West Bank and Gaza – Area C and the future of the Palestinian economy

World Bank report

The Palestinian economy has experienced strong growth in recent years. This report examines the economic benefits of lifting the restrictions on movement and access, as well as other administrative obstacles, to Palestinian investment and economic activity in a region known as Area C. This region constitutes about 61 percent of the West Bank territory and was defined under the Oslo Peace Accords as the area that eventually would be transferred to the Palestinian Authority. Restrictions on economic activity in Area C of the West Bank have been particularly detrimental to the Palestinian economy. The Bank will focus on direct, sector-specific benefits, and also indirect benefits related to improvements in physical and institutional infrastructure, as well as spillover effects to other sectors of the Palestinian economy. The sectors examined are agriculture, Dead Sea minerals exploitation, stone mining and quarrying, construction, tourism, telecommunications, and cosmetics. Various physical, legal, regulatory and bureaucratic constraints that currently prevent investors from obtaining construction permits, and accessing land and water resources will be lifted. Current movement and access restrictions in force outside Area C prevent the easy export of Palestinian products and inhibit tourists and investors from accessing Area C. Further reforms by the Palestinian Authority will better enable potential investors to register businesses, enforce contracts, and acquire finance. Area C is important to future Palestinian economic development.

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