Emergency Assistance to Occupied Territories – Vol. 2 – Technical Assistance Program – World Bank report

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12760XO

March 1994

EMERGENCY ASSISTANCE TO THE OCCUPIED TERRITORIES

Volume lI: Technical Assistance Program

The World Bank

CONTENTS

Preface – i-ii

I. Executive Summary

Objectives and Approach – 1

Strategy and Priorities by Sector – 3

Implementation Arrangements – 7

Benefits – 8

Next Steps – 9

II. Program Description

Water Supply and Wastewater – 10

Electric Power – 14

Telecommunications – 16

Transportation – 18

Urban and Municipal Development – 21

Environment – 23

Solid Waste – 27

Education – 29

Health – 32

Economic Management – 35

Financial Management, Accounting and Auditing – 41

Private Sector – 44

Agriculture and Fisheries – 46

Financial Sector – 47

Housing – 50

Legal Affairs – 51

Tourism and Cultural and Natural Resources – 54

III. Program Implementation and Management

Implementation Arrangements – 56

Procurement – 57

Monitoring and Evaluation – 60

IV. Program Cost and Funding

Program Cost – 61

Program Funding – 61

Establishment of the Technical Assistance Trust Fund for the Territories – 61

Trust Fund Management and Cost – 62

Accounting and Auditing of Trust Fund Activities – 63

Donor Coordination – 63

V. Benefits and Risks – 64

Annexes

Annex 1. TA Program Activities by Sector – 67

Annex 2. TA Program by Sector and Type of Activity – 83

Annex 3. TA Program by Major Type of Activity – 87

Annex 4. List of Bank Mission Members – 89

Annex 5. List of Palestinian Counterparts – 91

Preface

On October 1, 1993—following the historic September 13 accord between Israel and the PLO—a donors' conference took place in Washington, D.C. to mobilize international support for economic and social development in the Occupied Territories. Participants in the conference felt strongly that there was an urgent need to deliver tangible benefits to the Palestinian population to reinforce the momentum towards peace. Towards that objective, participants pledged over US$2 billion in financial assistance and asked the World Bank to provide the framework and technical underpinning needed to use such assistance effectively.

Responding to the sense of urgency expressed by the donors, a World Bank mission visited the Occupied Territories from October 11 to November 22, 1993, following a brief visit to Tunisia to confirm the mission's objectives with the Palestinian leadership. In Tunisia, it was agreed that the World Bank mission to the Occupied Territories would seek:

– To provide a framework that would ensure effective use of donor assistance for meeting the immediate needs of the Occupied Territories;

– To identify technical assistance needs for building the Palestinian capacity to design and manage economic development programs; and

– To lay the groundwork for effective use of donor assistance over the longer term by identifying technical studies related to high priority policies, programs and projects.

Representatives from Denmark, the European Commission (EC), the European Investment Bank (EIB), Japan, Norway, Switzerland, and the United States Agency for International Development (USAID) participated in the mission. United Nations (UN) agencies—in particular the United Nations Relief and Works Agency (UNRWA), the United Nations Development Programme (UNDP), and the United Nations Children's Emergency Fund (UNICEF)—were also actively involved in mission work. UNDP and UNRWA seconded several experienced staff members from their local offices to the mission. Representatives of other donors were also consulted regularly and were kept abreast of developments. Extensive contacts were maintained with the local and international Non-Governmental Organizations (NG0s) active in the Occupied Territories. The mission also worked closely with a number of visiting delegations, including those from the UN, UNRWA, World Food Program (WFP), International Monetary Fund (IMF), International Labor Organization (ILO), UK, and Sweden.

The mission received excellent cooperation from the Palestinian and Israeli authorities. The Palestinians set up a highly professional and dedicated Counterpart Team to work with the mission. Mission members travelled extensively in both Gaza and the West Bank, meeting a broad spectrum of Palestinians concerned with issues of transition and socioeconomic development. On the Israeli side, the mission had extensive contacts with the Bank of Israel, the Civil Administration in charge of the Occupied Territories, and Israeli Ministries of Finance, Foreign Affairs, and Environment.

This report is based on the findings of the above mission. It relies heavily on descriptions and broad sectoral strategies elaborated in the World Bank study, Developing the Occupied Territories: An Investment In Peace (1993). The report is in two volumes. Volume I of the report describes the main issues affecting the various sectors of the Palestinian economy and presents proposals for investments designed to address those issues. It also describes the external financing requirements of the public sector—including the start-up and transitional expenditures of the new Palestinian administration. Volume II provides a detailed description of the complementary technical assistance package needed to support project preparation and to help with institution building for overall development.

An earlier draft of this report was discussed with the Palestinian and Israeli authorities by a follow-up Bank mission to the Occupied Territories during December 8-12, 1993. That was followed by further discussions at the first Consultative Group meeting for the Occupied Territories held in Paris on December 16, 1993. The draft report has been revised, as appropriate, to reflect comments and suggestions from the Palestinians and the Israelis, and from the Consultative Group.

Because of the many uncertainties affecting the Occupied Territories at this stage, it is important that the investment and technical assistance programs proposed in this report should be treated as indicative rather than as a blue print. To remain relevant and useful, the report will require regular updates in light of the unfolding peace negotiations and the actual implementation experience.

I. Executive Summary

Objectives and Approach

1.1 This report outlines a three-year program of priority technical assistance to help the Palestinian authorities build institutions and enhance their capacity for self-government, design policies and programs for sustainable development in the Occupied Territories (OT), and prepare and implement investments under the proposed Emergency Assistance Program. The report has been designed to give the reader a thorough understanding of the content of and justification for the TA program in the various sectors. Accordingly, it summarizes the medium-term development strategy in each sector, described in greater detail in Volume I; it then describes the TA priorities in each sector that flow from the sector strategy and the recommended sequencing of those activities; and, finally, it highlights, in summary form, the content and cost of each TA activity. Terms of reference for most activities proposed to be initiated in 1994 have been prepared in draft and are available in Project Files maintained at the Palestinian Economic Council for Development and Reconstruction (PECDAR) and at the World Bank.

1.2 Activities included in the TA program have been designed to:

– be consistent with the agreed sectoral strategy;

– facilitate the transition to self-government by helping develop institutional structures, administrative capacities and coherent policies at the sectored level;

– support the rehabilitation and reconstruction of existing public services and infrastructure; and

– support the implementation of investments to be funded under the Emergency Assistance Program (EAP), and the preparation of investments to be funded in the medium-term.

1.3 As the OT have been largely without their own government institutions, policies and programs for the past 27 years, there is a heavy agenda of technical assistance required. In sum, the program amounts to about 100 priority TA activities, phased over the next three-year period, with an estimated aggregate cost of about US$75 million, divided as follows:

A sector by sector breakdown of the TA program is provided in Annexes 1, 2, and 3.

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