Egyptian President Hosni Mubarak and Syrian President Bashar Assad (AP)
The current economic outlook for the OPTs is bleak. Despite $10 billion in international aid since the formation of the Palestinian Authority in 1993, the Palestinian people are getting poorer and
65 per cent now live below the poverty line. For the Palestinians, further economic malaise will only increase humanitarian suffering. For the Israelis, economic deterioration in the OPTs can
only increase security risks. For both sides, the current vicious cycle of poverty and unemployment contributing to instability and conflict, and in turn further poverty and unemployment, must be broken.
Sustainable economic growth in the OPTs can come only from the private sector, whose development is currently held back by a number of barriers. While these are numerous, five building blocks of an economic roadmap for sustainable progress have been identified. First, the economy needs to be stabilised by reducing public expenditure, specifically the public wage bill, which could be temporarily underpinned by donor-funded employment and investment programmes. Second, a stable relationship between the Palestinian and Israeli economies needs to be established to provide a reliable framework for private sector led growth. Third, flowing from this, the right balance must be struck between short-term security and allowing movement and access, to allow both prosperity and security for the future. Fourth, the Palestinian economy must diversify its trade links and improve its access to global markets. Fifth, the private sector needs to be supported by enhancing the investment climate. Access the full article>>

