2018年-IMF国际货币组织全球_West_Bank_and_Gaza_Report_to_the_Ad_Hoc_Liaison_Committee_54页_1mb

Summary of the Report on the West Bank and Gaza

Core Content

The report provides an analysis of the economic situation in the West Bank and Gaza, highlighting the deepening political and economic challenges that threaten long-term stability and growth. The context is marked by rising tensions between key stakeholders, increased violence in Gaza, and the impact of U.S. embassy relocation to Jerusalem, which has further destabilized the region. The report outlines the current economic conditions, future outlook, and key policy themes that need to be addressed to ensure sustainable development and financial stability.

Main Issues and Challenges

• Political Tensions: The rift between the Palestinian Authority (PA) and the Government of Israel (Gol) has worsened, with border closures, legislative changes, and the PA's skepticism toward the U.S. peace plan.
• Humanitarian Crisis in Gaza: Gaza is experiencing a severe economic and humanitarian downturn, with high unemployment, deepening poverty, and a deteriorating infrastructure.
• Economic Decline: Real GDP growth in the West Bank and Gaza (WBG) has slowed, with Gaza facing a sharp decline of -6% in 2018Q1. The overall GDP growth is projected to remain below 2% annually.
• Fiscal Strain: The PA has been forced to accumulate arrears due to declining revenues and spending cuts. The withholding of clearance revenues (CRs) under new Israeli legislation threatens to further strain the fiscal position.
• Financial Sector Vulnerabilities: The banking sector is under pressure due to high exposure to the PA, weak loan quality, and liquidity constraints. The PMA has initiated loan restructuring, but the risks remain significant.
• External Constraints: The region faces persistent external imbalances, including a large current account deficit and limited access to international markets. These are exacerbated by Israeli restrictions and the lack of progress in reconciliation between Fatah and Hamas.

Key Policy Themes

A. Policymaking in Fragility and Uncertainty

• Gaza's Decline: Gaza's economic performance has lagged significantly compared to the West Bank, with a stunted development model that makes it more vulnerable to shocks.
• Humanitarian Needs vs. Development: Donor aid has increasingly shifted toward humanitarian purposes, reducing support for development and infrastructure projects. This creates a vicious cycle of economic stagnation.
• Spillover Effects: The economic hardship in Gaza could negatively affect the West Bank through the still-active banking sector connections. Credit risks are rising, which may constrain economic activity and investment.
• Need for Reconciliation: Resuming Fatah-Hamas reconciliation is essential to stabilize Gaza's economy, reduce spillovers, and improve the overall economic outlook.

B. Securing Fiscal Sustainability

• Fiscal Deficit: The overall fiscal deficit in 2017 was 8.1% of GDP, and in the first half of 2018, it remained at around 6% of GDP.
• Spending Cuts: The PA has implemented significant spending restraint, including retrenchment of personnel, salary cuts, and capping electricity subsidies, which has limited the decline in total spending to 7% YoY.
• Revenue Challenges: Declining customs receipts and CRs, combined with the impact of Israeli legislation, are putting further pressure on the fiscal position.
• Arrears Accumulation: The PA's reliance on donor aid and the inability to fully fund its operations have led to the accumulation of arrears, which could undermine public service delivery and economic stability.
• Reforms Needed: A comprehensive approach to fiscal reforms is essential, including strengthening the fiscal framework, public institutions, and improving transparency to regain donor confidence.

C. Preserving Financial Stability

• Banking Sector: Despite overall soundness, the banking sector faces risks due to high exposure to the PA and its employees, and weak loan quality in Gaza.
• Loan Restructuring: The PMA has restructured approximately US$350 million in loans to PA employees, extending maturities to 15–20 years, which may impact banks' profitability.
• Correspondent Banking Relations (CBRs): CBRs remain intact but strained due to diverging positions between Israel and the PA. The PA is preparing for an AML/CFT evaluation, but Israel has conditioned its support on IMF involvement.
• Capital Adequacy: Banks need to replenish capital buffers to a minimum of $75 million and progress toward Basel III compliance to safeguard the financial system.

Outlook and Risks

• Economic Outlook: The outlook is bleak, with the WBG economy expected to grow at around 1.5% in 2018-19, and only marginally higher in subsequent years.
• Gaza's Prospects: Gaza is projected to contract further in 2018 and 2019 (-4% and -1.5%, respectively), with no expectation of returning to positive growth in the medium term.
• Risks: Prolonged economic hardship, increased unemployment, and worsening poverty could lead to large-scale unrest. Continued donor aid cuts and Israeli restrictions on movement and access are persistent risks to economic stability.
• Positive Outlook: Revived reconciliation efforts and a more effective peace process could help alleviate economic challenges and improve the outlook.

Conclusion

• Comprehensive Reforms: Success in stabilizing the Palestinian economy and promoting growth will depend on a coordinated effort among the PA, Israel, and donors to implement reforms and strengthen institutions.
• Institutional Strength: Strong public institutions are crucial for long-term economic development and stability. The report emphasizes the need to improve governance, property rights, and accountability.
• Donor Role: Donors must continue to support development initiatives, including infrastructure projects in Gaza, to ensure sustainable economic growth and reduce reliance on humanitarian aid.

Key Figures and Data

• GDP Growth: Slowed to 3.1% in 2017 and 2% in 2018Q1.
• Unemployment Rate: Exceeded 32% in 2018Q2, with Gaza nearing 54%.
• Fiscal Deficit: 8.1% of GDP in 2017 and 6% of GDP in 2018H1.
• Donor Aid: A significant portion of donor support is directed toward humanitarian purposes, reducing investment in growth.
• Banking Sector: Exceeds 100% of GDP, with strong linkages to the PA and private sector.

Supporting Boxes and Annexe

• Box 1: Highlights the shift in donor aid toward humanitarian purposes and the resulting impact on development funding.
• Box 2: Discusses the spillover effects of Gaza's economic hardship on the West Bank, particularly through the banking sector.
• Box 3: Emphasizes the importance of strong institutions for economic growth and development, referencing key research and policy considerations.

The report underscores the urgent need for a unified approach to address the complex interplay of political, economic, and social challenges in the West Bank and Gaza.