Support via PEGASE 2016

The Israeli occupation is the main obstacle to development in Palestine. A sustainable economic growth depends on a political solution which would enable freedom of movement of persons and goods. This lack of basic preconditions for economic growth has caused a heavy aid dependency of the Palestinian Authority (PA). To reduce external financing needs, PA is looking into measures on how to increase domestic revenues through increasing the tax base and additional restraints on recurrent expenditures, such as the freezing of wages. The proposed Swedish contribution to PEGASE in 2016 aims at addressing the PA's budget deficit and the main objective of the PEGASE's Civil Servants and Pensioners (CSP) program is to provide salary and pension payments to PA employees who work with basic service delivery such as health and education. The funds cover the salaries of the PA's civil servants and pensioners to ensure the functioning of essential public services such as schools and hospitals in the West Bank and Gaza. The contribution will meet the immediate needs of the beneficiaries and support PA's overall financial situation. Direct financial support to PA thus meets a financial necessity that enables important Palestinian authorities and institutions to function. Functioning institutions are a prerequisite for the implementation of the national development agenda. PEGASE is assessed to be a well-established instrument for channeling funds to a specific result area and the support is in line with the Strategy for Sweden’s international development cooperation with Palestine 2015-2019. There are control mechanisms developed within the framework of PEGASE programs which ensure good internal control.