UK–Occupied Palestinian Territories development partnership summary, July 2023
Published 17 July 2023
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Introduction
The Strategy for International Development (IDS) places development at the heart of the UK’s foreign policy. It sets out a new approach to development, anchored in patient, long-term partnerships tailored to the needs of the countries we work with, built on mutual accountability and transparency. This approach goes beyond aid and brings the combined power of the UK’s global economic, scientific, security and diplomatic strengths to our development partnerships. Our 4 priorities are to deliver honest, reliable investment, provide women and girls with the freedom they need to succeed, step up our life-saving humanitarian work, and take forward our work on climate change, nature and global health. The Integrated Review Refresh (IR23) reiterates that sustainable development is central to UK foreign policy and sets out how the UK will go further and faster on development to reduce poverty and reinvigorate progress towards the Sustainable Development Goals (SDGs). This Country Development Partnership Summary details how the IDS and IR23 will be put into practice in the Occupied Palestinian Territories (OPTs).
Context
The development and humanitarian situation across the OPTs has been heavily impacted by restrictions imposed by Israel on trade and movement and access, recurrent hostilities, internal divisions, falling aid levels and the effect of the COVID-19 pandemic. As a result, economic growth is low and volatile. The Palestinian economy is forecast to grow at around 3% in the coming years which, given underlying population growth, means that real per capita income is expected to stagnate. Unemployment remains stubbornly high at 24.4% in 2022. Moreover, aggregate figures mask a wide divergence among different population groups with unemployment at 45.3% in Gaza, 61% among Gazan youth, and 55% among women across the OPTs.[footnote 1] Israeli restrictions on movement of goods mean that Palestinian businesses face additional costs, making it harder for them to compete. The average trade cost per transaction for a Palestinian firm is nearly 3 times as high as for an Israeli firm, while the average duration of the import process for a Palestinian firm is nearly 4 times as long as for an Israeli firm.[footnote 2]
There are chronic humanitarian needs across the OPTs as a result of the Occupation. 1.6 million people (close to a third of the population) are reliant on humanitarian support, and the severity of need has increased in the past year. It is estimated that 27.3% of the population experienced poverty in 2021 and only one third of children are reached by any social protection programme.[footnote 3] Gaza is facing ‘de-development’ with 2-thirds of its population needing humanitarian assistance, regular outbreaks of conflict, acute shortages of clean water, electricity and medicine, and worsening indicators for child health and nutrition. Gazan GDP per capita of $1,400 is comparable to countries in sub-Saharan Africa.
The OPTs currently have social development outcomes, including health and education, that are good in relation to their income level and the wider region. However, acute financial crises in both the Palestinian Authority and United Nations Relief and Works Agency (UNRWA), the 2 key providers of health and education services in the OPTs, put these gains at risk. Financial difficulties are also affecting services by other humanitarian agencies, such as the World Food Programme. Less than 40% of households (as low as 4% of households in Gaza) have access to safely managed water supplies. Children are vulnerable to repeated conflict and other forms of violence, creating high levels of need for mental health and psychosocial support. Children with disabilities are extremely vulnerable with more than a third not enrolled in education.[footnote 4] In addition, climate change is expected to worsen the already poor access to water and energy, and exacerbate humanitarian pressures.
Headline results of UK support
The UK uses all tools, including Official Development Assistance (ODA) programming and diplomatic efforts to address constraints to development. Examples of key achievements since 2021 include the following:
- supporting refugees and addressing humanitarian needs: UK funds connected 425,000 people to water and wastewater networks; helped UNRWA to continue providing essential services for 5.9 million Palestinian refugees regionally; supported 4,000 vulnerable families through social protection cash transfers; and helped 21,000 refugee families rebuild their lives following the May 2021 Israel/Gaza conflict
- protecting Palestinian rights. The UK’s Conflict, Security and Stability Fund (CSSF) has helped over 18,000 Palestinians at risk of eviction to protect their property rights
- strengthened economic opportunity: the UK has funded key water infrastructure, which will benefit 870,000 people in Gaza. Since 2021 the UK has supported 16 Palestinian businesses to improve competitiveness, 6 of which have increased sales by 35% and exports by 13%; and launched the UK-Palestinian Tech Hub
- improved PA viability: UK policy and technical engagement helped increase PA revenues in 2022 by an unprecedented 20%, including through a new ‘e-VAT system’
- strengthened accountability: UK support helped establish new PA-citizen engagement mechanisms, including digital citizen budgets in 5 key line ministries, a monitoring dashboard for public finances, and 9 local hospital boards
Why and how: the UK’s development offer
The UK’s programming in the OPTs aims to protect Palestinian rights and increase economic opportunity and resilience; limit the erosion of a future Palestinian State; and reduce drivers of instability and extremism. This supports the foundations for the UK’s long-term policy of a two-state solution (2SS). We will do this by working towards the following 6 goals.
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Limit deterioration in security across the OPTs: through supporting a more accountable and inclusive PA security service.
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A viable and more transparent and accountable Palestinian Authority, supported by a strong and open civil society: through technical assistance and expertise and through strengthening the capacity of civil society.
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Reduced degradation of Palestinian rights, access to land and identity and promote adherence to international law.
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Improve inclusive economic opportunities for Palestinians through: trade; investment; and infrastructure, particularly renewable energy and clean water.
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Limit deterioration of humanitarian needs and sustain protection of Palestinian refugees, through policy engagement and funding support to UNRWA; responding to humanitarian crises; child focused social protection; and strengthening mental health services.
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Promote UK values and soft power: through increased empowerment of women and inclusion; improving the quality of education; and promoting climate resilience.
Who we work with
The Palestinian Authority (PA) remains a critical partner for reducing poverty and improving development outcomes in the OPTs. Although the UK does not currently provide financial aid to the PA we do support technical assistance programmes to deliver fiscal improvements and improve transparency and accountability. The British Support Team supports PA Security Services reform and capability.
We coordinate closely with other development and humanitarian donors to maximise the impact of our work and ensure assistance is appropriately coordinated and targeted. UNRWA – the only organisation with the mandate and reach to serve the needs of 5.9 million Palestinian refugees – is a core partner. We also work with UN organisations, Non-Governmental Organisations and Civil Society Organisations (CSOs) to deliver humanitarian and protection support. We work closely with the IFIs (IMF, World Bank) to coordinate technical assistance and achieve our economic objectives, including through supporting water and energy infrastructure through a World Bank trust fund.
Delivery of His Majesty’s Government’s OPTs objectives is dependent on coordinated efforts from both British Consulate General Jerusalem and the British Embassy in Tel Aviv (BETA).
Key programmes
There are 5 key programme areas for ODA programme spend to meet the UK’s mission statement and campaign goals outlined above.
UK Support to Palestinian Refugees in the Near East
The programme will provide predictable, multi-year funding to UNRWA to advance Palestinian refugees’ human development, provide humanitarian, education, health and protection assistance to the most vulnerable, and contribute to stability in the region. This will help the agency deliver basic education including to girls, health services including family planning, vaccines, sexual and reproductive health services, and relief services to more than 5.9 million Palestinian refugees in Gaza, the West Bank, Jordan, Lebanon and Syria. Contributes to Goal 5.
Supporting Economic Empowerment and Development in the Occupied Palestinian Territories
This programme focuses UK economic development assistance to the OPTs in the areas of water, energy, trade and customs. Programme activities support institutional capacity building and infrastructure development, working closely with the Palestinian Authority and government of Israel. The overarching goal is to support economic growth and inclusive job creation in the OPTs. There is a strong focus on gender and social inclusion, including women-led business and inclusive employment opportunities. The UK-Palestinian Tech Hub supports links between tech businesses in the OPTs and the UK. Contributes to Goal 4.
UK Humanitarian Support in the Occupied Palestinian Territories
The programme aims to improve the resilience of households, save lives during humanitarian emergencies, and prevent a further deterioration in the humanitarian situation. The programme will enhance the efficiency and effectiveness of UK support by providing predictable multi-year funding to partners focussing on priority sectors with high levels of chronic need and reforming the humanitarian system’s approach to coordination and cash programming. It will support work on much-needed Mental Health and Psychosocial Support. Contributes to Goal 5.
Empowering Palestinian Institutions and Civil Society (EPICS)
EPICS will improve the viability, legitimacy and inclusion of governance and service delivery, protect and support civic space, and empower women, in the OPTs. It will provide technical assistance to PA institutions across governance sectors, with a particular focus on public financial management and provision of essential services. EPICS will protect and support Palestinian civic space by supporting CSOs to hold the PA and other local duty bearers to account for governance and service delivery. EPICS will strengthen women’s empowerment, primarily through supporting coalition building among local and grassroots organisations. Through improving PA viability and legitimacy, it will help reduce the drivers of instability and extremism. Contributes to Goals 2 and 6.
Conflict Stability and Security Fund (OPTs and Israel Programme; £7 million ODA in 2023 to 2024)
This programme aims to help protect the political and physical viability of a two-state solution. The programme is designed to contribute towards the delivery of the following overall objectives: Building effective and accountable Palestinian institutions ready for statehood, supportive of UK values and interests, and resilient to political transition; Protecting and assisting vulnerable communities to preserve the viability of a two state solution, to uphold international humanitarian law and respond to arising needs. Contributes to Goals 1, 3 and 6.
In addition to these bilateral programmes there are a number of UK funded Centrally Managed Programmes which operate in the OPTs as well as a UK attributable proportion of multilateral spend (World Bank, UN agencies and EU spend). These contribute to all goals.
The 6 cross-HM Government goals are aligned with the UK’s International Development Strategy, particularly focusing on patient development. We are building the institutions needed to maintain the viability of a Palestinian state, to strengthen Palestinian growth, support gender and social inclusion, meet chronic humanitarian need and strengthen resilience to shocks.
In coming years, as well as support to UNRWA and humanitarian programmes we will maintain a focus on proportionate and agile technical assistance programmes (especially in economic development and governance), coordinating closely with other donors and development banks. We will focus more of our support on climate resilience and on gender and social inclusion, particularly women’s business leadership, political empowerment, and employment.
Financial information
Initial allocations have been set internally to deliver the priorities set out in the International Development Strategy (May 2022) and the Integrated Review Refresh 2023, based on the FCDO’s Spending Review 2021 settlement.
The department’s spending plans for the period 2022 to 2023 to 2024 to 2025 have been revisited to ensure HM Government continues to spend around 0.5% of Gross National Income (GNI) on ODA. This was in the context of the significant and unexpected costs incurred to support the people of Ukraine and Afghanistan escape oppression and conflict and find refuge in the UK, and others seeking asylum. The government provided additional resources of £1 billion in 2022 to 2023 and £1.5 billion in 2023 to 2024 to help meet these unanticipated costs. The government remains committed to returning ODA spending to 0.7% of GNI when the fiscal situation allows, in line with the approach confirmed by the House of Commons in July 2021.
The country development partnership summaries include the breakdown of programme budgets allocated to individual countries for 2023 to 2024 and 2024 to 2025. These allocations are indicative and subject to revision as, by its nature, the department’s work is dynamic. Programme allocations are continually reviewed to respond to changing global needs, including humanitarian crises, fluctuations in GNI and other ODA allocation decisions.
It should be noted that these figures do not reflect the full range of UK ODA spending in these individual countries as they do not include spend delivered via core contributions to multilateral organisations, or regional programmes delivered by the FCDO’s central departments. Other UK government departments also spend a large amount of ODA overseas. Details of ODA spent by other UK government departments can be found in their annual report and accounts and the Statistics for International Development.
FCDO Official Development Assistance allocation
| Allocated ODA budget for financial year 2023 to 2024 | Indicative ODA budget for financial year 2024 to 2025 |
|---|---|
| £17,000,000 | £29,000,000 |
Indicative budgets for FCDO ODA for the financial years 2023 to 2024 and 2024 to 2025 are set out above. This does not include ODA being spent by the CSSF. The sectoral breakdown of this spending by broad sector and by priorities in the UK’s international development strategy are set out in the charts below. 100% programmes are marked as principally or significantly focused on promoting gender equality, and 60% are marked as principally or significantly focused on disability inclusion.
Figure 1. 2023 to 2024 spend by priority programme