The Palestinian Reform and Development Plan: A Primer

February 15, 2008

Egyptian President Hosni Mubarak and Syrian President Bashar Assad (AP)

The Palestinian Reform and Development Plan (PRDP) was presented by Prime Minister Salaam Fayyad at the Paris Donors Conference on December 17, 2007. The three-year plan aims to lay the foundations for a future Palestinian state and build its infrastructure and economy. It has been widely endorsed by donor governments, including the EU and the United States, along with the International Monetary Fund and the World Bank.

Governance:
The PRDP proposes the improvement of the institutional capabilities of the Palestinian National Authority (PNA) through a number of reforms and new initiatives, including:
• the trimming of the size of the PNA to an effective, affordable organization;
• the creation of a new security service that is loyal to the PNA along with improvements in the justice system and increased accountability and transparency; and,
• defining the relationship between local government and the PNA and making government more accessible.

Social Development:
The plan also calls for the development of the capacities of the Palestinian people by:
• focusing on efficiently coordinating social protection programs to maximize their benefit;
• expanding the Palestinian education system as population expands as well as supporting higher and vocational education;
• rebuilding the Palestinian territories’ health system and making it affordable for its citizens; and,
• empowering traditionally-neglected groups through women and youth empowerment programs.

Economic and Private Sector Development:
The PRDP envisions an open, free market economy based on the private sector, which it seeks to develop through:
• economic programs targeted at agriculture, industry and services, tourism, and the construction of new, affordable housing;
• the building of economic capabilities, such as the industrial and tourism sectors;
• targeted support for small- and medium-sized enterprises; and,
• seeking further markets for the Palestinian economy.

Public Infrastructure Development:
The plan notes a deficiency in public infrastructure due to conflict and under-development, which it aims to repair through:
• focusing on the building of new roads as well as improving the electric grid;
• outlining a need for greater water supply as well as a plan for wastewater treatment and solid waste facilities; and,
• proposing public recreation and cultural facilities.

Possible Macroeconomic/Fiscal Framework
To create a fiscal system that is less erratic and more independent the plan proposes a fiscal outline through 2010 that aims to bring recurrent expenditures down from 54% of GDP to 44% and better target these expenditures toward those in need. It also seeks to reduce the PNA’s budget deficit. This outline, however, is premised on gradual improvements in movement and access as well as PNA control of Gaza. Continued economic problems are forecasted if those impediments remain.

Implementation
The PRDP calls for tri-partite action to be successful.
• The PNA must impose law and order, implement key economic reforms and build effective governing institutions.
• Israel needs to remove the obstacles that hinder the proper functioning of government and the economy and hence the creation of a truly viable Palestinian state.
• The international community needs to provide aid to the PNA and support the peace process.

Additionally, the plan calls for better coordination and integration within the PNA and better coordination with NGOs and other parties working in the Palestinian territories as well as ‘untied’ donor commitments that allow the PNA to use funds as needed to meet objectives in a timely manner.



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A View from the Ground  —Darbaz Kosrat Rasul, chair, Rebaz Foundation. Interview with Middle East Bulletin.
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U.S.-Turkish Relations  —Ambassador Francis J. Ricciardone, Jr., recently returned deputy ambassador in Afghanistan; former ambassador to Egypt (2005-2008); and deputy chief of mission and charge d'affaires in U.S. embassy in Turkey (1995-1999). Congressional Testimony.

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