AHLC Chair: Palestinian economy cannot reach its full potential

The Chair of the Ad Hoc Liaison Committee (AHLC), Foreign Minister of Norway, Ine Eriksen Soreide, said that the Palestinian economy cannot reach its full potential before the Palestinians get full access to their land and resources.

"The Palestinian economy cannot reach its full potential before the Palestinians get full access to their land and resources, and they can move and trade inside and outside their own territory," said Soreide at the virtual AHLC meeting. "Therefore, the international donor community urges the parties to demonstrate, through policies and actions, a genuine commitment to the two-state solution and to create a path back to meaningful negotiations on a comprehensive political settlement."

The AHLC was established to promote cooperation between the parties and the donor community in support of the two-state solution, development of the Palestinian economy, and institution-building for a Palestinian state, said the Norwegian Foreign Minister, stressing, "The donor community – to include the United States – expressed their support for the AHLC agenda and the shared objectives of advancing freedom, security, and prosperity for the Palestinian people."

Soreide said that the immediate priority of donors should be to alleviate the burden on the affected population, strengthen the Palestinian public health system, and stimulate economic recovery.

"Last year was extraordinarily challenging for the Palestinian economy. The Covid-19 pandemic contributed to an estimated 10-12 percent negative growth. The PA will face a demanding fiscal situation again this year with a projected USD 1.2 billion budget deficit, due to factors like additional expenses to vaccination, elections and restored payments of salaries to Gaza staff at their normal levels. The level of external budget support is projected to be as low as USD 300 million," she said.

"Structural constraints for a sustainable development of the Palestinian economy remain. Resolving the fiscal issues under discussion is vital to stabilize the PA’s economy. The dialogue between the parties should be resumed to substantially increase the revenues to the PA. The priority of the parties and the donors should be to promote measures to build trust, finalize infrastructure projects, to facilitate production and trade, as well as to stimulate private sector growth."