New report deconstructs World Bank’s recommendations for Palestinian economy

A new report by Alaa Tartir and Jeremy Wildeman for the Palestinian Policy Network al-Shabaka takes a deep look at the role that the World Bank and international donors have had in the de-development of the Palestinian economy.

As the Ramallah-based Palestinian Authority (PA) continues to press for international donor aid due to a skyrocketing funding crisis, while Israel maintains its military occupation and economic control of the West Bank and Gaza Strip, many Palestinian economists are warning of a disastrous economic collapse.

In July, a report by the World Bank — entitled Towards Economic Sustainability of a Future Palestinian State: Promoting Private Sector-Led Growth — acknowledged that the PA must dial back its reliance on international aid, and recommended that the Israeli government remove suffocating restrictions in order to develop the private sector, something that neoliberalist PA prime minister Salam Fayyad has been advocating.

However, as al-Shabaka writes in the executive summary of Tartir and Wildeman’s report, “It is important to understand the extent to which the World Bank’s policy advice is largely destined for failure because World Bank recommendations form the basis on which international donors design their aid programs.”

The authors do a magnificent job of deconstructing the fundamental problems with the World Bank’s report, and make their own recommendations for fixing the Palestinian economic crisis — including ending Israel’s occupation and challenging Israel’s racist ideology that keeps Palestinians in deepening poverty while denying basic rights.

The report summary adds:

It is meaningless to develop aid programs for the Palestinians without taking into account the full impact of the occupation and the settler colonial project. The latest Growth Report is only useful to reveal that the Palestinian economy is in a critical state of disrepair. The World Bank’s inability to provide contextually relevant policy recommendations that properly take into account the effects of occupation make its advice irrelevant. It is time to look for alternative models of aid, ones that do not just creatively seek new ways for the Palestinians to cope with life under occupation, but rather challenge and attempt to put an end to the unjust policies of occupation. This alone can lead to real economic growth.

… In fact, the World Bank itself has adopted a policy of sanitizing the language it uses when criticizing the effects of the occupation, using euphemisms that downplay its effects while focusing on the Palestinians and PA when searching for reasons to explain why the Bank’s own recommendations have failed. The Bank perniciously ignores its own mistakes and justifies failure on account of a lack of policy resolve by the Palestinians. Often the policy recommendations it provides are so contextually inaccurate that they themselves are ridiculous and dangerous to implement, and the ones recommended in the latest growth report exemplify this fatal flaw.

Al-Shabaka’s full report can be read and downloaded here.


Nora Barrows-Friedman

Nora Barrows-Friedman's picture

Nora Barrows-Friedman is a staff writer and associate editor at The Electronic Intifada, and is the author of In Our Power: US Students Organize for Justice in Palestine (Just World Books, 2014).