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The Palestinian Economic Initiative reveals many projects to stimulate local and foreign investment in Palestine that aim for Palestinian economic growth and job creation in the West Bank and Gaza Strip. The initiative - that is called for by the U.S. Secretary of State John Kerry and prepared by a team of international experts in collaboration with the Quartet Representative Office- includes many ideas, proposals and projects in eight key sectors; construction and housing (including financing of personal mortgages), agriculture, a comprehensive plan to attract tourism, telecommunications and IT, power, water, and light manufacturing.
The ultimate goal for the Palestinian Economic Initiative is to stimulate the transformative and the accelerated change in the Palestinian economy. The initiative looks up for the rapid growth in the Palestinian economy, which covers the entire West Bank, including the area (c) and the Gaza Strip over a period of three years from 2014 to 2016. It also aims to achieve a significant reduction in the unemployment rate, a significant increase in the average Palestinian household income, a boom in each of domestic and foreign investment flows, and a significant reduction in dependence on direct aid to the Palestinian Authority"s budget. Among the initiative’s goals also is for a significant shift in the Palestinian economy towards development to be born in the medium term and to be led by the private sector, by focusing on the growth of core industries, assisted by a combination of enabling factors. Moreover, the initiative aims to transform the Palestinian economy towards development model led by the private sector and economic sustainability prior to the establishment of a Palestinian state at the end.
According to the Quartet Representative Tony Blair, the initiative aims to release the economic potential of the Palestinian private sector through a combination of investments from the private sector, and development assistance from donors, the necessary Israeli measures for the implementation, and expanding the capacity of the Palestinian Authority. It is expected for the donor aid to be used as leverage for greater investment from the private sector in the main Palestinian economic sectors, and will continue funding the Palestinian infrastructure in the water and energy sectors. Donor assistance can be provided in various forms including funding grants, soft loans, political risk insurance and bank guarantees.
Eight sectors were selected to be listed in the Palestinian Economic Initiative based on the tendencies of the private sector, the relative contribution to GDP and employment rates, and their ability to economic growth. Water and energy were combined in one sector, as well as for building materials and construction. Sectors’ current contributions refer to the relative importance of the construction and agriculture sectors, and it is expected for these sectors to provide the best possibility to create growth and jobs in the medium term. Other sectors, such as tourism, currently contribute less to the overall economic activity and employment, but it has a huge potential for growth especially under conditions where there is greater peace and stability in the region.