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World Bank Casts Doubt on Palestinian State

Report claims Palestinian economy incapable of supporting a state

Adam Chandler
July 25, 2012

For years, the issue of the viability of a Palestinian state has been the hobby-horse of countless pundits and activists. Citing concerns of land, security, natural resources as well as the issues of Israeli settlements and the unrealistic demands for a Palestinian right of return, doubts have continued to surface about whether Palestine would even be possible to create, if political conditions allowed.

Making matters worse for that cause is the political fracture that has made Gaza into an entity run by Hamas and the West Bank into an entity run by the Fatah-dominated Palestinian Authority. The two break up and say they’ll get back together, but they also continue to jockey for status as the sole voice of Palestinian determination, making wary an Israeli leadership with whom Palestinian leaders must deal.

Today, the World Bank dealt the Palestinians another blow in a report that casts doubt about the Palestinian economy, despite its recent growth.

Donor countries have propped the Palestinian economy by giving billions of dollars. In a report issued Wednesday, the World Bank says the aid has led to 7.7 percent gross domestic product growth between 2007 and 2011, but only in government services, real estate and other non-tradable sectors.

In contrast, it said manufacturing and agriculture have dropped significantly.

The study’s author John Nasir, while explaining that strides have been made to build toward statehood, “the economy is currently not strong enough to support such a state.”

Added to the laundry list of existent challenges though, what do a few billion dollars really matter?

Adam Chandler was previously a staff writer at Tablet. His work has appeared in the New York Times, the Wall Street Journal, the Atlantic, Slate, Esquire, New York, and elsewhere. He tweets @allmychandler.