Mr. Chairman, On behalf of the World Bank Group, I would like to thank President Sarkozy and France for hosting this important event, and for giving us this special opportunity to express our continued commitment to support the efforts by the international community to underwrite a viable and peaceful two-state solution to the Palestinian-Israeli conflict. We are very much encouraged with the recent developments in the region and the progress made to date. Palestinian Reform and Development Program, is a testimony to the strong commitment of the government to prepare a better future for the Palestinian people and is an excellent starting point in the path to prosperity. We strongly support the efforts to build fiscal discipline while improving service delivery. But we also understand that there may be challenges in implementing this ambitious reform program, especially in the absence of fundamental elements (such as security, access, movement), and that aid alone will not be able to deliver the desired outcomes. Therefore, we are extremely pleased to see the heightened enthusiasm of the international community to join forces with the Palestinian people for the successful implementation of this Palestinian Reform and Development Program. We all have the ability and responsibility to make a difference, and the World Bank Group is looking forward to working closely with the Palestinian Authority and our partners in development to reach this endeavor. In this context, we strongly support Mr. Tony Blair's efforts to get impact on the ground through quick win projects. We will continue to work closely with him and count on his guidance to improve our effectiveness on the ground. As you know, the course of the Palestinian economy since the Second Intifadah has left per capita GDP at 40% less than in 1999, and has altered the economy from one driven by investment and private sector productivity, to one sustained by government and private consumption, and donor aid. In order to reverse this downward cycle there is an urgent need for parallel actions by the Palestinian Authority (PA), Israel and the donors. The PRDP represents a process around which the PA, Israel and the donor community can coalesce. Embedded in the PRDP is a commitment by the PA to carry out a fiscal containment policy to be supported by a viable social protection system, including pensions, safety nets, and other fiscally responsible actions. We applaud the progress Prime Minister Fayyad and his team achieved to date. We will continue supporting their efforts for a continued and sustainable transition. In terms of spending on development projects, the PRDP reflects a frank assessment of the PA’s absorptive capacity for project implementation. It contains progressively increasing priority investments in governance, social, economic and private sector, and infrastructure development worth more than $1.6 billion over three years, which are vital for creating the necessary environment for promoting investment and trade, which will ultimately lead to more job opportunities. Jobs, created by the private sector, are the best tool to build a better future. Our economic analysis of the PRDP suggests that the critical realization of Palestinian commitments with only partial donor funding and continued movement and trade restrictions will not be able to deliver the desired outcomes. Alternatively, a scenario where the PRDP’s implementation is fully funded by donors, and where private sector activity and trade is revived through the easing of Israeli restrictions, including on Gaza, has the potential to yield considerable growth rates and positively impact poverty levels. The World Bank has been present in Palestine since 1994 and has to date committed $532 million while leveraging close to $1 billion of donor funds. The Bank’s current portfolio of 11 projects has disbursed 50% of its $118 million commitment, with the remainder of $58 million to be disbursed over the first two years of the PRDP period. Our future assistance program will be tailored to support the PRDP, and will include lending and non-lending services and technical assistance . Due to West Bank and Gaza ’s special status, we have been following exceptional procedures that involve allocation of resources from our annual income, which are then deposited to the Trust Fund for West Bank and Gaza, with the approval of our Board of Directors. The current available resources in the Trust Fund amount to $59 million will finance six projects in 2008. . As experience demonstrates, most of these operations can be leveraged with additional donors funds. For the coming year, the Bank will make a request to its Board for replenishment of a minimum of $50 million in February 2008. And going forward, we will be working with our Board to not only keep this level of support every 12 to 18 months, but to increase it as progress and conditions on the ground warrant. In addition, we stand ready to play a role in mobilizing other donor’s resources. As you know, several of our donor partners have asked the Bank to create a Multi-Donor Trust Fund to channel their budget support to the PA within the framework of a coordinated policy dialogue between the PA and the participating donors. Prime Minister Fayyad has also expressed his support for such a Trust Fund. Clearly one of the key success factors for this fund would be a critical mass of donor support. I want to reiterate that the Bank remains willing to manage a Multi-Donor Trust Fund for budget support if we can reach a critical mass of at least $300 million of funding available for disbursement in 2008. For donors who would want their disbursements to be linked with a harmonized framework for multi-donor policy dialogue with the PA and to facilitate donor funding through the PA's single treasury account, the Bank, together with the IMF, will provide regular commentary on the PA’s monitoring and evaluation reviews of PRDP implementation. Despite the current constraints on the investment climate, our private sector arm, IFC, is actively looking for opportunities for additional investments, such as telecommunications, offshore gas development and possible trade finance facilities to commercial banks, as well as increased involvement in the Palestine Mortgage Housing Finance Corporation. IFC also continues to provide advisory services , focusing on leasing, microfinance, and housing finance, which is one of Tony Blair’s initiatives. The IFC’s CEO Lars Thunell plans to visit Palestine in February to explore ways to expand IFC’s and the private sector activities in the Territories. MIGA, that provides political risk insurance to the private sector, is currently exploring ways to restructure its $30 million Guarantee Fund set up in 1998 to cover political risks, with contributions from Japan and the European Investment Bank. In addition, MIGA is engaging with OPIC in designing a political risk guarantee scheme to cover business and trade interruptions and shipping delays. Mr. Chairman, Your Excellencies, We have great expectations for the people of Palestine – my people, and the region as a whole. We hope to work closely with the international community to maximize synergies and encourage all donors to work together in supporting the successful implementation of the PRDP. Let me close by reiterating our compliments to the Palestinian Authority for a well prepared Development Program, and our commitment to support its implementation. Thank you... |
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