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The PA Economy: A House of Cards

(Jerusalem Post) David Rosenberg - The International Monetary Fund estimates that the West Bank's economy will probably grow 8% this year. The real reason the West Bank is booming is because of Western largesse - some $5.5 billion in three years, or an average of $456 per person per year. The lion's share of that money is going to fund the PA's budget deficit. It pays for too many teachers, government clerks, policemen and the like, not for new roads, schools or other investments that would develop infrastructure and provide the basis for long-term economic growth. It's essentially a big make-work scheme aimed at buying social and political peace. The kind of things that would represent real economic growth, like private sector investment in new factories, improvements in farming or new services, isn't happening much at all because the West Bank remains a lousy place to do business. Whether or not the West Bank gains independence, when the donor dollars dry up, the danger will reemerge.
2010-10-15 09:55:24
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