U.S. Aid to Palestinians to Increase in FY2000

Introduction

Following the September 1993 signing of the "Declaration of Principles on Interim Self-Governing Arrangements" (DOP) by the Palestinian Liberation Organization (PLO) and the Government of Israel, the U.S. Government committed to provide $500 million over a 5-year period (FY 1994-FY 1998) for a program of assistance to the Palestinian people. Of this total, USAID was charged with administering $375 million; the remainder was to have been provided through the Overseas Private Investment Corporation. USAID's $75 million annual budget was maintained through FY 1999 and is expected to increase to $100 million in FY 2000. USAID assistance coincides with an interim, transitional period of expanding Palestinian self-governance (through the Palestinian Authority) as well as steps toward and negotiations on a final status agreement between the Palestinians and Israelis. Progress toward a final status agreement has been slow and difficult. The U.S. Government, acting within its role as the primary facilitator for the overall Middle East Peace Process, has been actively engaged in defusing tensions and seeking compromises that are acceptable to both parties. USAID assistance to promote Palestinian development, an essential element of U.S. foreign policy, supports U.S. interests in promoting regional stability, economic prosperity and adherence to democratic principles.

The Development Challenge

The USAID West Bank and Gaza program responds to the economic and political challenges posed by the Palestinian-Israeli peace process, and is designed to promote long-term, sustainable development. Some of the basic development constraints in the West Bank and Gaza include: deteriorated infrastructure; outdated or unfinished legal, regulatory and institutional frameworks; limited natural resources; a shortage of basic public services; and a rapidly expanding population. Another especially problematic factor is that the movement of goods and people between the West Bank, Gaza and Israel has been subject to severe restrictions. This inhibits investment and hinders economic growth and job creation. Income levels have trended downward in recent years. In response to these challenges, since FY 1996 USAID resources have been concentrated in three strategic areas related to private sector growth, water resources, and democracy/governance. In addition, in FY 1999 - FY 2000, USAID will add activities in two areas of special concern, maternal/child health and community services.

Mission Strategic Objective #1: Expanded Economic Opportunities. According to analyses conducted by the United Nations, real per capita GNP in the West Bank and Gaza fell from approximately $2,500 in 1992 to approximately $1,600 in 1998. Both unemployment and poverty indices approach 20% in the West Bank and higher still in Gaza. Among other factors, this reflects the impact of the reduced employment opportunities for Palestinians due to restrictions on transit to Israel and systemic weakness in the West Bank and Gaza, such as insufficient credit, a shortage of technical and managerial skills and an inadequate legal and regulatory framework. USAID programs address the important systemic constraints to private sector growth, specifically by expanding access to credit and training, by expanding export market access and local market share of Palestinian firms, and by supporting the development of a transparent and comprehensive regulatory framework conducive to investment.

Mission Strategic Objective #2: Increased Access to and More Efficient Use of Scarce Water Resources. Economically and developmentally sound water access and management practices are essential to sustainable economic growth. However, water is a constraint in West Bank and Gaza. Water consumption rates are well below the World Health Organization's minimum standard. The inadequate supply of water is a limitation for both agricultural and industrial development. Minimal sewage networks connect to only 25% of households. In response to commitments in the 1995 Palestinian-Israeli Interim Agreement that assure Palestinians an additional 70 million-80 million cubic meters of water per year, the U.S. Government has played an active role as a member of the Trilateral Committee (with the Israelis and Palestinians) in dealing with the political and technical issues related to water. USAID infrastructure and institution-building programs are increasing water supply for Palestinians and improving their management of water resources.

Mission Strategic Objective #3: More Responsive and Accountable Governance. Following the initial establishment of the Palestinian Authority (PA) and the 1996 elections, USAID assisted the Palestinians to focus on further transition towards self-rule through the establishment of democratic checks and balances and the development of accountable and transparent governance. In order to achieve this, the USAID program aims to help develop a vibrant civil society with an active role in the decision-making process and to assist departments of the Palestinian Authority, including the judiciary, develop technical proficiency and institutional stability.

Mission Special Objective #1: Selected Development Needs Addressed

USAID will initiate two new activities under this special objective.

• Community Services Delivered. Inadequate access to basic public services -- along with high unemployment and low income levels -- are factors which lead to despair and frustration in Palestinian communities that can undermine efforts to promote popular support for peace initiatives. USAID will initiate a new activity in FY 1999 to revitalize community-level infrastructure, improve basic services, reach disadvantaged groups, and create short-term jobs. Much of the program will be implemented by U.S. private voluntary organizations (PVOs), where activities will be grassroots-based, designed to meet needs identified by individual communities themselves.

• Maternal-Child Health Care Improvements Demonstrated. The most serious health problems facing mothers and children in the West Bank and Gaza derive from high fertility with short birth intervals, along with weaknesses in clinical and outreach health services. The Mission will finance a pilot maternal-child health activity in FY 1999 and FY 2000 which will expand and improve services to mothers and children in selected areas and provide family planning advice as it relates to these improved services.

The Wye River negotiations, held in October 1998, revived the stalled Palestinian-Israeli peace process. The implementation of the Wye River agreements will require U.S. government support, including an expansion of the USAID development assistance program to the Palestinians. USAID had conducted studies and analyses of the disappointing performance of the Palestinian economy before planning for the Wye River negotiations began. In response to the findings, USAID plans to introduce several new initiatives, including community development and rule of law, to address key constraints to peace and security resulting from the depressed economic and social conditions still affecting Palestinians. In order to maintain the momentum for peace achieved at Wye River, a request for supplemental funding has been submitted by the Administration that describes in detail the proposed uses, timing and budget for this assistance. Some elements of the supplemental funding complement the new initiatives proposed here. However, the additional funding from the supplement is required to respond with adequate and timely support.

Other Donors

At the October 1993 Conference to Support the Middle East Peace Process, donors pledged $2.4 billion in assistance to the Palestinian people. For the 1994-1998 period, total pledges increased to $4.2 billion and total disbursements reached $2.5 billion. An additional $3 billion was pledged by the international community at the start of FY 1999. Taking into account both the political and financial resources dedicated to the Palestinian-Israeli peace process, the U.S. Government, Japan, the European Union, Germany, and Norway are considered the lead donors in the West Bank and Gaza.

FY 2000 Program

In FY 2000, USAID intends to finance: 1) lending for small and microenterprises, technical support to businesses to enhance domestic and export marketing, support for Palestinian business organizations, and policy initiatives to improve the legal and regulatory framework; 2) development of new water supplies for household consumption, testing and improving the quality of potable water, repairing and installing transmission/distribution and waste/storm water systems, and promotion of more efficient allocation of all water resources (potable and non-potable) for domestic and commercial uses; 3) enhancement of citizens' capacity to participate in and influence the governing process through support for local civil society organizations, and development of the ability of the public sector (the legislature, judiciary and local government entities) to better meet the needs of Palestinians in a transparent and efficient manner; 4) grants to support non-governmental (NGO) programs which will respond directly to a range of priority service needs as defined by Palestinian communities; and 5) improvements in maternal child health care services through NGO clinics and associated operations research.

ACTIVITY DATA SHEET

Summary: The Palestinian economy is characterized by fluctuating levels of high unemployment and under-employment; limited access to labor markets in Israel and unreliable passage for manufactured inputs and final products, especially in times of border closures; low productivity; constraints to credit, particularly for microenterprises; and an undefined legal and regulatory framework that undermines investor confidence. USAID's program addresses these issues, focusing on the private sector as the key to long-term stability and growth in the West Bank and Gaza.

In FY 1994, USAID began activities to address some of these constraints by developing the skills of small entrepreneurs through training and technical assistance and by generating emergency employment opportunities--especially in Gaza--through infrastructure projects. Since FY 1996, USAID has supported a comprehensive program to develop the Palestinian private sector, including initiatives to expand the financial services available to small and micro-enterprises, increase the industrial sector's market penetration, enhance the productivity of the industrial sector, and improve the legal and regulatory environment for private sector growth. The primary beneficiaries of these activities are the majority of Palestinians working in micro, small and medium-sized firms. More specifically, it is estimated that 30,000 microenterprises are eligible for loans through USAID-assisted programs, either through U.S. PVOs or the formal financial sector. Approximately 22,000 jobs will be created at the pilot Gaza Industrial Estate and up to 40,000 jobs in feeder industries. The development of an appropriate legal framework, and the necessary regulatory institutions to accompany it, will promote commercial transparency and have a broad impact on the Palestinian economy.

Key Results: USAID’s private sector program aims to achieve the following results: (1) Increased Access to Financial Services: USAID has financed more than 13,500 micro-loans (valued at $4 million) through UN and PVO intermediaries. A parallel micro-finance activity, which works through commercial banks, began in FY 1998. Within its first six months of operation, the banks provided $1 million of their own funds in loan capital to microborrowers. This activity is being expanded geographically from four bank branches to six. (2) Increased Access to Markets by the Industrial Sector: USAID has assisted Palestinian firms to access foreign and domestic markets by improving marketing practices, management and productivity. The third annual Palestinian Food Day, supported by USAID, attracted buyers from Jordan and Israel, and generated more than $8 million in initial sales, with many additional agreements in process. In FY 1998, USAID provided start-up funding to a new overarching trade organization of Palestinian businesses which has wide support and coordinates overall Palestinian private sector trade advocacy efforts. In addition, USAID technical assistance and infrastructure financing have made it possible to establish a pilot border industrial estate in Gaza which will provide greater access to foreign markets for firms located there. First-phase construction is complete and manufacturing activities are scheduled to begin in the first months of 1999. (3) Enhanced Productivity of the Industrial Sector: To date, USAID has assisted more than 270 Palestinian enterprises to increase productivity and sales and has provided training to upgrade the business skills of 3,000 Palestinian managers. Thirteen leading Palestinian firms have become ISO 9000 (international export standard) certified and others are programmed for certification in 1999. (4) Improved Legal and Regulatory Environment for Private Sector Growth: In FY 1998, USAID provided assistance to develop the commercial legal and regulatory framework in the West Bank and Gaza. Initial assistance has included an analysis of commercial legal and regulatory needs; development of the legal and regulatory framework for industrial zone development and operation; and completion of a draft accounting law consistent with international accounting standards. Support to the Palestinian Monetary Authority, the entity entrusted with commercial bank regulation, began in early FY 1999.

Performance and Prospects: (1) To improve the access of small and microenterprises to financial services, USAID has provided technical assistance to participating banks and funded working capital loans for NGO programs. A formal financial sector micro-credit mechanism began operations in FY 1998 with loan capital of $6 million provided by participating banks and USAID financing covering technical support and a small amount of start-up costs. Loans have averaged $2,000 each. This activity will be expanded in FY 1999 from four branches to five in the West Bank, plus one branch in Gaza. Participating banks will provide an additional $3 million in loan capital to borrowers at the new branches in Gaza and Jenin. USAID’s support for PVO microenterprise programming focuses on poorer segments of the borrower population (generally women) and provides loans ranging between $300 and $1,000. In FY 1999 - FY 2000, a local NGO microenterprise finance institute will receive USAID assistance in order to institutionalize loan delivery and ensure sustainability. (2) To develop new and expanded markets and enhance productivity of Palestinian enterprises, USAID is providing technical assistance and training to Palestinian firms and private sector groups. Palestinian firms obtain support, through a U.S. contractor, to meet export standards and promote Palestinian products. To enhance their productivity, Palestinian enterprises can access specific assistance to upgrade entrepreneurial skills, marketing, and management. A second phase of this assistance, which will focus on building the capacity of industry associations in priority sectors to meet the needs of their membership, will begin in FY 1999. USAID is also supporting industrial development. Assistance to the fledgling Palestinian Industrial and Free Zone Authority is helping build its capacity to promote, regulate, and maintain industrial zones, and studies are underway of the feasibility of new industrial zones in the West Bank and Gaza. (3) To strengthen regulatory capacity, USAID will support the development of internationally recognized private accounting and auditing organizations and establishment of professional licensing requirements. USAID will also help Palestinian Monetary Authority staff to understand and use internationally accepted on-site and off-site bank supervision tools.

Possible Adjustments to Plans: USAID may provide technical assistance, in conjunction with World Bank and International Monetary Fund efforts, to develop certain areas of the banking and securities legal framework. Based on study findings, USAID may develop a project to support an industrial zone on the West Bank.

Other Donor Programs: USAID has been the lead donor in providing private sector support, chairing the related Sectoral Working Group of the Local Aid Coordinating Committee. Between FY 1995 and FY 1998, approximately $89 million was disbursed for private sector projects. In FY 1998, USAID disbursed more than $9 million to support this sector, representing more than 50% of total donor disbursements. The European Union and the United Kingdom have funded programs providing loans to small businesses, excluding microenterprises. Along with USAID, the World Bank is providing assistance for joint Israeli and Palestinian efforts related to industrial zone development, and the International Finance Corporation is providing financing for private sector development of the on-site infrastructure. The World Bank is planning an initiative focused on improving the private sector legal framework and commercial regulations. World Bank activities include comprehensive tracking of the development of all commercial legislation.

Principal Contractors, Grantees, or Agencies: USAID is implementing activities through U.S. firms (Development Alternatives International, The Services Group, Metcalf & Eddy, The Barents Group, and Chemonics), U.S. NGOs (Save the Children Federation and the YMCA), a Palestinian NGO (Paltrade), and the Palestinian private sector.

Selected Performance Measures:

ACTIVITY DATA SHEET

Summary: After the signing of the Interim Accords in September 1995, USAID--in consultation with the Palestinian Water Authority (PWA) and the Palestinian-Israeli Joint Water Committee--developed a comprehensive program of support for the water-related components of those accords. The purpose of USAID’s water resources program is to increase the quantity and improve the quality of water available to Palestinians in the West Bank and Gaza. This includes addressing the related issues of inappropriate waste/stormwater management and inefficient allocation of all water resources (potable and non-potable) between domestic, industrial and agricultural users. While USAID’s program will have positive health and environmental impacts, its rationale derives largely from the constraints on economic development posed by the current water situation. USAID support for the development of wells and transmission/distribution lines has been focused initially in the Bethlehem-Hebron and Jenin areas; financing for waste/stormwater activities has been concentrated in Gaza City. Ongoing and planned water activities will build upon these earlier efforts and enable Palestinians throughout the West Bank and Gaza to better meet their overall water needs in a sustainable manner.

Key Results: USAID’s water resources program aims to achieve the following results: (1) Increased Water Supply: Initial activities in the West Bank have resulted in the upgrading/installation of water networks in 29 villages and towns with a total population of approximately 110,000. In addition, coordinated USAID- and Italian-funded activities to rehabilitate the distribution system covering approximately 80% of the City of Hebron (130,000 residents) are nearly complete. Preliminary data from these project areas indicate that per capita consumption has increased from approximately 41 liters/day to 63 liters/day in the villages and from 45 liters/day to 50 liters/day in Hebron, and losses have been cut by approximately 10%-15%. (2) Integrated Management of Water Resources: Under the now-completed emergency phase of USAID's waste/stormwater initiative in Gaza City, approximately 50 kilometers of sewer lines and stormwater culverts have been cleaned, repaired or replaced, a critical pump station/reservoir renovated, a central drainage area dredged, and municipal capacity to maintain the system improved. In addition, residents in four neighborhoods are seeing the benefits of a program of water infrastructure upgrades and community health education. These interventions have directly assisted about 80,000 residents of Gaza City. Project areas are no longer subjected to flooding and sewage overflow, wastewater and stormwater have been separated, and raw sewage is no longer discharged onto the beach. Also completed with USAID funding is a waste/stormwater facilities master plan for Gaza City, which is serving as the basis for USAID and other donor support for a comprehensive construction program. (3) Implementation of Market-Oriented Allocation Mechanisms: This activity will begin in FY 1999/ FY 2000.

Performance and Prospects: (1) To increase the quantity and quality of conventional water supplies, USAID is supporting the development of new wells, the upgrading and extension of water conveyance systems, and the monitoring of water quality. Following initial efforts to model the Eastern Aquifer, develop plans to meet long-term Palestinian water needs and design specific facilities in the West Bank, USAID’s efforts to develop new water supplies were delayed for up to 12 months pending the resolution of a series of issues between Palestinian and Israeli authorities. However, by early 1998 construction began on four production wells, transmission systems (source to town) in the Jenin and Hebron-Bethlehem districts, and household distribution systems for 11 Jenin-area villages. When these systems are completed in late 1999, Palestinians will benefit from an increase of approximately six million cubic meters/year of potable water, the establishment of transmission systems with a total capacity of 87 million cubic meters/year, and the first-time provision of piped water to 30,000 residents. In FY 1999, USAID will initiate a second phase of surveying, modeling and design work in the West Bank, with construction beginning in FY 2000 on additional production wells, transmission systems, village distribution networks and a series of monitoring wells. This incorporates support for the Bethlehem 2000 initiative, including two wells and the pipelines to carry the water from those wells to the city of Bethlehem. The water supply to the Bethlehem district will increase by 50% by the year 2001. (2) To promote integrated water management practices, USAID is financing activities to collect, treat and reclaim wastewater and stormwater, develop alternative water supplies (e.g., desalination), and institute water conservation and loss prevention measures. As part of the USAID-funded master plan for Gaza City, USAID is currently expanding a stormwater reservoir, establishing a stormwater infiltration site, contructing force mains, pump stations and sewer lines, and doubling the capacity of the Gaza Wastewater Treatment Plant to 32,000 cubic meters/day, while reducing the toxicity of its effluent so that it can be reused for agricultural/commercial purposes and/or aquifer recharge. This work, which will improve services for the 325,000 residents in and around Gaza City, is scheduled to be completed by mid-1999. In FY 1999/FY 2000, USAID will implement activities to improve the management of the Gaza Coastal Aquifer in order to reestablish it as a sustainable source of safe drinking water. This support will include innovative systems related to well system management, aquifer protection, desalination, recharge of aquifers and reuse of treated wastewater. USAID also plans to begin similar aquifer protection work in the West Bank, with additional interventions related to industrial waste management and wastewater treatment facilities in Hebron, and rural integrated waste (solid and water) management systems. (3) To establish market-oriented allocation mechanisms, USAID is enhancing the capacity of Palestinian organizations to develop plans and enact policies and regulations that reflect the economic, social, health and environmental implications of water use; establish appropriate tariff structures; and collect/re-invest revenues. These efforts are to some extent incorporated into the activities cited above. In addition, in FY 2000, USAID will initiate specific activities to improve the operations and maintenance capacity and administrative and planning systems of municipalities and utilities.

Possible Adjustments to Plans: No adjustments to plans are anticipated at this time.

Other Donor Programs: Consistent with the urgent need to address the wide range of issues relating to the provision of adequate quantities/quality of water to Palestinians in the West Bank and Gaza, the sector has been the single largest recipient of donor funding. Between 1994-1998, approximately $315 million was disbursed for water projects, nearly 10% of all donor financing. Given the political leadership exercised by the U.S. Government and the significant level of financing provided by USAID (approximately $145 million to date), USAID is considered the primary donor in the water sector. Germany, Norway, France, the United Kingdom, Japan, Italy and the World Bank have been the most active other donors. As a complement to USAID’s early emphasis on bulk water supply, other donors have financed capacity building and operational support for the Palestinian Water Authority (PWA), water distribution and wastewater collection/ treatment systems in selected areas and--to a more limited extent--desalination and loss prevention/ conservation programs.

Principal Contractors, Grantees, or Agencies: U.S. firms Camp, Dresser & McKee, Metcalf & Eddy and CH2M Hill are the prime contractors. U.S. private voluntary organizations (Save the Children Federation and American Near East Refugee Aid) and the United Nations Development Program also play significant roles.

Selected Performance Measures:

ACTIVITY DATA SHEET

PROGRAM: WEST BANK AND GAZA
TITLE AND NUMBER: More Responsive and Accountable Governance, 294-SO03
STATUS: Continuing
PROPOSED OBLIGATION/FUNDING SOURCE: FY 2000 $17,000,000 ESF
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2002

Summary: Through its programs, USAID is responding to the need to establish a functioning and accountable system of self-governance in the West Bank and Gaza. Related issues that USAID is addressing include limited citizens' input into the decision-making process, nascent government structures especially those related to constituent representation, unclear allocation of roles and authority among and within the various branches and levels of government, inadequate guarantees and exercise of basic freedoms, and an inadequate justice system.

USAID’s support for the January 1996 elections of the Palestinian Legislative Council (PLC) and the head of the Executive Authority provided the basis for its current democracy and governance portfolio. Activities are designed to strengthen the active participation of citizen groups in the governing process through their government representatives and civil society organizations, support an independent media, and enhance the capacity of the public sector (including the executive, legislative, and judiciary branches, as well as local government) to meet the needs of Palestinians in a transparent and efficient manner. All Palestinians will benefit from the emergence of open, transparent and effective self-rule mechanisms.

Key Results: Four key intermediate results were developed to achieve this objective: (1) Increased Participation of Civil Society Organizations in Public Decision-making and Government Oversight: USAID’s activities to date have resulted in widespread town hall meetings allowing constituents to express their concerns to the PC, Executive and local government representatives; a functioning citizens' rights center in the West Bank; stronger independent television stations; establishment of a media resource center to train journalists and broaden their professional skills; civic education sessions targeting rural populations and women; successful advocacy for the development of a supportive non-governmental (NGO) law; and new mechanisms for government-NGO cooperation in the health and social services sectors resulting in the award of service provision contracts to local NGOs by the PA. (2) Enhanced Capability of the Palestinian Legislative Council to Perform Functions of a Legislative Body: USAID has assisted the PLC to establish procedures for record-keeping and tracking the growing number of constituent inquiries; review key draft laws (e.g., those related to the judiciary, political parties, the income tax law, and the labor law); have a functioning parliamentary research unit which provides objective, non-partisan analysis and information; and undertake focussed oversight of the executive -- including review of the Executive’s annual budget. In FY 1998, USAID furnished the Legislative Council’s plenary hall and installed equipment to record votes and produce verbatim transcripts of proceedings, which has facilitated Council deliberations and made them more professional. USAID has also enabled the Legislative Council’s plenary proceedings to be televised for the public, thus increasing citizen awareness. (3) Increased Effectiveness of the Executive Authority’s Legislative and Public Policy Functions: USAID assistance facilitated an agreement between the Legislative Council and the Executive on each other’s role in the legislative process, which should contribute to a more efficient legislative process. (4) Foundation for Decentralized Local Government in Place: As an initial activity in this area, USAID has helped to design an organizational development plan for the Ministry of Local Government which will enable it to better support decentralization.

Performance and Prospects: (1) To increase the participation of civil society organizations in public decision-making and government oversight, USAID is strengthening local non-governmental organizations’ (NGO) management capacity and their capacity to exercise government oversight, policy analysis and advocacy roles; enhancing the skills of and creating the foundations for an independent media; and encouraging the dissemination of information to the public. These programs are conducted through the United States Information Agency (USIA) and local and international NGOs, which currently include five local civil society organizations and one international organization partnered with local groups. FY 1999/FY 2000 initiatives will include an increased emphasis on Gazan civil society organizations, which tend to be less developed than those in the West Bank. (2) To enhance the capability of the PLC to perform functions of a legislative body, USAID is supporting the development of key administrative systems, increasing the PLC’s ability to draft and review legislation, enhancing their skills in reviewing and monitoring the Executive’s budget and overall performance, and providing assistance to improve PLC responsiveness to its constituents. These programs are currently being implemented by a U.S. contractor and a U.S. grantee. A second phase of contractor support is scheduled to begin in FY 1999 - FY 2000. (3) To increase the effectiveness of the Executive Authority’s legislative and policy-making process, USAID is providing targeted support to establish a transparent process for developing, drafting and reviewing policies and legislation, which includes public input and legal and technical review. A second phase of this assistance will begin in FY 1999 - FY 2000. (4) In FY 1999, USAID will begin a comprehensive program of support to establish a foundation for decentralized local government. Work will focus on increasing the understanding of the current legal framework for local government operation, supporting the development of an advocacy agenda among local government units, encouraging the exchange of information among local governments, and providing assistance for policy reforms (including the development and modification of legislation and regulations) leading to greater decentralization. (5) To strengthen the rule of law, USAID will begin a new program in FY 1999 to increase the capacity of the judiciary to serve the public, improve Palestinian legal education, and upgrade skills levels in the legal profession.

Possible Adjustments to Plans: The addition of a rule of law component to USAID’s governance program was envisioned in USAID’s FY 1996-FY 2000 strategy. A team of judicial experts in late 1998 undertook a thorough review of feasible options. USAID will review and develop within its governance program a package of assistance to enhance the judicial sector.

Other Donor Programs: Although many donors have indicated interest in supporting programs in the democracy and governance area, USAID has been a leader in the design and provision of assistance, especially in the area of civil society. The World Bank, the United Kingdom and Australia are supporting initiatives related to legal reform and the justice sector, which complement the areas in which USAID plans to work. The European Union’s program of support with the PC has been developed in coordination with USAID. The World Bank, UNDP and other donors have programs, which support the development of local government entities; USAID anticipates working in related policy reform areas.

Principal Contractors, Grantees, or Agencies: USAID has implemented this activity through U.S. contractors (primarily Associates in Rural Development and Checchi/PalTech), grants to U.S. non-governmental organizations (primarily the International Republican Institute and National Democratic Institute) partnered with local organizations, and grants to local NGOs. USAID is working with USIA on media activities.

Selected Performance Measures:

ACTIVITY DATA SHEET

PROGRAM: WEST BANK AND GAZA
TITLE AND NUMBER: Selected Development Needs Met, 294-SPO1
STATUS: Continuing
PROPOSED OBLIGATION/FUNDING SOURCE: FY 2000: $13,000,000 ESF
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2002

Summary: Since 1996, this Special Objective has comprised a series of short-term and close-out activities, primarily those related to housing, strengthening of local institutions and emergency employment generation, which were initiated prior to the establishment of the USAID/West Bank and Gaza Strategy. These activities were largely completed by FY 1997. However, given emerging priorities, USAID has identified two development needs that will be addressed on an immediate-term basis under this Objective: 1) community service delivery and 2) maternal-child health.

A new Community Services Program derives from the demand from Palestinian communities for improved basic services. A widespread gap in quality services is causing increased frustration at the grassroots level and could jeopardize popular support for peace initiatives and democratic development. The situation has been exacerbated by several factors, among them difficult economic conditions; inadequate performance to date on the part of the PA and local governments in addressing community infrastructure and service delivery needs; and limited donor funding for NGO programs. The Community Services Program will support projects, which can rapidly scale-up to revitalize community-level infrastructure, address service delivery needs, and create short-term jobs. The second initiative derives from the serious health problems facing women and children in the West Bank and Gaza, including complications of pregnancy, anemia, premature births and low-birth weights. Major factors in these problems are high fertility with short birth intervals, along with weaknesses in clinical and outreach services. A Maternal-Child Health Pilot Program, which is the USAID Mission’s first health sector initiative, is intended to upgrade clinical and outreach services in order to improve maternal-child health and increase use of modern contraceptive methods. Operations research will be used to test the effectiveness of alternate health education and service delivery approaches.

Key Results: Projects funded by the Community Services Program will contribute to one or both of two results: improved service delivery in project areas and short-term employment generation. Three results are necessary for the success of the Maternal-Child Health Pilot Program: improvements in the health of mothers and newborns in target areas; effective promotion of birth spacing among the target population; and research findings which document the effectiveness of various health education and service delivery interventions.

Performance and Prospects: The Community Services Program, which will be a high-visibility rapid-start initiative, will be implemented through a competitive grants program open to all U.S. PVOs, and other mechanisms such as grants to international organizations (e.g., the United Nations Development Program/UNDP and the United Nations Relief and Works Agency/UNRWA. The Community Services Program will build upon the strengths and experience of U.S. PVOs and their network of local partners in the West Bank and Gaza. It will also build upon lessons learned from USAID’s earlier "Small Scale Infrastructure Project," which funded improvements in schools, neighborhood water systems, refugee shelters, and low-income housing and generated over 350,000 person/days of employment. Village water and sanitation projects funded under the proposed new activity will be based on models successfully tested under USAID’s water resources program. Individual projects will be selected by the grantees, based on a grassroots level process through which community residents will identify and prioritize their needs. Illustrative areas for individual projects include village water and sanitation; school construction and rehabilitation; non-formal education; community health services; agricultural services; low-income housing; and income-generating, vocational training or rehabilitation projects for vulnerable/marginalized groups.

The Maternal-Child Health Pilot Program will upgrade the quality of antenatal and postpartum services for mothers and their children, and make improved family planning services available at about 30 clinics located in three areas (in the northern and southern West Bank and in Gaza). As a "pilot," this two-year activity will test a basic model of intervention -- a standard package of services and several more specific health education and service delivery approaches -- to determine their efficacy and replicability. The activity will build upon the worldwide experience of USAID and its U.S. grantees, as well as the strong presence and good track record of Palestinian NGOs in providing community health services. Local NGO programs will be strengthened with appropriate systems, staff training, and management and logistics support. The results of the operations research will be widely disseminated. Data collection to be funded as part of the activity will include a qualitative study on knowledge, beliefs, attitudes and practices as well as a demographic and health survey, which will inform the latter stages of the pilot activity and any future USAID activities in the health sector.

Possible Adjustments to Plans: The Maternal-Child Health Pilot Program is a first step towards a probable new health sector strategic objective, which is likely to be initiated within the next 2 years.

Other Donor Programs:. The World Bank’s Community Development Project, with $23.8 million of donor funding, supports small scale community infrastructure projects executed by the PA. The Bank’s Palestinian NGO Project, funded at a level of $14.6 million, provides small grants to Palestinian NGOs to improve service delivery. Many donors have selectively supported smaller-scale public sector and NGO community development projects. However, the overall level of need for community-level infrastructure and services is huge (a current PA list of unfunded community infrastructure projects totals over $100 million), and support for NGO-based programs is relatively limited. Other-donor governments and institutions, especially the European Commission, UNRWA and UNFPA, are involved in the health sector but their efforts tend to be directed at national health policy issues and broad-scale strengthening of the Palestinian Authority Ministry of Health. None are working on a concerted, integrated basis on primary health care problems.

Principal Contractors, Grantees or Agencies: The Community Services Program will be implemented by registered U.S. PVOs and international organizations, who will work with a broad range of Palestinian NGOs, community groups, and municipal councils. U.S. PVOs and Palestinian NGOs will form a partnership to implement the Maternal-Child Health Pilot Program.

Selected Performance Measures: Baseline and target data have not yet been determined for these new activities. However, major crosscutting results indicators for community services are likely to include: number of people with improved services, and income generated through short-term employment opportunities. Separate indicators will also be tracked, as appropriate, by sector (e.g. improved water, sanitation, health services or schools). Indicators for the health pilot will include the percentage of women/babies receiving improved post-partum care, and rates for maternal anemia, low birth weights and acceptance of modern contraceptive methods.

Source: USAID