The World Bank's Board of Directors endorsed a new four-year assistance strategy for the Palestinian territories. The strategy will continue to support resilience of livelihoods and service delivery and will put greater emphasis on transformational investment for a well-connected Palestinian economy and long-term economic returns.

"Due to the persisting fragile context, exacerbated by the COVID-19 pandemic, resilience strengthening is needed immediately. The new World Bank strategy will act to protect lives and livelihoods and put the jobs agenda at the forefront of its strategy", said Kanthan Shankar, World Bank Country Director for West Bank and Gaza.

More than a year into the COVID-19 pandemic, the crisis is unprecedented in an already faltering economy with job and income losses. The GDP contraction of 11.5% in 2020 is one of the sharpest on record and the potential recovery will depend on a broad-based vaccination rollout.

Poverty has been in constant increase since 2016 and is now at around 30 percent with 1.4 million people living in poverty. The government's fiscal deficit is over US$1 billion after aid - the highest in years – and the declining government revenues depresses investment and squeeze out urgent spending. Service providers have struggled to deliver basic and essential services.

The World Bank Group said its new strategy is focused on the wellbeing of the Palestinian people, particularly the poor and vulnerable, women and youth. The program will continue to strengthen the Palestinian resilience in times of crisis and provide relief and recovery, including through the emergency social protection and cash-for-work programs.

The social response will aim to enhance workforce resilience and capability for better employment through improving quality of education and health. It will increase its support to SMEs and start-ups for job retention and business continuity.

"The Palestinian economy will not reach its full potential without a final status agreement. However, institution strengthening is essential to encourage private investment and promote longer-term growth. Transitioning to sustainable development is a smart investment. The strategy explores opportunities that would generate growth and jobs for the local economy and future generations", added Shankar.

"More than 36 percent of youth are unemployed in the Palestinian territories, particularly high in Gaza with 66 percent and as high as 91% for women. The new strategy sees the digital economy as a means of securing significant economic opportunities for young people and leading to a more engaged society", explained Shankar.