Palestinian National Development Plan - Sixth Development Policy

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The presented Sixth Development Policy Grant (DPG VI) for West bank and Gaza is a standalone operation aimed at supporting the Palestinian authority (PA) in managing public finances under difficult circumstances. The operation will focus on three specific policy areas. The development objectives the operation seeks to achieve in each of these policy areas are as follows: (1) reducing the PA's recurrent fiscal deficit; (2) improving effectiveness and transparency of public finances; and (3) improving business climate. Specifically, the DPG will support the PA's efforts in reducing the fiscal deficit amid declining donor aid, and to reform and further strengthen public finance management and public financial management (PFM) systems. The DPG VI will provide support to the PA's 2014 budget in the amount of United States (U.S.) 40 million dollars. As envisaged in the FY2012-14 interim strategy note, DPG VI remains a key instrument aimed at supporting the PA's strategic priorities, advancing the policy dialogue, and also providing essential financing for the PA's budget. The peace process is opening up a prospect of rapid economic growth, but comes at a time of a sharp growth slowdown. The economic prospects are highly uncertain and depend very much on the outcome of the ongoing peace process.