WPCQ 2 ZBn Xx  @;X@Bibliogrphy6Bibliography=(ig&j *ȯnhg&E Doc Init&6Initialize Document Styleg&j *ȯnhg&E    I. 1. A. a.(1)(a) i) a)DocumentҲa1DocumentE+ȯnDocument Style 8g=(ig&j !*F *  ׃  2qea2DocumentE+ȯnDocument Style 8g=(ig&j !**    a3DocumentE+ȯnDocument Style 8g=(ig&j !*0     a4DocumentE+ȯnDocument Style 8g=(ig&j !*   . a5DocumentE+ȯnDocument Style 8g=(ig&j !*  2Ke p p ca6DocumentE+ȯnDocument Style 8g=(ig&j !*  a7DocumentE+ȯnDocument Style 8g=(ig&j !* ` ` ` a8DocumentE+ȯnDocument Style 8g=(ig&j !* ` ` ` Tech Init"6Initialize Technical Style&j "*ȯnhg&E  1 .1 .1 .1 .1 .1 .1 .1 Technical2 } -^ a1Technical+ȯnTechnical Document Style8g=(ig&j #* 4!     a2Technical+ȯnTechnical Document Style8g=(ig&j #* *    a3Technical+ȯnTechnical Document Style8g=(ig&j #*'   a4Technical+ȯnTechnical Document Style8g=(ig&j #*&   28 $  .  a5Technical+ȯnTechnical Document Style8g=(ig&j #*&   . a6Technical+ȯnTechnical Document Style8g=(ig&j #*&!"  . a7Technical+ȯnTechnical Document Style8g=(ig&j #*&#$  . a8Technical+ȯnTechnical Document Style8g=(ig&j #*&%&  . 24j epssPleading&$6Header for numbered pleading paper*ȯnhg&E'(   ,#x  @;X@# X  y*dddyy*dddy HH1 HH2 HH3 HH4 HH5 HH6 HH7 HH8 HH9 H10 H11 H12 H13 H14 H15 H16 H17 H18 H19 H20 H21 H22 H23 H24 H25 H26 H27 H28   ӼHeading 2(6Underlined Heading Flush Left(*ȯnhg&E)* Heading 1)6Centered Heading(ig&j )*ȯnhg&E+,* Ã  Bullet List6Indented Bullet Listig&j **ȯnhg&E-.` ` ` 2Ea1Right Par+ȯnRight-Aligned Paragraph Numbersig&j 2*8/0@   a2Right Par+ȯnRight-Aligned Paragraph Numbersig&j 2*A12@` `  ` ` ` a3Right Par+ȯnRight-Aligned Paragraph Numbersig&j 2*J34` ` @  ` `  a4Right Par+ȯnRight-Aligned Paragraph Numbersig&j 2*S56` `  @  2~=a5Right Par+ȯnRight-Aligned Paragraph Numbersig&j 2*\78` `  @hh# hhh a6Right Par+ȯnRight-Aligned Paragraph Numbersig&j 2*e9:` `  hh#@( hh# a7Right Par+ȯnRight-Aligned Paragraph Numbersig&j 2*n;<` `  hh#(@- ( a8Right Par+ȯnRight-Aligned Paragraph Numbersig&j 2*w=>` `  hh#(-@pp2 -ppp 2 0Ыx  @;X@<  9`("Courier 10cpiXx  @;X@<  9`("Courier 10cpiXixP7P,xA`&Univers (Scalable)2GO#|x#ixP7P# T"WEST BANK AND GAZA FY 1997 Economic Support Funds:p(#C$75,000,000 ă Introduction In September 1993, the Palestinian Liberation Organization (PLO) and the Government of Israel signed the "Declaration of Principles on Interim SelfGoverning Arrangements" (DOP), which envisioned an initial transfer of authority over the Gaza Strip and Jericho to Palestinians, to be followed by the transfer of authority over the remainder of the West Bank. In keeping with the DOP, the Palestinian Authority (PA) was established in May 1994, assuming selfgoverning responsibilities in Gaza and Jericho. Following the signing of the Interim Agreement in September 1995, Palestinian selfrule was extended to six major population centers on the West Bank, with a phasedin extension of authority planned for other areas. Elections were held in January 1996 to select a Legislative Council and a Head of the Executive Authority, and final settlement negotiations between the Palestinians and Israelis are scheduled under the DOP to begin in May 1996. The PalestinianIsraeli accords are central to the overall Middle East Peace Process, for which the United States has been the primary mediator. The Development Challenge The population in West Bank and Gaza is estimated to be 2.4 million, with 900,000 in Gaza and 1.5 million in the West Bank. Population density in some areas of Gaza reaches more than 3,000 inhabitants per square mile, with approximately 33% of the families in Gaza living below the poverty line ($470 per year). In the West Bank and Gaza, population growth rates are estimated at around 4%, formal unemployment is at least 25% (with the actual level sensitive to Israeli border closures), and per capita gross domestic product is about $1,500 ($1,800 in the West Bank and $1,100 in Gaza). The economy of the West Bank and Gaza Strip is characterized by: (1) heavy dependence on Israel for both trade and jobs (from 19901992, 87% of commodity imports and 83% of exports); (2) a limited agricultural and manufacturing base; (3) reliance on remittances from workers abroad; (4) constraints caused by regulatory, institutional, political and security features; (5) substandard public services and infrastructure; and (6) declining availability of water and land resources. While activities financed under the U.S. Government pledge for support to the peace process were only initiated within the last 18 months, tangible benefits have already been achieved. Budgetary support through the multidonor World Bank "Holst" Fund, with USAID providing nearly $40 million, helped finance salaries for 29,000 public sector employees (mostly teachers and health care workers) to facilitate the transition to autonomous Palestinian provision of governmental services in the West Bank and Gaza. Based largely on the Palestinian Authority's having exceeded its targets for tax collections and greater than expected transfers of taxes and fees from Israel, USAID budgetary support is expected to be phased out in FY 1996. Social and economic problems remain particularly acute in Gaza, and USAID's rapid reprogramming of funds in FY 1995 helped create shortterm jobs and improve infrastructure to support the peace process. Specific accomplishments expected to be achieved through FY 1996 include: approximately 2,500 personyears of temporary employment created; 700 home improvement loans made; 600 permanent jobs created as a result of 200 loans to small businesses; 192 Al Karama Towers housing units completed and occupied; the water system in Rafah upgraded; and flooding in Gaza City significantly reduced. USAID also expanded activities in the West Bank in response to the Interim Agreement: water systems upgrades were completed in Nablus and Ramallah, construction is underway to improve the access of 60,000 75,000 residents of villages and small municipalities to safe water, and a multidonor effort to overhaul the water system for the 120,000 residents of Hebron has been initiated. Finally, in January 1996, the Palestinian people elected their first democratically chosen, selfgoverning authority. USAIDfinanced interventions in voter education and election administration and observation were instrumental in the success of the electoral process. The USAID program described below is positioned to play an important role in supporting Palestinians at this historic juncture in their development. Other Donors In recognition of the serious problems faced by the new Palestinian Authority and the historic opportunity presented by the peace process, donors pledged $2.4 billion in assistance to Palestinians at the October 1993 Conference to Support the Middle East Peace Process. As part of this pledge, the U.S. Government committed to provide $500 million over a 5year period. Of this total, USAID will administer $375 million; the remainder will be provided through the Overseas Private Investment Corporation (OPIC). FY 1997 Program Immediately following the signing of the DOP, USAID support focused on the startup of Palestinian Authority operations, highpriority infrastructure, employment generation, and economic reactivation. Beginning in FY 1996, resources have been concentrated in fewer strategic areas. As such, USAID will assist Palestinians to realize tangible benefits of the peace process by promoting greater access to limited water resources, expanding income opportunities, and improving key democratic processes and practices. In exceptional cases where immediate political and developmental needs justify activities outside this framework, USAID may finance shortterm, relatively lowcost infrastructure interventions not related to water resources. In developing this strategy, USAID has balanced the need to ensure the shortterm, tangible impact of U.S. Government assistance to Palestinians with the longerterm developmental needs in the West Bank and Gaza. The USAID program, as part of an overall country team approach, addresses crucial U.S. national interests in the Middle East by promoting marketoriented economic development and the emergence of democratic institutions. These efforts will help lay the groundwork for longterm economic stability, a sine qua non for the viability of the new Palestinian entity and its peaceful relations with Israel and its neighbors. Agency Goal: Protecting the Environment Water allocation and use are issues that remain critical to determining the quality of life of all Palestinians. Economically and developmentally sound practices with respect to water are essential to sustainable growth. Only 35% of the land in the Gaza Strip and 52% in the West Bank is suitable for cultivation, mineral resources are negligible, and the lack of water is a limitation for both agricultural and industrial development. As a result of USAID activities, water systems and related neighborhood infrastructure have been upgraded. The Interim Agreement recognizes that Palestinians require an additional water allocation of between 70 80 million cubic meters per year, and the U.S. Government has played an active role as a member of the Trilateral Committee (with the Israelis and Palestinians) in dealing with the political and technical issues related to water. FY 1997 funding will address these obstacles to development through the following: *Strategic Objective 1:Improved Access to Extremely Limited Water Resources  Agency Goal: Encouraging Broadbased Economic Growth Between 1967 and 1978, the economy in the West Bank and Gaza achieved relatively high growth rates (8%10% annually). However, in recent years, employment opportunities in Israel and transfers from abroad have dropped considerably, Israel's security concerns have led to periodic border closings and thereby reduced commercial activity, the transition to democracy is taking place within the context of complex formulas for the transfer of authority from Israel, and basic issues affecting the economy have been deferred to the final status talks between the Palestinian Authority and the Government of Israel. Currently, insufficient access to credit, limited markets, low productivity and a deteriorated infrastructure restrict the potential for economic growth in the West Bank and Gaza. Planned activities will assist in improving the access of small and microenterprises to financial products and services, developing markets for Palestinian goods and services, and enhancing the productivity of Palestinian enterprises. Future activities will focus on the following: *Strategic Objective 2:Expanded Income Opportunities ` `  *Special Objective:Selected ShortTerm Infrastructure Development Needs Addressed   Agency Goal: Building Democracy In January 1996, Palestinians elected an Executive Authority Head and 88 members of a selfgoverning Council (with both legislative and executive powers). Municipal elections are scheduled for later in 1996. These elections, per se, can be considered an accomplishment of the peace process as supported by the USAID program. USAID financed the formation of a coalition of more than 40 local groups that organized a domestic elections monitoring team; the   training of 15,000 Palestinians on the election process and rights and responsibilities in a democracy, with a special focus on women, rural, youth and former political prisoner groups; the costs of international observers for the Executive Authority and Council elections; and technical assistance to the Elections Commission. At this point, Palestinians must focus on further transition towards selfrule, including the establishment of democratic checks and balances, and the development of accountable and transparent governance. USAID assistance provided in FY 1997 will finance efforts that will focus on the following: *Strategic Objective No. 3:hhhImproved Key Democratic Processes and Practices !$ Activity Data Sheet ă PROGRAM: WEST BANK AND GAZA TITLE AND NUMBER: Improved Access to Water Resources, 294SO01 STATUS: Continuing PROPOSED OBLIGATION/FUNDING SOURCE: FY 1997 $58,600,000 ESF INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001 Purpose: To provide Palestinians with greater access to, and facilitate more effective use of, extremely limited water resources. Background: Water supply is a major constraint to sustainable economic growth and a highly political issue within the peace process, with current allocations to Palestinians in the West Bank and Gaza 7080 million cubic meters per year less than the demand. This situation represents a critical constraint to economic growth as it relates to household, industrial and agriculture uses of water. It also has significant, although less immediate, impacts on environmental conditions and health indicators. USAID Role and Achievements to Date: USAID activities, initiated in FY 1995 through the Gaza Wastewater and the Municipal Services projects, support this objective. They include rehabilitation of the storm water and sewage collection systems in Gaza and the upgrading of water networks in 21 villages in the West Bank. Already, water systems upgrading and construction have been completed in Rafah, Nablus and Ramallah, and flooding has been significantly reduced in Gaza City. Description: Activities under this objective will assist in: (1) increasing the quantity and quality of water at the village and municipal levels by developing new sources, upgrading and extending water systems, and monitoring water quality; (2) promoting more effective use of available water by reclaiming wastewater and stormwater, and instituting conservation measures and loss prevention programs; and (3) enacting policies for more equitable allocation of water resources at a regional level by establishing water data banks and adopting water resources master plans (to include regional conservation, loss prevention, and reuse measures, and the identification of new sources). Host Country and Other Donors: USAID is emerging as a lead donor in this area, but significant resources have been committed by the United Nations Development Program, Germans and Italians. The Government of Israel also is committed by the Interim Agreement to provide support in this area. USAID assistance will focus on developing new sources of supply and policy formulation related to water resources management, while other donors will construct distribution networks and support institutional development at local levels. The World Bank is expected to take the lead in supporting the privatization of water facilities. Beneficiaries: USAID will work directly with the Palestinian Water Authority, the Municipality of Gaza and the West Bank Water Department to respond to the demands of the Interim Accord. The bulk of the population of the West Bank and Gaza will benefit from increased water supplies, with the exact numbers and locations to be determined as part of negotiations between the Israelis and Palestinians and development of engineering plans. Principal Contractors, Grantees, or Agencies: USAID expects to implement activities primarily through U.S. firms, with the United Nations Relief and Works Agency (UNRWA), the United Nations Development Programs (UNDP), and U.S. nongovernmental organizations also playing significant roles. Major Results Indicators: As a new strategic objective, indicators have not been fully developed. They may include: access of population to potable water, domestic consumption rates, overall volume of water supply, volume of reclaimed waste and storm water, and volume of water loss prevented. !$ Activity Data Sheet ă PROGRAM: WEST BANK AND GAZA TITLE AND NUMBER: Expanded Income Opportunities, 294SO02 STATUS: Continuing PROPOSED OBLIGATION/FUNDING SOURCE: FY 1997 $7,800,000 ESF INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001 Purpose: To expand income opportunities for Palestinians in the West Bank and Gaza Strip. Background: High unemployment and underemployment and declining incomes are among the most difficult obstacles to economic growth, and indeed stability, in the West Bank and Gaza. Increasing income opportunities will provide perhaps the most tangible evidence that the peace process is leading to improvements in the daily lives of Palestinians. USAID Role and Achievements to Date: USAID activities, initiated in FY 1994 and FY 1995 through the Small Business Support, Jobs Training and Promotion and the Small Business Loan projects support this objective. They include technical support to small businesses and the Federation of Palestinian Chambers of Commerce, vocational training, and small business lending. It is anticipated that assistance for industrial zones and microenterprises will be initiated in FY 1996. To date, 91% of the 900 graduates of vocational training found employment, and 35 of 43 workshops that began operating with USAID financing to rent machinery were still operating after one year. Through 1996, 200 loans will have been provided to small businesses in Gaza resulting in the creation of 600 permanent jobs. Description: Activities will assist in: (1) improving the access of small and microenterprises to financial products and services by expanding technical assistance mechanisms and credit; (2) developing new and expanded markets for Palestinian goods and services through market information, construction of municipal facilities and technical assistance for industrial zone development; and (3) enhancing the productivity of Palestinian enterprises through training in entrepreneurial skills and appropriate technologies.  Host Country and Other Donors: The European Union and United Kingdom have funded programs providing loans to small businesses, but not microenterprises, since 1983. The World Bank is playing a lead role in coordinating donor assistance for industrial zone development. Beneficiaries: Primary beneficiaries of the activities will be the majority of Palestinians working in micro, small and mediumsized firms. The exact number and scope of beneficiaries will be defined as USAID's FY 1996 interventions in microcredit and industrial zones are designed. Principal Contractors, Grantees, or Agencies: USAID will implement activities through U.S. firms, the United Nations Relief and Works Agency, U.S. nongovernmental organization, and the Palestinian private sector. Major Results Indicators: As a new strategic objective, indicators have not been fully developed. They may include: income generated and permanent employment created. !$ Activity Data Sheet ă PROGRAM: WEST BANK AND GAZA TITLE AND NUMBER: Improved Democratic Processes and Practices, 294SO03 STATUS: Continuing PROPOSED OBLIGATION/FUNDING SOURCE: FY 1997 $8,600,000 ESF INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001 Purpose: To improve key democratic processes and practices in the West Bank and Gaza Strip. Background: In keeping with the various accords signed by the Israelis and Palestinians, elections were held in January 1996 for a Legislative Council and Head of the Executive Authority for the West Bank and Gaza Strip. Municipal elections are scheduled for later in 1996. These elections are only a preliminary step in the establishment of open, transparent and effective governance in Palestinian selfrule areas. USAID Role and Achievements to Date: USAID activities to date, through the Democratic Understanding and Development project, have supported the electoral process through voter training, civic fora, election observation, and technical assistance to the Elections Commission. Multidonor assistance to the Holst Fund, including nearly $40 million from USAID, has been critical in financing government services in the West Bank and Gaza. Description: Given the immediacy of the Palestinian elections and needs of the new Palestinian Authority, USAID has developed a strategy that supports shortterm interventions through the municipal elections in the summer of 1996 and mediumterm democratic development beginning in midFY 1996. The shortterm interventions were included in a special objective designed to promote an effective transition to selfrule; the special objective is scheduled to terminate in FY 1996 with the last transfer of USAID resources to the Holst Fund and completion of the municipal elections. Activities under this strategic objective will assist in: (1) increasing the participation of civil society in the public decisionmaking process by supporting advocacy groups and a conducive policy framework; and (2) strengthening the legislative process by improving analytical and managerial abilities of the legislature and executive branch to draft, review and approve quality legislation.  Host Country and Other Donors: The World Bank, the United Kingdom and Australian are supporting initiatives related to legal reform and the justice sector, which will be complemented by USAID's support in the areas cited above. The United Nations Development Program and the United Kingdom have financed public administration training for the Palestinian Authority, and many donors have provided resources to the Holst Fund. It is expected that Australia and the European Union will provide some financing for startup activities and operating costs of the new Council, which will help lay the groundwork for and complement USAID interventions related to the legislative process. Beneficiaries: All Palestinians will benefit from the emergence of open, transparent and effective selfrule mechanisms. Principal Contractors, Grantees, or Agencies: USAID will implement activities primarily through U.S. and Palestinian nongovernmental organization. Major Results Indicators: Since electionsrelated activities will not be part of the portfolio after FY 1996, new indicators will have to be developed around the emerging portfolio under this Strategic Objective. They may include: citizens' confidence in key institutions, quality and quantity of legislative proposals and actions, and the number of civic society interventions in policymaking processes.   X  WEST BANK AND GAZA FY 1997 PROGRAM SUMMARY | ddxSl\ ###### ddxSl\ ######| *@ @ *Encouraging Economic GrowthStabilizing Population GrowthProtecting the EnvironmentBuilding DemocracyProviding Humanitarian Assistance Total*  *USAID Strategic Objectives *  *1. Improved Access to Extremely Limited Water Resources ESF $58,600,000 $58,600,000*  *2. Expanded Income Opportunities ESF $7,800,000  $7,800,000*B B *3. Improved Key Democratic Practices and Processes ESF  $8,600,000 $8,600,000*            *TOTAL ESF" $7,800,000 $58,600,000 $8,600,000 $75,000,000 USAID Mission Director: Christopher D. Crowley