JOINT STAFF WORKING DOCUMENT Implementation of the European Neighbourhood Policy in Palestine Progress in 2012 and recommendations for action Accompanying the document JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS European Neighbourhood Policy: Working towards a Stronger Partnership
Date: 2013-03-20
Institutions: European Commission, High Representative of the Union
Subjects: European neighbourhood policy, Palestine, Palestine question, democratisation, economic integration, economic reform, educational reform, institutional reform, political cooperation, political reform, sustainable development, trade cooperation

EUROPEAN 
COMMISSION 

HIGH REPRESENTATIVE OF THE
EUROPEAN UNION FOR
FOREIGN AFFAIRS AND
SECURITY POLICY

Brussels, 20.3.2013  
SWD(2013) 82 final 

JOINT STAFF WORKING DOCUMENT 

Implementation of the European Neighbourhood Policy in Palestine 
Progress in 2012 and recommendations for action 

Accompanying the document 

JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, 
THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE 
COMMITTEE OF THE REGIONS 

European Neighbourhood Policy: Working towards a Stronger Partnership 

{JOIN(2013) 4 final} 
{SWD(2013) 79 final} 
{SWD(2013) 80 final} 
{SWD(2013) 81 final} 
{SWD(2013) 83 final} 
{SWD(2013) 84 final} 
{SWD(2013) 85 final} 
{SWD(2013) 86 final} 
{SWD(2013) 87 final} 
{SWD(2013) 88 final} 
{SWD(2013) 89 final} 
{SWD(2013) 90 final} 
{SWD(2013) 91 final} 
{SWD(2013) 92 final} 
{SWD(2013) 93 final} 

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  EN 

 
 
 
 
  
 
 
 
1. 

OVERALL ASSESSMENT AND RECOMMENDATIONS 

This  document  reports  on  overall  progress  made  on  the  implementation  of  the  EU-
Palestinian Authority (PA) European Neighbourhood Policy (ENP) Action Plan between 
1  January  and  31  December  2012,  although  developments  outside  this  period  are  also 
considered  when  deemed  relevant.  It  is  not  a  general  overview  of  the  political  and 
economic  situation  in  Palestine.  For  information  on  regional  and  multilateral  sector 
processes  readers  should  also  refer  to  the  Partnership  for  Democracy  and  Shared 
Prosperity progress report. 

The  EU-PA  ENP  Action  Plan  was  signed  in  May  2005  for  a  period  of  five  years.  Its 
validity has since been extended. On 24 October 2012, the EU's High Representative for 
Foreign  Affairs  and  Security  Policy/  Commission  Vice  President  (HR/VP)  Catherine 
Ashton  and  Palestinian  Prime  Minister  Salam  Fayyad  announced  the  conclusion  of 
negotiations on a new ENP Action Plan, which will be adopted following the completion 
of  the  two  sides'  respective  internal  procedures.  In  2012,  the  number  of  EU-PA  ENP 
subcommittees also increased, marking a landmark year in the PA’s participation in the 
ENP. All six subcommittees and the Joint Committee were convened in 2012. 

Overall the PA made reasonable progress in implementing the Action Plan in the areas in 
which it is able to exercise control. The challenges imposed primarily by the occupation 
and  the  deepening  fiscal  crisis  continued  to  have  an  impact  on  the  PA,  threatening  its 
viability and undermining its ability to deliver essential services to the population. These 
realities, coupled with the ongoing division between the West Bank and the Gaza Strip, 
the  inability  to  hold  national  elections  and  the  continued  suspension  of  the  work  of  the 
legislature  all  risk  seriously  undermining  achievements  in  the  state-building  process 
under the leadership of President Mahmoud Abbas and Prime Minister Salam Fayyad. 

On 29 November the United Nations General Assembly (UNGA) voted in favour of non-
member Observer State status in the United Nations for Palestine. In response, Israel did 
not  transfer  the  clearance  revenues  it  collects  on  behalf  of  PA  using  the  money  instead 
largely to pay off PA debts to Israeli utilities. The transfer of tax revenues is a contractual 
obligation  under  the  Paris  Protocol.  Israel  also  accelerated  settlement  activities  beyond 
the  Green  Line  by  depositing  of  3,426  settlement  housing  units  in  the  E1  area  for 
approval  and  approving  major  construction  plans  in  the  settlements  of  Ramat  Shlomo, 
Givat Hamatos and Gilo. 

The UNGA vote was preceded by a major escalation of violence in the  Gaza Strip  and 
Israel, which concluded with an Egyptian-brokered ceasefire agreement on 21 November. 
As a result of eight days of fighting an estimated 158 Palestinians were killed, including 
103  civilians  (33  children  and  13  women).  Approximately  1,269  Palestinians  were 
reported  injured.  Six  Israelis  (four  civilians  and  two  soldiers)  were  reported  killed  by 
Palestinian rocket fire and 224 Israelis were injured, the vast majority being civilians. A 
terrorist attack in Tel Aviv on 21 November injured 23 people, three severely. 

2 

 
 
There  was  no  tangible  progress  in  the  implementation  of  the  reconciliation  agreement 
between  Fatah  and  Hamas  signed  in  2011,  which  should  have  led  to  the  holding  of 
general elections. On a positive note, Palestinians took part in a participatory democratic 
process for the first time in six years as municipal elections were held in the West Bank 
in  October  2012.  In  a  local  statement,  the  EU  welcomed  the  holding  of  these  well-
organised  elections  and  stated  that  it  looked  forward  to  future  elections  across  the 
occupied  Palestinian  territory.  Since  the  Gaza  escalation  of  November  2012  and  the 
successful UN General Assembly bid led by President Abbas, there have been signs that 
Fatah  and  Hamas  are  adopting  a  more  considered  approach  towards  reconciliation  with 
both sides allowing their respective political opponents to demonstrate freely towards the 
end of the year. 

In 2012, there was some progress on human rights issues such as the development of a 
PA national action plan for human rights and the removal of security clearance for public 
sector recruitment, yet various human rights violations, e.g. of freedom of expression and 
assembly, denote an overall diminishing of democratic space. In the West Bank, no major 
progress was made security sector reform, one of the key recommendations of last year’s 
progress report. There was also a worrying increase in alleged human rights abuses by the 
security forces. There was some progress in the justice sector but more needs to be done 
to streamline the sector in line with international standards. The human rights situation in 
the  Gaza  Strip,  where  10  death  sentences  were  carried  out  in  2012,  continued  to 
deteriorate. 

GDP  growth  in  Palestine  is  expected  to  have  decelerated  to  around  6.0%  in  2012  from 
9.9%  in  2011.  Unemployment  is  high  and  rising  in  both  the  Gaza  Strip  and  the  West 
Bank.  By  the end  of  2012, the PA’s financing gap  was approximately USD600  million 
resulting  from  a  shortfall  of  donor  aid  (direct  financial  support),  higher-than-expected 
expenditure  and  lower-than-expected  revenue  with  a  negative  effect  on  growth.  The 
decision by Israel at the end of 2012 to use clearance revenues, which account for about 
two  thirds  of  Palestinian  budget  revenues,  to  repay  debts  further  exacerbated  the  PA’s 
pre-existing  financial  crisis.  Beyond  the  immediate  reasons  for  the  current  fiscal  crisis, 
there  are  a  number  of  structural  problems  severely  hindering  the  development  of  the 
Palestinian  economy.  These  include  restrictions  on  access  and  movement  including  the 
separation of the East Jerusalem market from the rest of the West Bank, the restrictions 
on Area C and the Gaza closure. 

With  regard  to  social  protection,  progress  was  achieved  in  addressing  inclusion  and 
exclusion  errors  in  the  Cash  Transfer  Programme,  the  most  important  component  of 
existing  social  assistance  schemes  across  Palestine,  and  in  facilitating  coherence  and 
convergence  in  the  targeting  and  delivery  of  services.  The  PA  continued  to  make  good 
progress  in  the  energy  sector  with  the  adoption  of  a  national  strategy  for  renewable 
energy and an energy efficiency action plan. Promising reforms begun in the water and 
sanitation sector. 

Most of the key recommendations contained in the last year's ENP progress report have 
yet  to  be  addressed,  and  remain  valid.  Some  have  been  acted  on  however,  including 
holding  local  elections,  further  improving  public  finance  management  and  developing 

3 

 
 
costing models in the social protection sector. On the basis of this year’s report and with 
a  view  to  sustained  implementation  of  the  ENP  Action  Plan  in  2013,  the  Palestinian 
Authority is invited to1: 

•  Advance intra-Palestinian reconciliation in line with the principles set out in President 

Abbas’ speech of 4 May 2011 based on a commitment to the two-state solution. 

•  Work  towards  holding  presidential  and  legislative  elections  in  the  oPt  in  line  with 

international standards. 

•  Reform  and  develop  the  Palestinian  security  sector,  institutionalising  democratic 
control, promoting an environment conducive to civilian oversight and accountability 
for individuals suspected of abuses, and ensuring full respect of human rights by all 
security sector agencies, in particular for all detainees. 

•  Adopt  a  unified  penal  code  which  adheres  to  international  human  rights  standards, 
and strengthens legal guarantees for all fundamental freedoms. Fully abide by the de 
facto moratorium on the death penalty and work towards a de jure moratorium. 

•  Clarify the responsibilities of the three main judicial institutions namely the Ministry 

of Justice, the Office of the Attorney General and the High Judicial Council. 

•  Rationalise  recurrent  expenditure  by  taking  steps  to  reduce  in  particular  non-wage 
costs, to ensure the sustainability over time of social protection spending as well as by 
taking steps towards pension reform.   

•  Continue developing the necessary legal and institutional framework for an integrated 
water  and  wastewater  management  system  to  ensure  equitable  service  delivery  and 
resource sustainability all over the oPt.  

•  Start work on a post -2014 Palestinian National Development Plan  

•  Sign and ratify the regional Convention on pan-Euro-Mediterranean preferential rules 

of origin. 

Governance  (including  reform  of  the  security  and  justice  systems),  water  and  private 
sector development are focal sectors of EU co-operation with the Palestinian Authority, 
with a number of ongoing projects intended to assist the PA in making progress towards 
accomplishing the recommendations. 

1 Most of the recommendations from last year’s progress report remain valid.  

4 

 
 
 
 
 
                                                 
2.  

POLITICAL DIALOGUE AND REFORM  

Towards deep and sustainable democracy 

The  democratic  legitimacy  of  the  PA  continued  to  decrease  in  the  absence  of  national 
elections.  Due to the ongoing internal Palestinian political split between West Bank and 
the Gaza Strip, the Palestinian Legislative Council remains paralysed and laws continue 
to be issued by Presidential Decree. Holding presidential and legislative elections across 
Palestine remains a priority precondition for the reinvigoration of democratic legitimacy, 
institutional  sustainability  and  the  reinforcement  of  good  governance.  A  positive 
development  was  the  holding  of  local  elections  on  20  October  for  93  out  of  353  local 
councils. This was the first democratic exercise in Palestine since 2006, despite the fact 
that not all political factions participated in the polls and the fact that they took place only 
in  the  West  Bank.    A  second  round  of  elections,  scheduled  for  24  November  was 
postponed  as  a  result  of  the  Gaza  escalation  in  November  and  took  place  on  22 
December. 

The implementation of the reconciliation agreement of May 2011 aimed at bridging the 
internal  Palestinian  split,  including  through  the  organisation  of  presidential  and 
legislative elections, did not yield concrete results in 2012. Brokered by Qatar, President 
Abbas  and  Hamas  political  leader  Khaled  Meshaal  signed  a  follow-up  agreement  on 
reconciliation (the 'Doha Declaration') in Qatar on 6 February 2012. In May, Fatah and 
Hamas negotiators signed another reconciliation deal in Cairo, including a timeline for its 
implementation.  However,  on  2  July,  Hamas  suspended  voter  registration  operations, 
citing  obstacles  that  needed  to  be  removed  by  the  parties  involved.  The  reconciliation 
process  has  since  been  stalled.  Following  the  Gaza  escalation  of  November  2012,  both 
sides once again pledged their commitment to reconciliation. 

The lack of respect by the PA for freedom of expression and freedom of assembly was 
a  cause  of  increasing  concern  particularly  in  light  of  the  arrests  of  journalists  and 
bloggers  and  the  violent  suppression  of  peaceful  demonstrations  in  July.  2012  also 
witnessed  an  increase  in  abuses  of  media  freedom  following  a  previous  deterioration 
with  regards  to  online  media  and  the  use  of  social  networks.  This  included  serious 
violations by the security forces, illegal detention, threats, pressure and the prevention of 
printing  and  distribution  of  banned  papers  despite  a  relevant  decision  to  allow  their 
redistribution.  During  one  of  the  PA's  largest  campaigns  against  political  activists  in 
September  -  mainly  from  the  Hamas  movement  -  a  number  of  journalists  were  among 
more  than  100  people  arrested.  However,  during  the  protests  against  the  austerity 
measures announced by the authorities in September, there were no further attacks by PA 
security  forces  on  journalists  or  demonstrators  in  contrast  to  the  public  attacks  on 
journalists  in  June.  Following  the  Gaza  escalation  in  November  2012,  Fatah  allowed 
Hamas to organise anniversary rallies across the West Bank for the first time since 2007.   
In return, Hamas allowed Fatah to celebrate its 48th anniversary in Gaza. There was no 
progress on the legal framework for the press. 

On a positive note, the PA Cabinet decided in May that security clearance was no longer 
required for public sector jobs. At the EU-PLO Joint Committee in December 2012, the 

5 

 
 
Palestinian side stated that this apply retroactively to dismissed teachers, whose jobs will 
be reinstated. Various violations of freedom of association continued to be reported in 
both  the  West  Bank  and  the  Gaza  Strip.  The  requirement  for  security  clearance  is  still 
being  applied  to  the  registration  of  NGOs  in  violation  of  the  2000  NGO  law.  Rejected 
registrations,  the  forced  election  of  board  members  and  even  the  closure  of  NGOs 
continued  to  be  reported.  Moreover,  court  rulings  ordering  the  re-opening  of  forcibly-
closed  NGOs  were  not  implemented.  The  Presidential  Decree  issued  on  28  April  2011 
requiring the transfer of all assets of dissolved NGOs to the PA, which contravenes the 
NGO Law, remains in force. 

In  Gaza,  violations  of  fundamental  freedoms  by  the  de-facto  authorities  continued.  
Media  freedom  continues  to  deteriorate,  with  journalists  being  attacked  by  security 
forces, severe restrictions on journalists' movements and the Palestinian Journalists' union 
prevented  from  holding  activities.  The  space  for  civil  society  has  also  been  restricted. 
NGOs are requested by the de facto authorities to register and to submit their books for 
auditing. 

Other human rights and governance-related issues 

The PA started the process of developing a National Action Plan for human rights with a 
view to incorporating it into the new Palestinian National Development Plan. 

In the West Bank the de facto moratorium on the death penalty continued. The new draft 
penal code abolishing the death penalty has still not been adopted. In a number of local 
statements,  the  EU  condemned  the  death  sentences  issued  and  carried  out  in  the  Gaza 
Strip. In April, three people were executed. During the Gaza escalation of late 2012, six 
suspected  collaborators  were  summarily  executed  without  any  recourse  to  judicial 
process. 

Concerning the prison system, detention conditions in the West Bank and the Gaza Strip 
continued to be a matter of concern, with the Independent Commission for Human Rights 
(ICHR)  noting  ongoing  serious  violations  of  detainees’  rights  by  security  agencies  and 
patterns of ill-treatment and torture across Palestine. 

Freedom  of  religion,  minority  rights:  Christians  are  well-represented  at  the  political 
level. However, many Christians complain of increasing pressure in Palestinian society to 
accommodate conservative Islamic values, especially in Gaza. 

Youth  and  women's  socio-economic  vulnerability  remains  a  major  challenge  for 
Palestinian  society.  The  latest  survey  by  the  Palestinian  Central  Bureau  of  Statistics 
(PCBS)  on  violence  in  Palestinian  society,  published  in  December  2011,  showed  an 
increase in all types of violence, with worrying rates of domestic violence against women 
(37% of married women were exposed to one form of violence by their husbands; 29.9% 
in the West Bank compared to 51.1% in Gaza Strip). The gap between male and female 
labour  participation  continues  to  be  very  high  (68.9%  against  17.3%)  and  their 
participation in Palestinian political life is still very weak. In order to increase the number 
of  women  candidates,  the  Palestinian  Liberation  Organization  (PLO)  reform  committee 

6 

 
 
agreed in June 2012 that party lists for upcoming Palestinian National Council elections 
must  have  at  least  one  woman  among  the  top  three  candidates.  The  preparation  of  a 
national  information  plan  on  women  rights  was  announced.  The  use  of  children  in  the 
labour market is a concern, with 3.5% of all children aged 10-17 years being employed in 
Palestine (4.9% in the West Bank and 1.4% in Gaza Strip). 

Concerning  LGBT  rights,  Palestinian  law,  based  on  the  1960  Jordanian  penal  code, 
prohibits homosexual activity, although in practice there are no reports of the PA having 
prosecuted  individuals  suspected  of  such  activity.  Societal  discrimination  based  on 
cultural and religious traditions is commonplace. 

On public administration, common areas of concern for the EU and PA continue to be: 
continuing  to  improve  the  legal  framework  for  civil  service  management,  modernising 
the  civil  service  human  resources  management  system,  gender  mainstreaming  in  the 
public administration and improving the capacity of administrative bodies to streamline 
structures and internal work procedures. 

The  Israeli  occupation  continued  to  have  an  adverse  impact  on  freedom  of  religion, 
economic and social rights, children’s rights and property rights. 

Cooperation on foreign and security policy, regional and international issues, 
conflict prevention and crisis management 

In 2012, the EU continued to encourage both the Israelis and the Palestinians to return to 
the negotiating table. However, the Palestinians did not stray from their position that they 
could  only  re-enter  negotiations  if  Israeli  settlement  construction,  including  in  East 
Jerusalem, was frozen, a demand with which Israel did not comply. For most of 2012, no 
major initiative was taken by the parties, or by any other key actor of the peace process, 
to  try  to  re-start  negotiations.  In  the  Foreign  Affairs  Council  conclusions  of  May  and 
December  2012  on  the  Middle  East  Peace  Process  (MEPP),  the  EU  reaffirmed  its 
commitment to a two-state solution and expressed grave concern about developments on 
the ground, which threaten to make a two-state solution impossible. 

In  November  2012,  a  major  escalation  of  violence  between  armed  groups  in  Gaza  and 
Israel took place, leading to the death of more than 160 Palestinians and five Israelis. A 
ceasefire was eventually agreed in indirect negotiations between Israel and the de-facto 
authorities in Gaza, largely thanks to mediation efforts by Egyptian President Mohamed 
Morsi  and  the  United  States.  The  terms  of  the  ceasefire  agreement  call  for  further 
negotiations  aiming  at  opening  the  crossings  into  Gaza.  In  the  Foreign  Affairs  Council 
conclusions  of  December  2012,  the  EU  expressed  its  readiness  to  make  use  of  its 
instruments  in  support  of  the  parties’  efforts,  including  the  possible  reactivation,  in  the 
appropriate way, of the EU Border Assistance Mission in Rafah. 

On 29 November, Palestine was granted non-member observer State status in the United 
Nations,  through  a  vote  in  the  UNGA.  After  this  vote,  Israel  announced  that  it  would 
increase  the  construction  of  settlements  in  the  West  Bank,  in  particular  in  the  so-called 
E1 area and in East Jerusalem and that it would withhold the transfer of Palestinian tax 

7 

 
 
and customs revenues and offset these revenues against Palestinian debts to Israel. This 
Israeli  reaction  was  widely  criticised  by  the  international  community,  including  by  the 
EU. On 10 December, the EU Council adopted Conclusions expressing deep dismay and 
strong  opposition  to  Israeli  plans  for  new  settlement  construction  stating  that  the  EU 
would  closely  monitor  the  situation  and  its  broader  implications,  and  act  accordingly. 
Efforts  are  ongoing  among  key  players  of  the  international  community,  notably  in 
contacts  between  Middle  East  Quartet  members,  to  try  to  move  beyond  the  current 
confrontation  between  the  parties,  to  create  the  conditions  for  a  resumption  of  direct 
negotiations without pre-conditions. 

3.  

ECONOMIC AND SOCIAL REFORM 

Macroeconomic framework and functioning market economy2 

GDP growth in Palestine is expected to have slowed down to 6.2% year-on-year in the 
first  three  quarters  of  2012  from  9.9%  in  2011.  GDP  growth  in  the  West  Bank  slowed 
down to 5.5% in the same period, reflecting slower easing of restrictions and a decline in 
donor aid, which in turn forced the Government to pursue fiscal retrenchment. In Gaza, 
after an average growth rate of 21% in the last two years, growth slowed to 7.7% year-
on-year  in  the  first  three  quarters.  Inflation  reached  2.8%  in  2012,  which  shows  no 
significant difference from the inflation rate in 2011. 

Unemployment is high and rising, up from 20.9% in 2011 to an estimated 22% in 2012. 
Unemployment is largely a consequence of Israeli restrictions in Area C, the closure of 
Gaza,  and  restrictions  on  the  number  of  Palestinians  allowed  working  in  Israel.  East 
Jerusalem, always the hub of Palestinian economic activity is increasingly cut off from its 
natural  hinterland,  thereby  adding  to  the  economic  problems  quite  apart  from  political 
considerations. 

The  fiscal  situation  remains  the  PA’s  main  problem.  Donor  shortfalls  combined  with 
higher-than-expected  expenditure  and  lower-than-expected  revenue  resulted  in  a  large 
financing  gap  in  2012.  This  led  to  growing  debts  to  banks  and  significant  payment 
arrears, including delays in wage payments to public sector employees, triggering mass 
demonstrations  in  September  2012.  The  crisis  was  exacerbated  by  Israel's  actions 
following  Palestine's  successful  bid  for  non-member  Observer  State  status  at  the  UN. 
Israel  did  not  transfer  the  clearance  revenues  it  collects  on  behalf  of  the  PA  using  the 
money to pay off  PA debts to Israeli utilities.   At the same time, the Arab states were 
slow to act on their promise for a USD 100 million a month 'safety net' in response to the 
sanctions.  Clearance  revenue,  collected  by  Israel,  accounts  for  75%  of  the  PA’s  total 
revenue.  The  Fayyad-Steinitz  agreement,  concluded  in  July  2012,  aims  at  enhancing 
collection and minimizing fiscal leakages. Its implementation should be a top priority for 
both  the  PA  and  Israel.  The  EU  is  the  largest  contributor  to  the  PA’s  recurrent 
expenditure channelled through the PEGASE mechanism. 

2 Figures on GDP, inflation, trade and employment are generally from Eurostat based on data supplied by 
the national statistical offices; or IMF or Commission Staff estimates, as indicated in the Statistical Annex. 
When other data sources are used these are then indicated. 

8 

 
 
                                                 
The trade deficit  amounted  to  45%  of  GDP  in  2011  and is  expected  to remain high at 
40% of GDP in 2012. It is only partly mitigated by positive net transfers and translates 
into a current account deficit equal to 36.7% of GDP in 2011 and an expected 30.7% of 
GDP  for  2012  (excluding  official  transfers;  19.7%  when  included).  Official  reserves, 
though  improving  in  the  first  eight  months  of  2012,  cover  less  than  two  months  of 
imports. 

The overall unemployment rate is expected to be at 22%, with a higher rate in the Gaza 
Strip  than  in  the  West  Bank.  To  help  boost  employment,  a  technical-vocational 
education  and  training  strategy  and  a  one-stop-shop  system  of  employment  services  at 
local  level  were  developed.  A  labour  market  information  system  was  put  in  place  to 
match  labour  market  demand  and  supply.  The  development  of  a  Palestinian  jobs 
classification  and  qualifications  system  was  launched.  An  Employment  and  Social 
Protection Fund was established but remained underfunded. 

The  national  cash  transfer  programme  (CTP),  administered  by  the  Ministry  of  Social 
Affairs (MoSA), remained the most substantive component of existing social assistance 
schemes  in  the  West  Bank  and  Gaza.  In  2012,  over  97,000  households  received 
assistance  under  the  programme,  of  which  half  were  in  Gaza.  The  annual  CTP  budget 
was around EUR 85.5 million, and was funded by the EU (EUR 40.85 million just under 
47.8% of the total budget, earmarked for support to families living in extreme poverty), 
the  PA  (48.4%)  and  the  World  Bank  (3.8%).    A  national  exercise  to  map  pockets  of 
poverty in the West Bank and Gaza has started in close cooperation with the PCBS with 
the support of the World Bank. 

Progress  was  achieved  in  facilitating  coherence  and  convergence  in  the  targeting  and 
delivery  of  social  services.  In  addition  to  cash,  other  types  of  assistance  were  also 
provided on the basis of CTP targeting, i.e. food, health and education services. Findings 
of a targeting assessment of the CTP undertaken by the World Bank in July also fed into 
discussions  that  should  lead  to  the  formulation  of  a  medium  term  social  assistance 
strategy. This strategy should pave the way for a modern and diversified social assistance 
system, nested within a comprehensive social protection strategy that would also include 
social insurance. A National Committee led by the MoSA was established at the level of 
the  Council  of  Ministers  to  look  into  the  latter.  A  number  of  action  plans  relating  to 
disability,  juvenile  justice  and  child  protection  were  developed  and  implemented.  A 
cross-sectoral  Social  Protection  Sector  Strategy  Action  Plan  (2011-2013)  was  also 
adopted.  

Support  for  the  institutional  capacity  building  in  the  MoSA  continued  to  be  provided 
through EU-funded technical assistance (EUR 2.2 million). This capacity-building work 
should  continue  with  follow-up  assistance  focusing  on  (i)  strengthening  the  capacity  of 
the PA to design, manage, monitor and evaluate social protection strategies and policies;  
(ii) developing the capacity of the MoSA to plan, manage, deliver and monitor services 
with  increased  community  and  private  sector  involvement;  and  (iii)  improving  the 
functioning of the MoSA at central and local levels. 

9 

 
 
 
4.  

 TRADE RELATED ISSUES, MARKET AND REGULATORY REFORM 

The  oPt  remained  the  smallest  trading  partner  for  the  EU  in  the  Euro-Mediterranean 
region.  Bilateral  trade  flows  slightly  increased  and  during  the  first  eleven  months  of 
2012  amounted  to  EUR  106  million.  EU  exports  to  oPt  consisted  mainly  of  machinery 
and transport equipment. EU imports from oPt remained extremely small and consisted 
mainly of  agricultural and processed  agricultural products. One of the main reasons for 
this  underperformance  continues  to  be  the  Israeli-imposed  ‘closure  system’.  The  US-
brokered  Israel-PA  Agreement  on  Movement  and  Access  signed  in  2005  has  not  been 
fully implemented. The border crossing regime has become a major factor contributing to 
the Palestinian economic crisis. 

The  Agreement  between  the  EU  and  the  PA  on  further  liberalisation  of  trade  in 
agriculture, processed agricultural products, and fish and fisheries products entered into 
force in January 2012. 

Palestinian customs continued to use the automated system for customs data ASYCUDA, 
which now allows data to be retrieved from the Israeli declarations. With EU backing, the 
PA continued its efforts to become an observer at the World Customs Organisation. The 
PA  was  in  the  process  of  adopting  pan-Euro-Med  protocols  on  rules  of  origin  with  the 
EFTA States and Turkey. Once completed, this will allow diagonal cumulation of origin 
between  all  these  parties  and  the  EU.  The  PA  has  yet  to  sign  and  ratify  the  regional 
Convention  on  pan-Euro-Mediterranean  preferential  rules  of  origin.  PA  participation  in 
the work of the Pan-Euro-Med Working Group should be strengthened. 

Regarding sanitary and phyto-sanitary (SPS) issues, a food safety strategy and a food 
safety law remained in preparation. Some laboratories were strengthened. Various gaps in 
legislation  and  institutional  capacity  (administration,  training  for  farmers  and  business 
operators, 
in  a 
Commission/European Food Safety Agency/TAIEX supported Mediterranean seminar on 
animal identification and disease control measures that was held in Cyprus in September. 

to  be  addressed.  The  PA  participated 

infrastructure)  remain 

In the area of free movement of goods and technical regulations, the PA started work 
on  the  Agreement  on  Conformity  Assessment  and  Acceptance  (ACAA)  of  Industrial 
Products, with two priority sectors: construction (stone and marble) and pharmaceutical 
products. The PA needs to revamp its regulatory framework to be ready to conclude this 
Agreement.  The  European  Commission  invited  the  PA  to  submit  legislative  texts  in 
priority sectors for comments, and to set up an independent accreditation body. However, 
progress in this area was hampered by the absence of a medium term strategy for quality 
infrastructure. The Palestinian Standards Institute (PSI) needs to be strengthened with a 
view to ensuring consumer protection and improving the competitiveness of Palestinian 
products. 

The  business  climate  continues  to  be  hampered  by  the  restrictions  on  movement  and 
access imposed by Israel on both the West Bank and Gaza. These measures restrict the 
movement  of  goods  and  people  both  within  and  across  borders,  thereby  increasing 
transaction costs, affecting business competitiveness and strongly discouraging domestic 

10 

 
 
and  foreign  investment.  This  is  more  acute  with  regard  to  the  substantial  potential  for 
private sector development in Area C, as it holds the majority of the West Bank’s water 
reserves, agricultural land and natural resources. Compared to the previous year, the West 
Bank  and  Gaza  remained  in  135th  place3  (out  of  185)  in  the  ease  of  doing  business 
ranking in the World Bank’s ‘Doing Business 2013’ annual report. 

In the area of financial services, the banking sector remained stable and credit conditions 
improved. The share of non-performing loans decreased from 8 % in late 2008 to about 
3 % in June 2012. The Palestinian Monetary Authority continued to progress towards the 
implementation of Basel II/III standards and worked with commercial banks’ stress tests 
in line with these principles. 

Other key areas 

In  the  area  of  taxation,  the  PA  implemented  measures  aiming  at  reinforcing  its  tax 
administration,  expanding  the  tax  base,  and  improving  compliance.  Regarding  income 
tax,  the  PA  increased  the  top  corporate  tax  rate  from  15%  to  20%,  and  implemented 
measures  to  improve  compliance,  starting  with  the  large  taxpayers.  Income  tax 
exemptions  for  13  large  companies  were  suspended  for  two  years.  The  VAT  rate  was 
increased  from  14.5 %  to  15 %  and  measures  improving  compliance  were  under 
consideration. In July, the PA and the Government of Israel reached an understanding on 
a  set  of  measures  aiming  at  enhancing  the  mechanisms  through  which  Israel  collects 
certain  customs  and  taxation  revenues  on  behalf  of  the  Palestinian  Authority.  The 
implementation  of  these  measures  could  potentially  significantly  increase  PA  revenues 
over time. 

The PA prepared a draft law on intellectual property rights (IPR). It is expected that its 
adoption will improve investment climate due to higher level of IPR protection. 

In  the  area  of  public  procurement,  the  PA  prepared  measures  to  implement  the  2011 
law. 

A  light  peer  review  of  the  Palestinian  Central  Bureau  of Statistics  (PCBS)  was  carried 
out in February and recommendations for improvement were being addressed. The PCBS 
successfully  joined  the  IMF-based  Special  Data  Dissemination  Standard  (SDDS).  The 
final  results  of  the  2007  Population  and  Housing  Census  for  the  Gaza  Strip  were 
published, and data on disability were collected in the Gaza Strip. Final results of the first 
Agricultural Census in 2010 were made available and the first census of businesses was 
conducted. 

The enterprise policy of the PA concentrated on financial assistance to businesses that 
need  to  restore  production  machinery,  office  equipment  and  rebuild  facilities  and  other 
business  premises  damaged  or  destroyed  by  the  conflict,  with  substantial  support  from 
international  donors,  including  the  EU.  The  PA  continued  to  contribute  to  the  Euro-

3  Comparison  was  made  with  the  ‘Doing  Business  2012’  ranking,  which  was  adjusted  for  changes  in 
methodology  and  any 
see 
http://www.doingbusiness.org. 

to  corrections.  For  more 

revision  of  data  due 

information, 

11 

 
 
                                                 
Mediterranean  industrial  cooperation  and  shared  knowledge,  tools  and  good  practice  in 
areas covered by the Euro-Mediterranean Charter for Enterprise and in specific sectors: 
textiles and clothing, tourism, raw materials and space. 

The  financial  statement  for  2009  was  audited  in  late  2011  and  the  audit  of  the  2010 
financial  statement  was  expected  to  be  finalised  in  late  2012.  The  State  Audit  and 
Administrative  Control  Bureau  (SAACB)  is  finalising  a  new  draft  external  audit  law. 
Since 2010, the SAACB has received technical assistance from the EU under a three-year 
project  aiming  at  supporting  its  efforts  to  become  an  independent  supreme  audit 
institution  in  line  with  INTOSAI  (International  Organisation  of  Supreme  Audit 
Institutions) standards. 

As part of the process of stepping up internal auditing and progressively decentralising 
it  to  line  ministries,  an  Internal  Audit  Centralisation  Harmonisation  Unit  was  set  up  in 
July in the Ministry of Finance to ensure further development of internal audit.  The EU 
supports this reform by providing technical assistance. 

In  the  area  of  company  law,  a  law  on  debt  resolution  and  bankruptcy  was  drafted  to 
protect both lenders and borrowers, thus improving the problematic access to finance for 
SMEs. 

No significant developments can be reported in the area of movements of capital. 

5.  

COOPERATION ON JUSTICE, FREEDOM AND SECURITY 

During  the  reporting  period,  no  major  progress  was  made  on  reform  of  the  security 
sector,  except  to  some  extent  for  the  Palestinian  Civil  Police  (PCP).  The  quality  of 
dialogue with the Ministry of Interior (MoI) has not improved, especially in the light of 
increased  concerns  about  human  rights  abuses,  the  lack  of  a  proper  delineation  of 
responsibilities between the different security forces and practices of the security forces 
that are far from internationally accepted practices (see Chapter 2). Donors demand more 
relevant feedback on the updated priorities of the security sector  strategy and reiterated 
the need to evaluate the skills and competences of the security forces, the efficiency of 
the  training  provided  and  the  availability  of  equipment  and  logistical  requirements, 
framed  within  the  financial  crisis  and  the  need  for  sustainable  development.  There  is  a 
need for a better monitoring and evaluation system and better reporting from donors and 
implementers with the MoI, and a need for the Palestinian counterparts to provide donors 
with  clear  information  on  their  capacity  for  direct  implementation  of  development 
programs through PA systems. One of the priorities identified in the Palestinian National 
Development  Plan  2011-2013  involves  strengthening  the  transparency  and  public 
accountability of the security services in order to build strong community relations with 
citizens and to ensure protection of human rights. As regards accountability and civilian 
oversight,  the  UN  Development  Programme,  with  the  EU  Coordination  Office  for 
Palestinian  Police  Support  (EUPOL  COPPS),  launched  a  Joint  Programme  Ensuring 
police internal accountability, enhancing national anti-corruption efforts, promoting civil 
society  oversight.  Within  this  framework,  an  accountability  strategy  including  a  PCP 

12 

 
 
complaints and oversight mechanism is being developed with the full support of the PCP. 
EUREP is finalising ta two-year programme with the Geneva Centre for the Democratic 
Control of Armed Forces. 

Concerning the operational success of the security sector, some progress has been done. 
The  MoI  has  presented  some  figures  using  indicators  derived  from  the  records  of  the 
security institutions, showing a decrease in crime rates in Palestine in 2011. However, the 
occupation continues to have a serious impact and weakens the security forces' capacity 
to  deal  with  incidents  and  crimes  professionally  and  effectively.  One  positive 
development was the opening in July of the Palestinian College for Police and Sciences 
(PCPS) which should ensure a more ethical, standardised and consistent training basis for 
the entire PCP. The PCP’s readiness to engage with EUPOL COPPS and donors to roll 
out capacity building  to  the  districts is another step forward as  is the development of a 
family protection unit focusing on domestic and gender-based violence. 

the 

technical  equipment  (in  particular 

With  regards  to  the  justice  sector,  the  three  main  justice  institutions,  the  Ministry  of 
Justice (MoJ), the High Judicial Council (HJC) and the Attorney General's Office (AGO) 
continued  to  develop.  The  following  important  achievements  took  place:  modernisation 
of parts of the court infrastructure and the MoJ’s judicial record premises, modernisation 
of 
technology)  and  further 
improvement of professional capacity through numerous trainings events for judges and 
prosecutors.  Awareness  of  gender-related  issues  in  the  justice  sector  has  improved: 
Gender indicators were introduced to evaluate the performance of judicial institutions in 
co-operation  with  the  PCBS  and  the  MoJ  is  working  on  a  gender  strategy.  A  new 
organisational structure for the AGO was adopted in early 2012 with the support of the 
MoJ. Finally, several institutions signed MoUs for use of the electronic case-management 
software  MIZAN  II  linking  between  the  institutions  to  provide  more  effective  case 
management; MIZAN II will also be made available also to religious courts. 

information 

Despite  these  improvements,  further  challenges  remain  and  actions  need  to  be  taken 
especially  in  the  following  areas:  coordination  among  the  different  institutions: 
clarification  of  roles  and  responsibilities,  harmonising,  updating  and  developing 
legislation  (and  drafting  legislative  plan  clearly  setting  out  roles,  responsibilities  and 
timelines),  developing  a  comprehensive  system  for  mapping  and  inspecting  of  prisons 
and  detention  facilities  enabling  security  forces  to  comply  with  judicial  decisions, 
consolidating the decision of January 2011 ending the practice of prosecuting civilians in 
military courts; ensuring that human rights, as enshrined in the Basic Law, are to the fore 
in  PA  institutions  and  judicial  institutions;  reforming  the  Palestinian  Judicial  Training 
Institute,  setting  up  a  comprehensive  legal  aid  system;  and  developing  a  credible 
monitoring  and  evaluation  (M&E)  system.  Other  challenges  include:  the  case  backlog 
before  the  courts,  the  quality  of  judgments,  the  independence  of  judges,  transparent 
recruitment and promotions for judges and prosecutors, restructuring of the prosecution, 
co-operation  mechanisms  between  the  police  and  prosecutors  in  investigations,  non-
implementation  of  court  decisions  especially  by  the  executive  including  Palestinian 
security forces, improvement of the juvenile justice system and the division of the justice 
systems in the West Bank and the Gaza Strip. 

13 

 
 
With  the  appointment  as  Minister  of  Justice  of  Mr  Ali  Muhanna,  former  chair  of  the 
Board of the Palestinian Bar Association, new dynamics developed in the justice sector. 
The new minister concurred with the deficits in the justice sector listed above promised 
action.  He  set  the  following  priorities:  establishment  of  a  Higher  Council  for  Justice 
mandated to lay out and design justice policies and a more coherent and comprehensive 
strategy  for  regulating  and  bringing  together  all  justice  institutions;  updating  and 
developing  legislation;  taking  the  executive  steps  necessary  to  create  a  constitutional 
court; reform of administrative procedure law; reform of the Palestinian Judicial Institute; 
and engendering the sector. In September, the Ministry set out reform proposals, some of 
which  stirred  controversy,  such  as  adding  Attorney  General  functions  to  the  minister's 
mandate  and  curtailing  the  mandate  of  the  High  Judicial  Council.  Donors  and  civil 
society  have  requested  a  thorough  discussion  of  the  reform  agenda,  expected  to  be  a 
major topic of dialogue with the MoJ in 2013. 

A UNDP-commissioned a survey has provided an overall picture of how the Palestinian 
people  perceive  their  justice  and  security  institutions.  The  findings  suggest  that 
investments  in  justice  and  security  institutions  are  paying  dividends.  Palestinians 
throughout  Palestine  consider  that  rule-of-law  institutions  and  the  lawyers  and  civil 
society organisations (CSOs) that support their work, play a pivotal role in promoting and 
protecting  the  rule  of  law,  and  are  legitimate.  However  they  are  more  satisfied  with 
justice and security institutions’ technical performance (e.g. the number of judges; court 
signposting;  lawyers’  qualifications)  than  their  integrity  (‘independence’;  ‘honesty’; 
fairness of verdicts’). 

6.  

TRANSPORT,  ENERGY,  ENVIRONMENT,  THE  INFORMATION  SOCIETY,  RESEARCH 
AND INNOVATION 

The transport sector remains a vital recovery tool for the Palestinian economy. The PA 
continued  with  restructuring  the  public  passenger  transport  sector.  The  European 
Investment  Bank  agreed,  under  the  Facility  for  Euro-Mediterranean  Investment  and 
Partnership (FEMIP), to co-finance Palestine’s Roads and Transport Master Plan (EUR 2 
million).  Once  approved  by  the  PA,  the  master  plan  will  provide  a  framework  for 
government policy and actions in the transport  sector. It  will  ultimately provide a basis 
for  a  comprehensive  National  Spatial  Plan,  which  will  include  other  areas  such  as 
agriculture,  energy,  environmental  protection  and  housing.  At  regional  level,  the  PA 
actively  participated  in  Euro-Mediterranean  transport  dialogue  and  technical  assistance 
programmes. 

Regarding energy, the PA pursued electricity sector reform, with EU assistance aimed at 
reducing  net  lending.  In  August,  the  Electricity  Regulatory  Council  (PERC),  after  the 
first  ever  public  hearing,  published  new  electricity  tariffs  enabling  cost  recovery.  They 
take  account  of  vulnerable  consumers  and  differ  according  to  consumer  sectors.  PERC 
was  preparing,  inter  alia,  distribution  and  grid  codes.  The  PA  further  developed  and 
upgraded  its  electricity  transmission  and  distribution  infrastructure  and  continued 
preparations toward a new power plant in the West Bank. The programme to install pre-
paid electricity meters in the West Bank and Gaza was further implemented.  In March, 

14 

 
 
the  PA  adopted  its  Energy  Efficiency  Plan  and  Renewable  Energy  Strategy,  which 
includes the Palestinian Solar Initiative. It continued to implement projects in these areas 
including  the  completion  of  a  first  solar  generation  facility  in  Jericho.  The  EU  remains 
committed to re-launching trilateral energy cooperation with the PA and Israel. 

Regarding climate change, the PA assessed the option of becoming a full member of the 
United Nations Framework Convention on Climate Change in the light of the experience 
and  consequences  of  full  UNESCO  membership.  The  PA  set  up  an  inter-ministerial 
national  committee  for  climate  change.  The  newly  created  Ministry  of  Environmental 
Affairs  prepared  a  climate  change  adaptation  strategy.  Regional  cooperation  on  climate 
change related water availability is continuing with the water authorities of Israel, the PA 
and Jordan. 

As regards the environment, the Environment Quality Authority became the Ministry of 
Environment, represented in the Cabinet of Ministers. The ministry is still  hampered in 
its  operations  by  the  continued  closure  of  its  offices  in  the  Gaza  Strip.  The  ministry 
finalised  an  action  plan  to  implement  the  2011  environmental  strategy.  To  implement 
environmental law, 30 judicial officers were appointed in cooperation with the Attorney 
General. 

The  Palestinian  Water  Authority  prepared  policies,  strategies  and  master  plans  for 
conducting reform and meeting needs in the water and sanitation sector. Construction of 
large-scale  wastewater  treatment  plants  continued  in  Nablus  West,  Sheikh  Aijleen 
(Central Gaza) and Northern Gaza (NGEST). Significant Israeli restrictions apply to the 
Gaza  projects  where  the  most  basic  equipment  is  allowed  only  after  extensive  donors’ 
interventions at a high level. 

The PA actively participated in ENPI-financed regional projects namely, the Sustainable 
Water Integrated Management (SWIM) project and those falling under the Horizon 2020 
depollution  initiative  (the  Mediterranean  Environment  Programme  and  the  Shared 
Environmental  Information  System  support  project  led  by  the  European  Environment 
Agency). 

The PA actively  participated  in  the Integrated Maritime Policy (IMP-MED) technical 
assistance project under the ENPI South programme. 

In the area of civil protection, the flagship programme for Prevention of, Preparedness 
for,  and  Response  to  natural  and  man-made  disasters  (PPRD  South)  contributed  to  the 
establishment  of  a  regional  framework  of  disaster  management  authorities  that  could 
intervene  collectively  in  the  event  of  disasters  overwhelming  the  affected  country. 
Indeed, sustainable development requires adequate disaster risk reduction efforts. The PA 
is among the 168 governments that adopted in 2005 the "Hyogo Framework for Action: 
Building the Resilience of Nations and Communities to Disasters", which emphasizes the 
central  role  of  disaster  risk  reduction  for  all  development  policies.  However,  work  on 
Disaster Risk Reduction (DRR) and climate adaptation is only at the beginning and it will 
require considerable further support to develop capacities and processes. DRR policy is 
fostering dialogue with Civil Society and NGOs, thus contributing to a more sustainable 

15 

 
 
democracy. Analysis of the regulatory and institutional frameworks started with the aim 
of strengthening capabilities and inter-ministerial coordination in the second phase of the 
programme. 

On  the  regulatory  framework  for  electronic  communications,  and  in  particular  the 
telecoms  act,  there  was  very  little  progress.  Dialogue  started  with  the  Ministry  of 
Telecommunications  and  Information  Technology  (MTIT)  on  the  appointment  of  the 
regulatory board, but no significant progress was achieved. The licensing framework was 
under revision with a view to introducing class licensing, but due to the restriction of civil 
works,  building  infrastructure  in  area  C  and  limitations  on  spectrum  released  by  Israel, 
there is no real value in issuing more licences. Progress in the ICT sector included new 
competition guidelines, a Long Run Incremental Cost (LRIC) model, four new broadband 
licences,  more  transparency  in  consultation  procedures  with  stakeholders,  and  capacity 
building.  On  audiovisual  policy,  the  draft  of  the  broadcasting  law  addressing  certain 
restrictions on media freedom has yet to be adopted. 

Palestinian  entities  showed  increasing  interest  in  participating  in  the  EU  research  and 
innovation programmes. In 2012, 18 projects under the Seventh Framework Programme 
for Research and Technological Development (FP7) had 17 partners from Palestine. The 
majority  of  the  organisations  funded  were  research  institutes  and  higher  education 
institutions. The total EU contribution was EUR 38 million, of which more than EUR 2 
million  went  to  the  Palestinian  participating  entities.  Palestine  participated  actively  in 
FP7  cooperation  and  capacities-specific  programmes  on  the  environment,  health,  social 
and economic sciences and humanities, information and communication technology, and 
international  cooperation  activities.  Palestine  collaborated  mainly  with  Italy,  Germany, 
Spain, the UK and France. 

7. 

 PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH 

In  May,  the  Ministry  of  Education  and  Higher  Education  (MoEHE)  was  split  into  two 
separate ministries. Under the Joint Financing Agreement (the basket funding mechanism 
established  in  2011,  to  which  a  number  of  EU  Member  States  contribute),  a  second 
Education  Sector  Annual  Review  (ASR)  was  carried  out  in  June,  focusing  on  teacher 
education  and curriculum development.  Good  progress  was  made on teacher education, 
while  further  work  is  needed  on  curriculum  development.  The  ASR  also  provided  a 
forum for initial discussions on the design of the third Education Development Strategic 
Plan which will cover six years from 2014 to 2019. 

The  education  sector  faced  very  distinct  challenges  in  different  geographical  areas  of 
Palestine. In the Gaza Strip, one of the main challenges was to provide sufficient physical 
space for the rapidly growing number of school children, in both the public and UNRWA 
system.  In  East  Jerusalem,  the  main  problems  were  the  high  dropout  rate,  lack  of 
infrastructure, lack of policy influence and quality of education. There have been claims 
of Israeli interference regarding textbooks affecting schools in East Jerusalem.   

16 

 
 
Regarding technical and vocational education and training (TVET), the enrolment rate 
remained low in comparison with higher education, due partly to the negative perception 
of  VET  among  Palestinian  people.  The  implementation  of  the  National  TVET  Strategy 
continued at a good pace, consistent with the employment strategy. The splitting of the 
former  MoEHE  is  expected  to  affect  the  implementation  of  the  TVET  strategy;  in  line 
with  the  strategy,  donors  therefore  advocated  the  creation  of  a  TVET  High  Council. 
TVET  coordination  is  also  missing  in  the  donor  coordination  structure.  An  informal 
working  group  was  created  by  the  donors  led  by  GIZ  as  an  information-sharing 
mechanism. 

At higher education level, insufficient funding continued to be a major concern, having 
a  serious  negative  impact  on  the  quality  and  relevance  of  higher  education.  Palestinian 
institutions  were  very  active  in  the  Tempus  IV  programme’s  fifth  call  for  proposals, 
which attracted the highest number of project applications since 2008. Four new projects 
involving Palestinian institutions, two of which are led by Palestinian Universities, were 
selected. The Tempus programme contributed to overcoming the fragmentation between 
the Palestinian institutions themselves, creating a good inter-university network. Tempus 
was also seen as a very good opportunity to overcome the difficult regional context, as it 
provides higher institutions with an opening to international networks and the opportunity 
to  modernise  curricula  and  the  quality  of  teaching.  However,  due  to  diminished 
cooperation from the Ministry of Higher Education during the second semester of 2012, 
there was no Palestinian participation in regional meetings of policy-makers and Higher 
Education  Reform  Experts  (HEREs).  Under  Erasmus  Mundus,  154  new  learning 
mobility  grants,  organized  within  a  university  consortium,  were  offered  to  Palestinian 
students,  together  with  one  scholarship  for  a  joint  masters  course.  Palestinian 
involvement  in  other  EU  global  programmes  such  as  Jean  Monnet,  and  Marie  Curie 
should be enhanced, with only one Jean Monnet project was selected in 2012, and only 
two  Palestinian  researchers  and  three  research  institutions  have  benefited  from  Marie 
Curie actions since 2007. 

With regards to youth, unemployment and employability are two of the main challenges 
faced by the PA. The Palestinian Higher Council of Youth and Sports, which replaced the 
Ministry  of  Youth  and  Sports,  was  placed  under  the  Office  of  the  PLO  President. 
Palestinian  youth  and  youth  organisations  continued  benefitting  from  the  opportunities 
offered  by  the  Youth  in  Action  Programme.  309  young  people  and  youth  workers 
participated in the 70 projects selected in 2012. 

The  PA  continued  to  implement  its  health  strategy  2011-13.  The  new  health  minister 
announced a reorientation of the reforms, focusing on emergency services, strengthening 
the  primary  health  care  system,  reorganising  the  hospitals,  increasing  efficiency  and 
transparency of health sector governance, upgrading human resources capacities, tackling 
mental  health  and  addressing  shortages  of  pharmaceuticals.  Improving  the  quality  of 
health  services  and  satisfaction  with  the  services  will  be  a  main  focus  in  the  medium 
term. The recent conflict in Gaza severely affected the health system and exacerbated the 
need to provide stocks of essential drugs to health services in Gaza. 

17 

 
 
A lack of resources to cover the cost of drugs and referrals of patients to external health 
care  providers,  such  as  the  East  Jerusalem  hospitals,  remained  a  challenge.  Health 
cooperation  between  West  Bank  and  Gaza  remained  limited.  The  PA  continued  to 
participate  in  the  EU  supported  ‘Episouth  Plus’  project  aimed  at  increasing  health 
security  in  the  Mediterranean  region  and  South  East  Europe.  The  PA  participated  in  a 
Commission/  European  Centre  for  Disease  Prevention  and  Control  conference  and 
training  course  aiming  to  strengthen  capacity  building  for  communicable  disease 
prevention and control in the Mediterranean. The aim is to jointly explore the scope for 
developing a regional training programme on intervention epidemiology. 

18