Development Under Adversity: The Palestinian Economy in by Ishac Diwan, Radwan A. Shaban

By Ishac Diwan, Radwan A. Shaban

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GDP has risen 42 percent since 1990, at an annual average of 6 percent. 3 percent in these two years, respectively. A wave of immigrants, increasing the population by about 12 percent, has contributed to this growth. Also, the prospects for a political settlement of the Arab-Israeli conflict contributed to a rise in investment. The Israeli economy has reaped substantial economic benefits from the peace process. It has experienced improved trade relations with countries that were boycotting Israel in the past, improved creditworthiness that lowers the international cost of borrowing, and a substantial inflow of private capital.

Despite early high expectations for improvement, the fraction of people reporting their economic situation to have worsened since the Declaration of Principles ranged between 35 and 52 percent in the West Bank and between 48 and 57 percent in the Gaza Strip. In comparison with the West Bank, the Gaza Strip has higher portions of people whose economic situation has either improved or worsened. In repeated public opinion polls, unemployment and job availability were recorded as the most critical concern among a host of socio-economic and cultural factors, such as violence, repression, moral decay, and religious abandonment.

Referred to as the Paris Protocol (or Economic Protocol), it codified the economic relations between the PA and Israel during the interim period in the fields of monetary, fiscal, and trade relations. Under the agreement's terms, the Palestinian Monetary Authority (PMA) was mandated to oversee the local banking system and manage official foreign currency reserves. 1 Peace Process Agreements Date Signed Title Key Provisions and Target Dates October 1991 MadridPeace Conference * Inaugurated two separate yet parallel tracks of negotiations (bilateral and multilateral) to achieve just, lasting and comprehensivepeace settlement, based on UN Security Council Resolutions 242 and 338 * Tenrounds of negotiations follow from 1991-93 September 13, 1993 Declarationof Principles on Interim Self-Government Arrangements (Declarationof Principles, Oslo Agrement, DOP) * Set out overall framework for interim period and Palestinian self-government in WBGS * Mutual recognition of the PLO and Israel * Pledge to begin permanent status negotiations * Hold Palestinian elections by June 1994 .

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