sherman, the World Bank's country director for the Palestinian terrorities said, "Donors do need to act urgently in the face of a serious fiscal crisis facing the PA (Palestinian Authority) in the short term."
"sustainable economic growth cannot be achieved without the removal of the barriers preventing private sector development, particularly in Area C".
Whilst the Palestinian Authorities had made "credible efforts" towards addressing the crisis she said, the Israeli restrictions "remain the major impediment", such as the difficulty foreign investors faced in obtaining Israeli entry permits into even the West Bank, and the ban on importing "dual use" items - ie. anything that Israel fears could be used in weaponry.
"The most important message of this report is that economic cohesion is not achievable when the areas in which people have to operate and go about their business are crisscrossed by impediments," said Sherman.
In a report released ahead of the Palestinian aid conference in New York next week, the World Bank warned of a $1.5 billion deficit in the Palestinian Authorities' budget in 2012.
