Herzliya – 1 February 2010 The Role of Economics in Conflict Resolution Sir Ronald Cohen

2 Palestinian Economy Real GDP per capita has declined 34% in real terms s i n c e

3 Israel and the Palestinian Economy

4 Unemployment  Palestinian unemployment is high at approx 25%.  42% unemployment in Gaza and 18% in West Bank (Q3 2009).  In Gaza, 50% of employment is with Government, 16% in West Bank.

5 Palestinian Private Sector Progress  New telecommunications company, Wataniya Palestine, launched on 1 November: $700m of investment, thousands of jobs and over $350m of fiscal revenue for the PA expected.  Groundbreaking of Rawabi, the first Palestinian planned city, took place in early 2010: The Portland Trust facilitated and actively promoted the project of 5000 housing units, modern infrastructure, public services and commercial opportunities. Thousands of jobs and $500m plus of investment expected.  The Palestine Investment Fund also launched two affordable housing projects in 2009 – Al Reehan outside Ramallah (2,000 units) and Al Jinan neighbourhood outside Nablus (1,000 units).

6 Grant Leveraging Facility  Resources for development need to be used as efficiently as possible.  The Portland Trust recommends that donors establish a Grant Leveraging Facility to attract private sector investment for large economic infrastructure projects.  The facility will provide a layer of grant funding (for example 15%) to attract the balance in private sector finance.  $250m of aid used in this way could attract $1.5bn private sector finance.  Pipeline includes major projects in energy sector, water management, waste management, industrial manufacturing and others.

7 42 Portland Place London W1B 1NB Azrieli Menachem Begin Road Tel Aviv P.O. Box Al Bireh 4102 Ramallah Al Masyoun Website: The Portland Trust