State of Palestine Summary-English Translatio… · State of Palestine ... developed a gender integration plan at ministries, ... developed the terms of reference of the Road Master

State of Palestine

Second Annual NDP Monitoring Report

2012

Ministry of Planning and Administrative Development

Monitoring and Evaluation Directorate

Table of Contents 1. Executive Summary ......................................................................................................................... 1

1.1. Introduction .............................................................................................................................. 1

1.2. Summary of Main Achievements Made by Line Ministries and Government Bodies ... 2

1.3. National Indicators: NDP Implementation Impact on the Palestinian Society .............. 7

2. Macroeconomic Indicators of the Palestinian Economy in 2012 ........................................... 10

3. Challenges to NDP Implementation .......................................................................................... 16

3.1. Challenges ................................................................................................................................ 16

3.2. Monitoring and Evaluation ................................................................................................... 17

4. Recommendations ......................................................................................................................... 18

1 1. Executive Summary

1. Executive Summary

1.1. Introduction

The National Development Plan (NDP) 2011-13 summarises the Palestinian government’s policy agenda, macroeconomic and fiscal framework, and monitoring and evaluation framework for 2011 to 2013. The NDP is the product of the second comprehensive tri-annual national planning process, following on from the Palestinian Reform and Development Plan (PRDP) 2008-10.

The process underlying the development of the NDP 2011-13 included more extensive consultation with a broader range of stakeholders, the 13th Government Programme entitled Ending the Occupation, Establishing the State, and preparation of 23 sector and cross-cutting strategies that fall within four major sectors: Governance, Social, Economy and Infrastructure.

Compared to previous national planning cycles, the NDP 2011-13 is distinctive of including a monitoring and evaluation framework, which ensures a monitored performance and implementation of the national policy agenda. It provides national indicators that show the impact of NDP implementation on the Palestinian society. Within this framework, macroeconomic indicators cast light on performance of the Palestinian economy. Measurement indicators highlight the progress of national sectors in all four major sectors. Performance indicators are linked to specific and measurable targets, which are designed to monitor the progress made in the implementation of main interventions and projects run by line ministries and government bodies. These provide an early alert of main problems that impede achievement of set goals and devise potential solutions by compiling and submitting monitoring reports to relevant decision-makers. Each in the sphere of its jurisdiction, line ministries and government bodies have contributed to setting performance indicators and baseline data in collaboration with the Ministry of Planning and Administrative Development (MoPAD). They identified 2012 performance indicator-based targets in tandem with available financial resources.

To guide and allocate financial resources to main interventions across national sectors, the NDP 2011-13 includes a fiscal framework of development expenditures to ensure investment in vital interventions, which have not be implemented over the past years. Unimplemented interventions include construction of industrial parks of local government units (LGUs), provision of infrastructure networks for housing projects initiated in partnership with the private sector, etc.

This Annual NDP Monitoring Report has been compiled by collecting and analysing data from various sources and in coordination with relevant line ministries and government agencies. In addition to the monitoring and evaluation framework, the report assesses achievements made, challenges encountered by line ministries and government bodies in implementing major interventions, and recommendations tailored to improve performance


and implementation of interventions with a view to materialise desired goals. The report also provides a summary of development expenditures as shown in Table 1 below.

Table 1: The 2012 proposed development budget vs. financial commitment and actual spending in all four major sectors (US$ million)

Sector

NDP proposed budget (2012)

Financial commitment

Actual spending as per

ministry/govt. body data

(2012)

Actual spending as per Ministry

of Finance (MoF) Report

(2012)

Actual spending as per MoPAD

Aid Management & Coordination

Directorate (2012)

Social 243 No data 87.6 35.2 114.0Infrastructure 253.6 324.6 100.5 40.3 137.0Economy 130.9 230.7 9.0 4.2 23.0 Governance 206.9 334.2 89.0 107.0 40.0

“Actual spending as per ministry/govt. body data (2012)” shows the 2012 actual development expenditures disbursed by various line ministries and government agencies to implement NDP interventions within cross-cutting sectors in the four major sectors (Social, Infrastructure, Economy and Governance). “Actual spending as per MoF Report (2012)” represents the 2012 development expenditures (on a commitment basis) of development projects implemented by various line ministries and government actors. Finally, “Actual spending as per MoPAD Aid Management and Coordination Directorate (2012)” includes donor aid to the Palestinian National Authority (PNA), which was allocated to development projects across sectors.

1.2. Summary of Main Achievements Made by Line Ministries and Government Bodies

Through line ministries and government agencies, the Government marked many achievements.

In the social protection sector, major 2012 achievements included a finalised data update of 31,000 poor households. Financial assistance was delivered to 2,355 orphans. Counselling and psychological services were delivered to a total of 49 new women from across the West Bank governorates. In addition to inaugurating the Beit Al-Ajdad for the Elderly Care in Jericho, 358 persons with disabilities received vocational and professional training. Customs exemption was provided to 1,025 persons with disabilities and loans were granted to another 179 disabled persons to finance income generating enterprises. Several centres run by the Ministry of Social Affairs (MoSA) were renovated, including Dar Al Amal Institution For Rehabilitation and Protection, Girls’ Care Home, etc.


In the pre-school and general education sector, main achievements included enhancement of several regulations and instructions. More than 33,000 school teachers and principals were trained. Over 1,200 advisors attended a variety of training sessions. The content of 14 textbooks in human science curriculum were adjusted. Mathematics was adapted to the special needs of blind students in the 4-6 grades. In relation to school construction and maintenance, needs and specifications were listed and tenders invited accordingly. Spare part specifications and needs were also identified. Over 2,500 school libraries were either inaugurated or developed. Additionally, the Ministry of Education (MoE) provided several schools with medical and healthcare supplies, including first aid kits, fire extinguishers, road safety packages, etc.

With respect to higher education, main achievements included certification services. However, not an accomplishment has been registered in relation to the NDP 2011-13 proposed interventions.

In the health sector, major achievements included reinvigoration and implementation of various healthcare protocols and guidance manuals. In addition to developing the Pharmacology Directorate, the Ministry of Health (MoH) organised many workshops and training courses on school health, reproductive health, proper nutrition, breastfeeding, vaccinations, chronic diseases, planning, and management. The MoH also built, restored and renovated several hospitals and clinics. Sensitisation campaigns were launched to raise public awareness on several public health issues, including HIV AIDS, diabetes, smoking, swine flu, accidents, reproductive health, and youth health. In 2012, the MoH constructed, furnished and inaugurated health directorates in Dura (South Hebron), Jericho and Jenin.

In the culture and heritage sector, 11 activities were implemented to support the cultural landscape in East Jerusalem. The Ministry of Culture (MoC) constructed nine cultural facilities and centres; furnished and reinvigorated three public libraries; supported production of music and short films; and implemented 110 school events. In this context, the Ministry sponsored literary forums and distributed MoC publications as well as literary, cultural and heritage books to school libraries. In addition to setting some public libraries, training courses on creative writing skills were delivered to the youth. Besides poetic, literary and heritage events, the MoC organised festivals that highlighted the Palestinian national identity and heritage protection. The National Register of Oral History was established by documenting and categorising collections in agriculture, fishing, and food. Nine cultural activities were implemented on the Heritage Commemoration Day. Besides eight heritage festivals, five exhibitions of traditional industries were organised. Either directly or through support of troupes and artists, the MoC participated in many Arab and international festivals. Most prominent throughout 2012 was organisation of the Eighth Palestine International Book Fair 2012, entitled Palestine the 194th State with Jerusalem as its Capital: By Reading We Rise. With participation of several local, Arab and international publishers, the book fair hosted a number of Arab literary figures, poets and intellectuals.


In relation to the empowerment of women, the Ministry of Women’s Affairs (MoWA) developed a gender integration plan at ministries, conducted a gender-based audit at the Ministry of Local Government, and reviewed the Civil Defence Strategic Plan from a gender perspective. The Ministry also adopted the Regulation of the National Committee on Gender-sensitive Budgets and concluded an agreement with the Al Quds Open University to enhance gender-oriented education. In addition to building a relevant database, the MoWA published reports on the Israeli violations of Palestinian women’s rights.

In the energy sector, the Government approved the National Strategy of Renewable Energy in Palestine and the Palestinian National Energy Efficiency Action Plan (NEEAP). The Palestinian Energy Authority (PEA) finalised installation of the first solar power station, rehabilitated 90% of the Gaza Electricity Generation Plant, rehabilitated and expanded a portion of electricity distribution grids across the West Bank, and signed an agreement on installation of transformers in the West Bank. In addition, the PEA completed the transfer of responsibility for electricity distribution from LGUs to the North Electricity Distribution Company (NEDCO).

In relation to the environment and natural resources, the Palestinian Environment Quality Authority (PEQA) developed the final Draft Guidance Manual for Environmental Impact Assessment. In cooperation with the General Attorney Office, the PEQA deployed 31 Police officers with environmental inspection powers. The Council of Ministers approved the Medical Waste Management Regulation as well as the National Scheme for Protection of Natural Resources and Historical Sites and relevant regulations.

In respect of solid waste management, the Government finalised construction of a sanitary waste dump site (Al Maniya Dump), closed informal, unsanitary waste dumps in southern West Bank, and procured Euro 7.6 million worth solid waste management equipment and machinery across the West Bank governorates. In Hebron and Bethlehem, hazardous and medical waste processing has been introduced to 18 hospitals.

In the housing sector, the Ministry of Public Works and Housing (MoPWH) issued instructions on financial leasing and developed the Draft Law on the Housing Fund. In cooperation with the United Nations Human Settlements Programme (UN-Habitat), the Ministry developed a Draft Housing Features.

In the transportation sector, the Ministry of Transportation (MoT) rehabilitated and repaired roads in several governorates, developed the terms of reference of the Road Master Plan, and awarded the respective tender to a European company for implementaiton.

In relation to water and wastewater management, the Palestinian Water Authority (PWA) developed the final draft of the Water and Wastewater Management Strategic Plan, which covers the period towards 2032, and submitted it to the Council of Ministers for approval. In the context of the Legal Review Programme, the PWA compiled and presented to the


Council of Ministers a new Draft Water Law. In addition, water supply networks were rehabilitated, expanded and developed in several areas across the Palestinian territory.

Work is underway to construct wastewater treatment plants in western Nablus and northern Gaza.

In the ICT sector, the Ministry of Telecommunications and Information Technology (MoTIT) rehabilitated, furnished and adapted many post offices to meet public service delivery needs, introduced the hybrid mail service, and endorsed the Information Security Policy Document. Two e-government services have also been launched at the MoF and General Personnel Council (GPC).

With regards to industrial modernisation and business promotion, the Regulation on Trademark Fees and Regulation on the Examination and Analysis Precious Metals were published. In addition to completing the Decentralisation Project, the intellectual property and trade agency website was developed. A water cistern with a capacity of 500 cubic metres was constructed at the Jericho Agro-Industrial Park. An agreement was also signed to launch implementation of the temporary purification unit at the Bethlehem Multidisciplinary Industrial Park.

In foreign trade and investment, the Regulation on Chambers of Commerce was published. Cooperation agreements were concluded and Joint Business Councils were established with Jordan and Algeria. An economic cooperation agreement was also concluded with the Republic of Venezuela.

In relation to consumer protection, the Ministry of National Economy (MoNE) automated processes of the Consumer Protection Unit, rejuvenated the consumer protection webpage, and launched a campaign on combatting and boycotting settlement products.

In the labour sector, the Ministry of Labour (MoL) developed five Model Employment Offices in Hebron, Dura, Ar Ram, Jenin and Tulkarem. The Ministry also developed and launched the Labour Market Information System (LIMIS) and built a computerised Cooperative Society Management System.

In the agriculture and rural development sector, the Ministry of Agriculture (MoA) constructed and rehabilitated 21 kilometres of rural roads, reclaimed 2,684 dunums of arable land, and drilled and rehabilitated 236 wells for rainwater collection. The Ministry planted 80,465 fruit-bearing tree seedlings on reclaimed land, built 108,157 square metres of support walls, trimmed trees on 580 dunums of heritage forests, and constructed 3 kilometres of dual-purpose roads to forests and natural reserves. In its plant nurseries, the MoA produced 535,000 forest, pasture and ornamental tree seedlings. In addition, the MoA planted forest trees on 1,7000 dunums of government land, cultivated 500 dunum of pastureland, built and rehabilitated 581 wells for rainwater collection across the West Bank governorates, and constructed and rehabilitated 14 earth ponds in the Jordan Valley. The Ministry rehabilitated


33 kilometres of irrigation water pipelines in various governorates, constructed 10 cisterns, and installed needed transmission systems in Jenin, Tulkarem, Qalqiliya and Tubas. The MoA also constructed a wastewater treatment plant in Marj Na’ja in the Jordan Valley and installed seven climate monitoring stations.

In the tourism and antiquities sector, the Ministry of Tourism and Antiquities (MoTA) restored the Prophet John (Yahya) Shrine and rehabilitated a number of tourist sites, including Sabastiya, Birqin, Al Eizariya, At Tayba, and Hisham Palace in Jericho. Having been entered on the UNESCO List of World Heritage, the Ministry has launched a campaign to promote the city of Bethlehem as well as natural tourism, including the Battir Tourist Path – Environment Museum. New information centres were established in Ramallah and Jericho. A service centre was set up and the tourist path rehabilitated in Sabastiya. The MoTA also finalised development and refurbishment of the Samaritan Museum, Ramallah Museum, Tulkarem Museum, and Solomon’s Pools Museum.

In relation to justice and rule of law, the Ministry of Justice (MoJ) completed the Draft Law on Establishment of the Palestinian Chamber of Mediation and Arbitration. Accordingly, the Chamber was incorporated and chaired by the Minister of Justice. The MoJ finalised the Draft Law on Legal Aid, which takes account of vulnerable social groups, particularly women, persons with special needs and children. Major achievements of the High Judicial Council (HJC) included the launch of the second phase of the case management system (MEZAN II). After they are registered at the Public Prosecution, cases are now tracked from filing through disposition and execution of relevant court judgements. 98% of total cases filed to courts have been disposed. In relation to the Public Prosecution, all Prosecutor Offices have been connected to the Attorney General Office’s computer network.

In the security sector, crime rate (per 100,000 inhabitants) has declined to 670 compared to 678 in 2010. Response time of the Palestinian Civil Police also dropped from 9 to 7.2 minutes. The Military Procedure Litigation Manual was completed.

In the local government sector, the Ministry of Local Government (MoLG) completed the first phase of the Development of Villages and Neighbourhoods “Baladi” Programme, finalising a total of 124 projects that serve all social groups. The Ministry prepared land use maps across 11 governorates. Having been reviewed and audited in partnership with the MoPAD, these have been distributed to regional directorates and committees to be used as an operational terms of reference.

In relation to administrative development, the Code of Professional Conduct, which governs all civil servants, has been finalised and approved by the Council of Ministers. All amendments and justifications to the Law of Civil Service are now in place.


Major accomplishments in the public finance sector included a finalised integration of planning and budgeting exercises. All government programmes have been linked to medium-term government plans.

Regarding government statistics and research, the Palestinian Central Bureau of Statistics (PCBS) released 18 reports on the final results of the agricultural census. The PCBS also published final reports on the population and housing census in Gaza. Preliminary results of the census of establishments were also announced.

In respect of land management and administration, achievements included an increased land settlement and registration transactions. Compared to a projected number of 16,758 transactions in 2012, a total of 27,297 transactions were received and processed in the reported year. This is a result of sensitisation efforts implemented by the Palestinian Land Authority (PLA) to encourage citizens to complete land settlement and registration transactions with a view to safeguard property rights.

1.3. National Indicators: NDP Implementation Impact on the Palestinian Society

To gauge the NDP 2011-13 implementation impact on the Palestinian society, the monitoring and evaluation framework includes national indicators set in line with the 11 goals of the 13th Government Programme Ending the Occupation, Establishing the State. These indicators are tailored to assess national development and prosperity and compare Palestine’s performance to other countries based on relevant international standards. Table 2 below shows national indicators and achievement of the 2012 targets.


Table 2: National indicators

Indicator Baseline Base year

2012 target

Achieved value 2012

1. Basic education net enrolment rate Boys 95.2% 2010 97.73% 94.40% Basic education net enrolment rate Girls 91.6% 2010 96.53% 92.50%

2. Rate of students’ achievement in TIMMS (Average 500)

8th grade maths 367 2007

378 404 8th grade science 404 420 420

3. % of population who have completed higher education (higher than diploma) 14.9% 2010 17.4% 18%

4. % of citizens who are satisfied with curricula and teaching methods (government schools) 44.6%1 2008 55% Survey not

done 5. Average life expectancy at birth 72.2 2010 73.0 72.7 6. Maternal mortality rate as a result of pregnancy, birth

and puerperal complications (per 1000,000) 32.0 2010 25.0 28.8

7. Infant mortality rate (per 1,000 live births and under the age of 1) 20.6 2010 18.5 18.1

8. Child mortality rate (per 1,000 children under the age of 5) 25.1 2010 22.5 21.0

9. Children’s vaccination coverage rate + EPI 98.2% 2010 98.5% 97% 10. Percentage of underweight babies 88.6% 2010 92.5% 96.5% 11. Spread of Shortness 1.2% 2010 0.85% 1.5%

Spread of Emaciation 3.3% 2010 2.8% 0.7% 12. Economy growth rate 7% 2010 10% 5.9% 13. GDP (US$ million) 5,648.6 2010 8,862 6,797.3

14. GDP per capita (US$) 1,502 2010 2,067 1,679.3

15. Duration of unemployment rate 15.8 months 2009 10.6

months

16.

Unemployment Total % 23.7% 2010 12% 23.0%

Unemployment West Bank 17.2% 2010 12% 19.0% Unemployment Gaza 37.8% 2010 31.0% Unemployment Female 26.8% 2010 18% 32.9% Unemployment Male 23.1% 2010 17% 20.5%

17. Poverty gap ratio 6.4% 2010 3.5%

Data not released

18. Poverty rate as per monthly consumption patterns 25.7% 2010 -

19. Share of national consumption by the poorest 20% of the population 10.6% 2010 11.5%

20. Per capita water consumption (litres/day) 80 2007 80 82 21. Percentage of households connected to clean water

supply 88.4% 2010 92.0% 95.0% 22. Per capita electricity consumption (KWH/year) 950 2009 950 921 23. Percentage of households connected

to sewage network West Bank 31.0%

2010 NA2 31.0% Gaza 70.0% 70.0%

1 PCBS, Governance Survey of the Palestinian Territory, 2008. 2 This target was set on grounds of the PCBS 2010 baseline (40.1% in the West Bank and 81.9% in Gaza). The PWA reviewed 2010 PCBS data and concluded that these percentages were inaccurate. Accordingly, the 2012 target (50% in the West Bank and 88% in Gaza) was not in line with the correct baseline.


24. Percentage of households connected to the internet 29.1% 2010 42.0% 32.1%

25. Number of kilometres of surfaced roads (per 1,000 persons)3

Local 2.8 2009 2.8 2.6 Main 1 2009 1 0.94

26. Number of vehicles (vehicle per 1,000 inhabitants) 40 2009 44 54 27. Public recurrent expenditures as a percentage of GDP 52.1% 2009 38.1% 33% 28. % of development budget of the GDP 6.5% 2010 9.8% 2.4%

29. Deficit in the recurrent budget as a percentage of the GDP 26.0% 2009 12.7% 19.17%

30. Crime rate per 1,000 inhabitants 7.4 2009 7

Survey not done

31. % of citizens who report ‘feeling secure and safe’ 70%4 2008 75%

32.

% of citizens who are satisfied with effective functions of the judiciary - % of citizens who believe that5

Courts are independent 50.7%

2008

54%

Courts treat everyone equally before the law 45.8% 49% Cases are disposed timely 22.2% 28% Courts are fair (no favouritism , bribery, nepotism or biased treatment)

32.9% 39%

33. Palestine’s ranking on the UNDP Human Development Index (Rank 1-177) 110 2009 - 114

34. Palestine’s ranking on the Starting a Business Indicator (World Bank, Rank 1-181) 139 2009 - 135

35. Palestine’s ranking on the Press Freedom Index (Reporters without Borders, Rank 1-175) 161 2009 - 146

36. Palestine’s ranking on the Government Effectiveness Index (World Bank, Rank 0-100)

25.8 2009 - 30.3

37. Palestine’s ranking on the Anticorruption Index (World Bank, Rank 0-100) 45.5 2009 - 20.9

38. Palestine’s ranking on the Rule of Law Index (World Bank, Rank 0-100) 45.0 2009 - 41.3

39. Palestine’s ranking on the Political Participation and Accountability Index (World Bank, Rank 0-100)

22.3 2009 - 20.7

3 Number of kilometres is calculated on the basis of the population growth of 3%. 4 PCBS, Governance Survey of the Palestinian Territory, 2008. 5 PCBS, Governance Survey of the Palestinian Territory, 2008.

10 2. Macroeconomic Indicators of the Palestinian Economy in 2012

2. Macroeconomic Indicators of the Palestinian Economy in 2012

The Palestinian economy is particularly distinct from other Arab economies. Compared to neighbouring countries, Palestine has a relatively small economy, which is subject to a plethora of Israeli restrictions that debilitate its growth potential. According to the most recent data released by the PCBS and other sources, this section sheds light on major developments introduced to Palestinian economic indicators between 2008 and 2012, with a special focus on a set of indicators pertaining to the economic situation.

Developments of the Palestinian Economy Performance

According to the PCBS data,6 the economic situation in the Palestinian territory has not generally changed throughout 2012. The Palestinian economy is still impaired by a declining standard of living, rising poverty, low productivity, and a high rate of population growth.

Recently, the PNA has been further crippled by an exacerbating financial crisis. As a result, the PNA is incapable of repaying due liabilities. Causes of the PNA financial crises can be summed up as follows:

Declining external aid to the PNA. Compared to US$ 977 million in 2011, only US$ 600 million were granted in aid to the PNA. In contrast with 2007, external aid sharply declined by US$ 1,111 million.

Rising deficit in the trade balance. This represents the difference between Palestinian exports and imports of goods and services. The trade balance deficit jumpstarted from US$ 2523.2 million in 2006 to US$ 3469.9 million in 2010, and continued to climb to US$ 4265.7 million in 2011.

Widening gap between public revenues and public expenditures, resulting in a budget deficit. Prior to financing, budget deficit marked US$ 1303 million in 2012 compared to US$ 1583 million in 2011.

A broad gap between development and recurrent expenditures. In 2011 and 2012, development expenditures scored only 10% of total expenditures.

Receding external aid has caused a rise of the PNA public debt as a result of increasing bank loans. In 2012, public debt rose to US$ 2203 million, including US$ 1106.8 million as local debt and US$ 1096.8 as external debt.

The following set of indicators explains the Palestinian economy performance:

6 Having reviewed a number of other sources, the PCBS is the main source of data. Data released by other sources are not different from those of the PCBS.


Real GDP per capita

Real GDP per capita reflects social welfare. PCBS data show that the real GDP per capita slightly rose from US$ 1635.2 in 2011 to US$ 1679.3 in 2012 – an increase of 2.7%. In comparison to US$ 2037.6 in 2011, real GDP per capita in the West Bank registered US$ 2093.3 in 2012. In the Gaza Strip, real GDP per capita rose from US$ 1042.8 in 2011 to US$ 1074.5 in 2012. The steady population growth across the Palestinian territory has effectively reduced real GDP growth.

GDP

GDP saw a rise in 2012. In fixed prices, GDP amounted to US$ 6797.3 million compared to US$ 6421.4 in 2011, reflecting an economic growth of 5.9%.

Throughout 2012, the Palestinian territory registered growth in the majority of economic activities, with the exception of agriculture, forestation and fishing which featured a significant decline. Growth mainly affected major economic activities with a relatively higher contribution to the GDP. In this vein, services scored the highest growth (13.2%) in 2012, followed by construction works (6.5%) and ICT (5.9%).


Unemployment

A most significant goal of the economy is to reach a stage where unemployment is low. However, PCBS data indicate a remarkable rise in unemployment rates, increasing from 20.9% in 2011 to almost 23% in 2012. It is worth noting that the Gaza Strip has seen a higher unemployment rate than the West Bank. Unemployment rose from 28.7% in 2011 to 31% in 2012. On the other hand, unemployment climbed in the West Bank from 17.3% in 2011 to almost 19% in 2012.

Participation in the workforce

According to PCBS statistics of the Palestinian workforce, participation in the labour market marked a mediocre rise of 43.6% in 2012 compared to 43.0% in 2011. This is a result of the increasing number of persons who entered the labour market. In comparison to 1,059,000 individuals in 2011, the workforce expanded to 1,114,000 in 2012. Despite this rise, participation in the workforce is still low in comparison to most neighbouring countries. The percentage also varies between the West Bank and Gaza: participation in the workforce in the former marked 45.5% in 2012 compared to 40.1% in the latter. Reflecting a notable improvement in Gaza participation rate (38% in 2011), participation in the labour market in the West Bank did not change throughout 2012.


Total net revenues

The PNA relies on a set of sources for public revenues, including clearance revenues, local tax revenues, and external aid. The chart to the right shows the amount of local revenues between 2008 and 2012. Compared to US$ 2254 million in 2011, local revenues slightly rose to US$ 2354 million in 2012. According to the chart, revenues saw a low annual increase.

Total grants and aid7

Over the past few years, donor grants and aid earmarked for budget support and funding of development initiatives have fluctuated. In 2012, donor grants and aid dropped to US$ 600 compared to US$ 977 given in 2011. Of the total development expenditures, the amount of external aid plummeted from 30% in 2011 to 17% in 2012. Obviously, PNA public expenditures remained almost the same over recent years. Still, public expenditures rose to US$ 3538 million in 2012 compared to US$ 3257 million in 2011.

7 Figures reflect total external aid to budget support and funding of development projects as a whole.


Exports and imports8

In 2012, total exports of goods and services registered US$ 1898.6 million (in current prices). Imports scored US$ 7165.1 million. Compared to 2011, exports rose by 5.3% in 2012. Compared to the year before, imports increased by 9.7% in 2012.

Against this background, the trade balance deficit jumped to US$ 5266.5 million in 2012 – a rise of 11.4% in contrast with 2011. It should be noted that Palestine’s foreign trade is mostly limited to Israel.

Cost of living index (Consumer Price Index)

Published data and statistics indicate a rising cost of living index (index of consumer prices) in 2012, marking an increase of 2.78% compared to 2011. This includes 4.08% in the West Bank and 0.48% in the Gaza Strip. Compared to 132.71 in 2011, the cost of living index totalled 136.40 in 2012. The main cause of the high cost of living throughout the Palestinian territory is ascribed to rising prices of all main food categories. Fresh vegetables rose by 15.03%, poultry by 8.91%, tobacco by 7.42%, fuel for transportation purposes by 5.81%, education services by 5.47%, electricity and fuel for domestic uses by 3.67%, healthcare services by 3.06%, and fresh fruits by 2.17%.

8 Data reflect preliminary estimates released by the PCBS.


Policies to be implemented to enhance the Palestinian economy performance

Having investigated a set of the most important indicators of the Palestinian economy over 2008-2012 (the period covering implementation of both the PRDP 2008-10 and the NDP 2011-13), the Palestinian economy is undoubtedly obstructed by certain impediments, which have adversely reflected on the broader economic performance. In spite of the PNA’s unrelenting effort to enhance and scale up the standard of living in the Palestinian territory, Israeli practices and restrictions have effectively impeded achievement of short- and long-term economic goals.

Though progress in development initiatives was not marked, released data show that the Palestinian territory has accomplished a slight economic growth. Hence, policies should be implemented with a view to positively impact on the Palestinian society from across the spectrum, eradicate poverty and unemployment, and achieve social justice in income distribution. These should:

Work towards creating employment opportunities for graduates and unemployed young people, paying special attention to the poor who lack a source of income.

Raise the wage rate. Over the past years, the wage rate and real value of daily wages depreciated a great deal. The individual purchasing power is now low as a result of the steady rise of prices.

Develop various policies to encourage the private sector to allocate more funds to projects that serve the broader society.

Maintain stable prices and control inflation.

Implement a policy with a view to constrain varying income distribution. The income distribution shows a significant variation throughout the Palestinian territory.

16 3. Challenges to NDP Implementation

3. Challenges to NDP Implementation

3.1. Challenges

Some major factors have negatively affected the planned implementation of the NDP 2011-13:

Absent legislative role: Dysfunctional Palestinian Legislative Council (PLC) has impeded implementation of institutional reforms, which require a review, amendment or enactment of needed laws and regulations.

A weak prioritisation mechanism for development projects: Sector strategies proposed development interventions associated with sector strategic policies and objectives. However, proposed interventions were not linked to financial and human resources available at government agencies. Proposals were based on an examination of sector needs, but did not identify cross-cutting priorities. When the NDP 2011-13 was developed on grounds of sector strategies, a clear list of priority national development projects, which is associated with financial and human resources and in tandem with sector strategies, was not compiled. The NDP integrates all 32 national sectors within four major sectors (Social, Infrastructure, Economy and Governance). As a result, objectives of each sector have been neglected. A clear framework of action has also been absent from all government bodies. These have relied on sector and cross-cutting strategies instead of the NDP 2011-13, resulting in the implementation of projects, which did not reflect national priorities.

The NDP 2011-13 process is not informed by available financial resources. The NDP exercise was not associated with available financial resources. A development budget has been earmarked for main interventions based on unrealistic estimates, which did not reflect the PNA real financial resources and donor support over the past years.

Weak institutional capacity to manage and implement development projects: The donor community stipulates establishment of robust institutions that are capable of managing and operating development initiatives. To this avail, Palestinian institutions should be able to cover respective operating expenses by service fees collected from beneficiaries. LGUs, particularly village and rural councils, are incapable of managing and operating proposed development projects due to absent management requirements. As a result, LGUs are restructured or joint service councils are created to ensure a capable, informed management of development exercises. However, implementation is delayed by short coordination between relevant government agencies and bureaucratic processes. Additionally, cross-cutting development projects are impaired by inadequate coordination between various government actors, disrupting operations and delaying outputs of relevant national committees.

17 3. Challenges to NDP Implementation

The occupation disrupts implementation of many projects across sectors: Israel effectively impedes implementation of water supply projects and wastewater treatment plants by licence restrictions posed by the Israeli-Palestinian Joint Water Committee and Israeli Civil Administration. In relation to international gateways, Israel has also obstructed rehabilitation of the Yasser Arafat International Airport and Gaza Port.

3.2. Monitoring and Evaluation

Many achievements have been made in relation to monitoring and evaluation:

A significant number of line ministries and government bodies have shown an increasing interest and constructive response to monitoring and evaluation exercises. Accordingly, monitoring processes will scale up over upcoming years. Future planning exercises will build on monitoring and evaluation outputs.

Indicator measurement has improved the quality of data relating to certain indicators. More concise and reliable data can be collated and used as baselines to help set targets for upcoming years.

National indicators have been in place to help assess Palestine’s performance on an international level.

Special challenges to monitoring and evaluation:

Despite the increasing interest in monitoring and evaluation by line ministries and government bodies, institutional capacity has not reflected itself in the process of developing the monitoring and evaluation framework to help respond to requirements of the monitoring and evaluation process.

Some line ministries have not collated periodic data on certain indicators in order to assess the progress they have made. In particular, data was not gathered about indicators that require surveys and opinion polls.

A well-organised database of projects and performance indicators is not place in many line ministries and government agencies.

Data on projects implemented by some donors are not available.

Bureaucratic processes in some line ministries impede a timely data collection.

18 4. Recommendations

4. Recommendations

Review sector-based prioritisation mechanism: The NDP process should include a list of national priority projects associated with available financial resources and linked to national strategic goals and a monitoring and evaluation framework. This framework will include performance indicators and targets to be attained within the NDP timeframe. As sector strategies include a list of development initiatives, the MoPAD, MoF and relevant line ministries will select priority projects from the lists of proposed cross-cutting projects, which can be implemented in line with available budgets. The NDP proposed list of projects will also be introduced to the donor community through the MoPAD Aid Management and Coordination Directorate. The NDP proposed projects should not be waived by a decentralised coordination between government bodies and donor countries.

Review the NDP development budget mechanism: The national planning exercise should be informed by available financial resources. A development budget has been earmarked for main interventions based on unrealistic estimates, which did not reflect the PNA financial resources and donor support over the past years. Therefore, a realistic development budget should be prepared, reflecting PNA domestic resources and volume of projected external support.

Reinvigorate the PLC: According to the NDP 2011-13, institutional reform is a primary intervention across national sectors. As institutional reforms often require the enactment of laws, bylaws and regulations, desired reform processes cannot be materialised with a dysfunctional PLC. Otherwise, these reforms will be untenable. In the infrastructure sector, there is a dire need to enact deterrent laws and bylaws to prevent theft of infrastructure networks, particularly water supply and electricity grids. Laws are also needed to provide for environmental conservation, protection of natural resources, and solid waste management. Additionally, regulations should be developed to govern the telecommunications and housing sectors.

Provide capacity building to LGUs to collection service fees: Many LGUs owe a significant debt to the government because they are incapable of collecting service fees, including water supply, sewerage, electricity and solid waste. Therefore, it is recommended that an integrated financial regulation, which sets service cost and tariff, be developed and put in place. An accounting regulation will also be compiled to set a fee collection mechanism throughout LGUs.

Provide capacity building to government bodies to help them manage and implement development projects: A set of problems have impeded institutional capacity to effectively and efficiently implement development projects:

o Many LGUs lack proper human and administrative capacities to manage water and wastewater management projects, thereby disrupting or delaying these initiatives. To this avail, a detailed plan should be devised to provide capacity building to LGUs to enhance implementation of development exercises, particularly water and wastewater management. Joint service


councils or specialised units will be established to ensure a capable management of development projects.

o Multiple donors, which support development programmes and projects, result in multiple tender, procurement and administrative processes, further delaying project implementation. Therefore, all tender, procurement and administrative procedures should be consolidated. The Government should liaise with the donor community with a view to adopt unified Palestinian processes to help manage and implement development projects.

o Development programmes should constitute an integrated system that is supervised by a set of line ministries and government agencies. To ensure effective and sustainable project implementation, coordination will be maintained between all relevant actors.

Make a concerted effort to ensure successful implementation of strategic infrastructure projects: Financial resources are available for completion of the electricity connection between Egypt and Gaza, construction of the Ramallah and El Bireh sanitary landfill (Rammun Dump), and installation of the Ein Jaryut wastewater treatment plant for Beituniya and Ramallah. These are national priority projects, which will contribute to enhancing public service quality and improving the currently deteriorated environmental situation. It is recommended that the Inter-ministerial Infrastructure Committee follow up on and prioritise these projects with a view to remove obstacles that have impeded the Government capacity to put them in place.

Promote an environmental management system in the public and private sectors: In addition to promoting and disseminating environmental conservation principles, the environmental management system contributes to saving and streamlining expenditures. It is recommended that this system by applied throughout government bodies as a preliminary step towards dissemination to private sector actors.

Promote “green construction” principles: The concept of green construction (or sustainable building) contributes to creating a proper environment and reducing operating expenses. Green construction uses and rationalises consumption of natural resources and renewable energy. In particular, it can be used in the construction of schools, universities, government agencies, and private sector facilities.

Provide monitoring and evaluation capacity building to line ministries and government actors: Some government agencies face difficulties in collecting data on development projects and performance indicators. As a practical input into sound planning, these data are also a cornerstone of assessing progress with a view to materialise strategic objectives. Therefore, data collection from intrinsic sources, including donors, should be enhanced and provided timely. In this vein, it is recommended that:

o Throughout line ministries and government bodies, monitoring and evaluation tasks are assigned to specialised units, which has full powers to


collect data from respective directorates, departments and service providers. In the course of implementing assigned functions, these units will work in coordination with the MoPAD Monitoring and Evaluation Directorate.

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