A new report from the World Bank urges greater access for Palestinians in the Occupied Territories to land in Area C. More than half the land in the West Bank, much of it agricultural and resource rich, is inaccessible to Palestinians. The first comprehensive study of the potential impact of this "restricted land," released by the World Bank on Oct. 8, sets the current loss to the Palestinian economy because of these restrictions at about $3.4 billion.
With growth of approximately 6 percent annually needed to absorb new entrants to the labor market, let alone making a dent in the soaring rate of youth unemployment, urgent attention is needed to find ways to grow the West Bank economy and create jobs, according to the World Bank. A vital economy is essential for citizen well-being, social stability and building confidence to underpin the challenging political negotiations, however, the Palestinian economy, which currently relies on donor financed consumption and suffers from ongoing stagnation of the private sector, is unsustainable, World Bank analysts argue. The report estimates that if businesses and farms were permitted to develop in Area C, this would add as much as 35 percent to the Palestinian GDP.
"Area C is particularly important because it is either off limits for Palestinian economic activity, or only accessible with considerable difficulty and often at prohibitive cost. Since Area C is where the majority of the West Bank's natural resources lie, the impact of these restrictions on the Palestinian economy has been considerable," World Bank researchers wrote. "Thus, the key to Palestinian prosperity continues to lie in the removal of these restrictions with due regard for Israel's security."
The volume of increased economic activity because of access to Area C would greatly improve the PA’s fiscal position, according to the report. The World Bank estimates PA government revenues would increase by $800 million, which would cut the fiscal deficit by half, hence reduce the need for donor support, and reduce unemployment and poverty rates.
“Access to Area C will go a long way to solving Palestinian economic problems,” said Mariam Sherman, outgoing Country Director for the West Bank and Gaza. “The alternative is bleak. Without the ability to utilize the potential of Area C, the economic space will remain fragmented and stunted. Lifting multiple restrictions could transform the economy and substantially improve prospects for sustained growth.”
Area C constitutes 61 percent of the West Bank and is the only contiguous land connecting 227 smaller separate and heavily residential areas. The 1993 Oslo Peace Accords stipulated that Area C be gradually transferred to the Palestinian Authority (PA) by 1998. This transfer has never taken place.
"The densely populated urban areas of the West Bank usually command the most attention," said Sherman. "But unleashing the potential from that ‘restricted land’—access to which is currently constrained by layers of restrictions—and allowing Palestinians to put these resources to work, would provide whole new areas of economic activity and set the economy on the path to sustainable growth."
Freeing economic activity in Area C would have a particularly high impact on the development of businesses in agriculture and Dead Sea minerals exploitation, stone mining and quarrying, construction, tourism, and telecommunications, according to the report. Other sectors would be able to benefit from improvements in the quality and cost of infrastructure and increased demand for goods and services.
