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West Bank and Gaza
>> Regional Overview >> West Bank and Gaza Overview ACTIVITY DATA SHEET
PROGRAM: West Bank and Gaza
TITLE AND NUMBER: Expanded Economic Opportunities, 294-001
STATUS: Continuing
PLANNED FY 2001 OBLIGATION AND FUNDING SOURCE: $ 3,650,000 ESF; $9,055,788 Wye*
PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: $10,871,567 ESF
INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2004Summary: The Palestinian economy is characterized by high and fluctuating levels of unemployment and under-employment; limited access to labor markets in Israel; unreliable passage for manufactured inputs and final products, especially in times of border closures; limited regional trade; low productivity; constraints to credit, particularly for microenterprises; and an undefined legal and regulatory framework that undermines investor confidence.
As a result of stronger economic ties with Israel, improvements in the competitiveness of Palestinian exports, and greater commercial transparency, the Palestinian economy expanded by an impressive 7% in the first nine months of 2000. Increased foreign direct investment, decreased unemployment, and high trade levels were evident throughout that period. However, the recent unrest-resulting in decreased movement of Palestinian goods and labor-has raised unemployment to more than 40%, greatly decreased Palestinian exports, and reminded foreign investors of the volatile nature of this region.
The goal of USAID's program is to increase the availability of capital to Palestinian businesses and increase the efficiency, profitability and transparency of the Palestinian commercial sector. In response to the recent economic deterioration, USAID's economic growth program has increased support for small and microcredit programs and refocused existing activities to mitigate the losses associated with prolonged closure. By addressing these issues, USAID continues to promote the private sector as the key to long-term stability and growth in the West Bank and Gaza.
Key Results: USAID's private-sector program aims to achieve the following results: (1) increased small and micro-enterprise access to financial services; (2) increased access to markets by the industrial and service sectors; and (3) effective operation of selected economic regulatory institutions.
Performance and Prospects:
Micro-Finance: In FY 2000, USAID awarded a three-year, $5.5 million contract to a U.S. firm to support development of a sustainable micro-finance industry in the West Bank and Gaza. This assistance will train micro-credit workers to broaden the mix and reach of current micro-lending programs; establish a privately owned credit bureau; raise public awareness of micro-credit products; and assist existing/potential practitioners to identify and deliver new financial services to the poor, with an emphasis on women. In FY 2001, USAID will provide $1 million in FY 2000 carryover funds to support this activity. In FY 2002, USAID will provide $2 million in New Obligation Authority (NOA) to support this activity.
Small Grants Micro-Finance: In FY 2001, USAID will award a series of grants to support the work of U.S. and Palestinian non-governmental organizations (NGOs) to increase small business lending. Assistance will increase the availability of working capital loans, promote loans for new businesses, and make available funds to improve housing. In FY 2001, USAID will provide $1.8 million in FY 2000 carryover funds and $3 million in FY 2001 NOA to support this activity. In FY 2002, USAID will provide $2 million to support this activity.
Market Access Program: Since 1994, USAID has helped Palestinian firms by improving marketing practices, management and productivity. In FYs 2000-2002, USAID is implementing a business services strengthening program, increasing Palestinian participation in key trade fairs, developing and achieving wide-spread approval for a private sector policy agenda, and providing additional support to Paltrade, a Palestinian NGO, to strengthen private-sector advocacy efforts. In FY 2001, USAID will provide $3.5 million in FY 2000 carryover funds and $650,000 in FY 2001 NOA to support these activities. In FY 2002, USAID will provide $4.1 million in NOA to support this activity.
Industrial Zone Development: USAID technical assistance and infrastructure financing made it possible to establish a border industrial estate in Gaza. In FY 2001, USAID will help identify up to five local industrial estates, and support the refurbishment, modernization, or, if necessary, expansion of two or more estates. USAID will also support capacity-building activities for the Palestinian Industrial and Free Zone Authority (the body responsible for promoting, maintaining, and regulating industrial estates) and the Palestinian Investment and Promotion Agency (the organization responsible for increasing foreign direct investment and expanding exports). In FY 2001, USAID will provide $6,402 in FY 2000 carryover funds and $9 million in FY 2001 AND FY 2002 Wye funds to support these activities. No FY 2001 or FY 2002 NOA funds are planned for these activities.
Commercial Transparency/Improved Accounting and Auditing Practices: Beginning in 1996, USAID provided assistance to develop the commercial legal and regulatory framework in the West Bank and Gaza. In FY 2001 and FY 2002, USAID will continue to support the adoption of internationally accepted accounting and auditing standards by assisting in their development, promulgation, and integration into daily business practices through greater emphasis on continuing education and refining the university accounting and auditing curriculum. Assistance in FY 2001 and FY 2002 will strengthen the capacity of private accounting and auditing organizations, help define the requirements for professional licensing, and establish a process for peer review. In FY 2001, USAID will provide $768,000 in FY 2000 carryover funds to support these activities. In FY 2002, USAID will provide $1.32 million to support this activity.
Program Development and Support: In FY 2001, USAID will obligate $870,547 in no-year funds (deobligation/reobligation) and $234,921 in FY 2000 carryover funds to design new activities and support miscellaneous program expenses. In FY 2002, USAID will provide $1.45 million in NOA funds for these activities.
Possible Adjustments to Plans/Wye Funding: Because of the breakdown in relations between the Palestinians and Israelis, USAID intends to make several program changes related to Wye supplemental funds. In FY 2001 and FY 2002, up to $9 million in Wye supplemental funds will be used to design local industrial parks in the West Bank and Gaza and to strengthen the institutional capacity of the Palestinian Industrial and Free Zones Authority-the body responsible for managing, promoting, and regulating industrial zones.
The construction of the Jenin-Nablus Road will not take place in FY 2001. Furthermore, USAID will not support border industrial estates as notified in USAID's FY 2001 Budget Justification. As a result, $10 million will be reallocated from this sector to the health sector, and $1 million will be reallocated to expand the water resource program.
Other Donor Programs: Between 1994 and 2000, USAID provided a total of approximately $1 million to promote increased economic growth in the West Bank and Gaza. The European Union (EU) and the United Kingdom have funded programs providing loans to small businesses, excluding microenterprises. The World Bank has continued to support improvements in the Palestinian private-sector legal framework. Nonetheless, as a result of the economic deterioration stemming from the border closure, most new donor programs-including activities supported by the EU, Japan, and Arab states-focus on employment generation, support for those living under the poverty line, and economic revitalization. USAID continues to be a key donor in this sector.
Principal Contractors, Grantees, or Agencies: USAID is implementing these activities through U.S. firms (Development Alternatives, Inc.; The Services Group; The Barents Group; Deloitte Touche Tomatsu; Financial Markets International; and Chemonics), U.S. NGOs (Save the Children Federation), a Palestinian NGO (Paltrade), and the Palestinian private sector (local banks).
* Of the $17,200,000 FY 2000 ESF Wye Supplemental carryover, $9,055,788 is being notified for this activity. The remaining $8,144,212 was previously notified.
FY 2002 Performance Table
West Bank and Gaza: 294-001
Performance Measures:
Indicator FY97
(Actual)FY98
(Actual)FY99
(Actual)FY00
(Actual)FY00
(Plan)FY01
(Plan)FY02
(Plan)Indicator 1: Cumulative value of loans disbursed under micro enterprise finance programs operated by NGOs 3,061* 5,678* 8,990 8500 8,000 13,000 21,000 Indicator 2: Value of total sales in assisted firms 71.7 80 101 NA NA NA NA Indicator 3: Exports directly attributable to USAID interventions NA 0 8.6 NA 12.0 15.5 19.5 Indicator 4: Cumulative value of loans disbursed under microenterprise finance programs operated by commercial banks NA 1,585* 8,222 15,000 25,000 17,000 19,000 Indicator Information:
Indicator Level (S) or (IR) Unit of Measure Source Indicator Description Indicator 1: IR U.S. Dollar value (in thousands) USAID activity data information systems The value of all loans disbursed Indicator 2: IR U.S. Dollar value (in millions) USAID activity data information systems The collected value of new contracts executed by firms assisted by USAID activites in the specified year. It includes only those new contracts that can reasonably be attributed to USAID sponsored assistance and is cumulative, year to year. This activity ended in FY 2000. As a result, this indicator will not appear in the FY 2003 or any future R4 documents. Indicator 3: IR US dollars (millions)--annual Industrial Estates data bases, industry association data bases, and MAP contractor reports. Value of new exports, including shipments to Israel, of firms operating in the industrial estates, and firms that are USAID-supported private sector industry associations, or that receive assistance directly from MAP contractor. Indicator 4: IR U.S. Dollar value (in thousands) USAID activity data information systems The value of all loans disbursed. The targets for out years have been decreased. U.S. Financing
(In thousands of dollars)
Obligations Expenditures Unliquidated Through September 30, 1999 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 36,721 ESF 25,205 ESF 11,516 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA 0 CSD 0 CSD 17,148 ESF 6,915 ESF 0 SEED 0 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 53,869 ESF 32,120 ESF 21,749 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds* 0 DA 0 CSD 17,200 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD 3,650 ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 20,850 ESF 0 SEED 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 10,872 ESF 40,000 ESF 125,591 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA * Of the $17.2 million FY 2000 ESF Wye Supplemental carryover, $9,055,788 is being notified for this activity. The remaining $8,144,212 was previously notified.
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Last Updated on: May 29, 2002 |
