PNA Ministry of Planning Official Document - March 4, 2008 - Back to Resources Page

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The signing of the Interim-agreement (Oslo II-1995) and the establishment of the Palestinian Authority (PA) was the start for a Palestinian administration and development policy. Elections took place and created a basis for democratic development. A relatively strong civil society also bode well for the development of the region and democracy.

However, throughout the post-Oslo period the prevailing political and security instability has been deeply inimical to the evolution of well-functioning Palestinian democratic Institutions and the development of a robust economy. Years of dependency on the Israeli market, political instability, the continued growth of settlements, and the related tightening of movement and access restrictions have deterred productive investment and stunted the growth of Palestinian industrial and productive capacity. Since Israel's disengagement in 2005, Gaza has undergone a restrictive closure regime that has eventually lead to the collapse of its private sector. Following the Palestinian Legislative Council (PLC) elections in early 2006, donors found creative ways to inject aid to the Palestinian economy, mainly in the form of humanitarian and social assistance. whist this helped to prop up consumption and avoid a complete humanitarian catastrophe, it did not prevent human and capital flight, particularly from Gaza. Instability in the political environment has undermined the PA's capacity to develop and sustain effective PA institutions. The reform effort on which they had embarked in mid-2002 came to an abrupt halt after the 2006 election and fiscal crisis ensued. Indeed, reforms were reversed, particularly in the public finance sphere, and it became impossible to manage the public sector effectively.

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PNA Ministry of Planning Official Document - March 4, 2008 - Back to Resources Page