By Judith Ugwumadu | 22 May 2014

A $40m World Bank grant has been approved to support the Palestinian Authority in implementing fiscal reforms and building strong public financial management systems.

The Development Grant which aims to improve the PA’s fiscal position, build robust PFM systems and improve access to finances for Palestinian enterprises will contribute to building the institutions of a future Palestinian state, said the bank.

‘The World Bank remains committed to support the Palestinian Authority’s efforts to improve public finances, and to strengthen the business environment,’ said Steen Lau Jorgensen, World Bank country director for West Bank and Gaza.

‘Implementing fiscal and economic reforms and maximising the efficient use of resources helps the government be more responsive to the needs of the people and increases confidence in the institutions – resulting in a vibrant society with social equity.’

The bank added that the grant would help ease some of the PA’s fiscal stress as the country currently hit a stalemate in the peace process and a decline in economic growth.

Orhan Niksic, a senior economist at the bank, added that policy-linked budget support offered effective means of supporting reform programmes.

He said: ‘The operation builds upon the reform progress supported by previous Development Policy Grants. The fiscal situation remains difficult but the PA has made significant progress in further reducing its budget deficit and improving revenue performance.’