Grant Aid for the Financial Reform of Palestinian Authority through the World Bank

September 18, 2004

  1. Mr. Ryozo Kato, Japanese Ambassador to the United States of America, and Mr. James Wolfensohn, the President of the World Bank, exchanged notes on the 18th of September (the 17th of September, local time) at Washington D.C. to extend financial assistance in the amount of $10 million (1,100 million yen) to the Palestinian Authority through the World Bank's West Bank and Gaza Public Financial Management Reform Trust Fund.

  2. The budget of the Palestinian Authority continues to incur substantial deficit as a result of the Palestinian territories' economic stagnation brought about by the Israeli policy of "closure", which is blocking the movement of people and commodities into and out of the Palestinian territories. This Grant Aid will enable the Palestinian Authority to continue making its efforts in promoting financial reform in cooperation with the World Bank and other members of the international community. This aid is specifically used for financing the current expenditure of the Palestinian Authority.

  3. The Government of Japan expects that this Grant Aid will alleviate the severe financial situations of the Palestinian Authority and enable it to advance its reform.

  4. This Grant Aid was originally requested by Dr. Nabil Sha'ath, Minister of Foreign Affairs and Dr. Salam Fayyad, Minister of Finance of Palestinian Authority, during their visit to Japan last February. In responding to their request, Ms. Yoriko Kawaguchi, Minister for Foreign Affairs, announced at a G8 Foreign Ministers' Meeting (May 14 at Washington, D.C.) her intention to provide this Grand Aid.

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