Danish-Palestinian Partnership Transition Programme - Annexes

Transcription

1 Danish-Palestinian Partnership Transition Programme - Annexes Contents Annex 01: Danish-Palestinian Partnership Executive Summary The political context The economic context Results of Danish engagement Danish-Palestinian Partnership... 9 Objective 1: State-building and citizens rights Objective 2: Equal economic opportunities Risk Assessment Annex 02: Partners brief description Annex 03: Results framework Results framework of the state building thematic programme Results framework of the economic development thematic programme Annex 04: Budget DKK mio Annex 05: Risk management matrix Contextual Risks Programmatic Risks Institutional Risks Annex 06: Summary of appraisal recommendations Annex 07: Context analysis Annex 08: General development indicators Annex 09: Theory of change... 59

2 Annex 01: Danish-Palestinian Partnership Executive Summary The overall political objective of the Danish engagement is to support the realisation of a two-state solution to the Israeli-Palestinian conflict, encompassing the State of Israel and an independent, democratic, sovereign and contiguous State of Palestine, living side by side in peace and security. It is essential that it will be a viable and accountable Palestinian state, and that the security of Israel will be safeguarded. The aim is to improve the protection of both Israeli and Palestinian civilians. The Danish government s policy on the Israeli-Palestinian conflict enjoys broad support in the Danish Parliament. In January 2014, all parties but one voted in favour of a motion laying out the overall principles of this policy. The continued lack of a permanent solution is a major source of risk and instability in the region affecting the security of the EU. The Danish Government will within the framework set out by international law and established EU policies in close collaboration with the EU and EU Member States on the ground seek to achieve the objective of a two-state solution, including the recognition of Palestine as a state when appropriate. The on-going changes across the Arab world make the need for progress on the Middle East peace process all the more urgent. It will be necessary to utilize a wide range of political and financial tools to achieve such progress. Denmark will in the coming years strengthen its engagement in the Palestinian state building process, including through an increase in the level of financial assistance, in light of the current critical challenges facing it. Denmark strongly supports the efforts spearheaded by the US to ensure a negotiated solution to the conflict. However, the current challenges to the two-state solution must not be underestimated. Parts of these challenges relate to the Israeli occupation, including demolition of Palestinian properties, forced displacement of civilians and the continued Israeli settlement activity, the latter of which is illegal under international law and constitutes an obstacle to peace. In addition to the direct violations of international humanitarian and human rights law, the Israeli approach also results in an unsustainable fiscal-economic situation for the Palestinians. It is not possible to build a viable economy under the current conditions, and both Gaza and the West Bank including East Jerusalem are very reliant on donor support. But the challenges to the two-state solution also relate to internal Palestinian factors, especially the political split between the Palestinian Authority (PA) in the West Bank and the de facto Hamas government in Gaza; the need to strengthen the capacity of Palestinian institutions further as well as the longstanding absence of Palestinian presidential and legislative elections. Despite this backdrop, repeated World Bank assessments have concluded that the Palestinian Authority has achieved significant progress and is above the threshold for a functioning state in key sectors. The development potential of Palestine is considerable, but it can only be fully realized through a sustainable political solution to the Israeli-Palestinian conflict. Danish development assistance to 2 P a g e

3 Palestine will in the short and medium term continue to be subject to the dominant political framework conditions, resulting from the effects of the occupation, especially continued settlement construction and the growing territorial integration of the West Bank, in particular East Jerusalem and Area C, into Israel. The strategic approach to Danish-Palestinian development cooperation must therefore be flexible enough to accommodate different future scenarios. Especially in light of the current peace talks and the rapid regional changes taking place in the Middle East, one element of this flexible approach will be to limit the strategy to a two-year period. It is, however, essential that the activities supported by Denmark will provide benefits for Palestinians irrespective of the outcome of the current peace talks. The Danish assistance will be formulated and implemented within a general peace building approach as a way to ensure stability and mitigate fragility founded on a Human Rights Based Approach. The overall objective is to support the realisation of an independent Palestinian state within the framework of a two-state solution with a robust economy, sustainable institutions and good governance at national and municipal level. As a relative small donor, it is important that the Danish support is focused on a few key objectives to be seen as a serious cooperation partner with sufficient weight within the chosen sectors. Building on a decade-long engagement, the two specific strategic objectives will therefore be: 1) Palestinian state-building and citizens rights as a means to support good governance, democracy and human rights; 2) Equal economic opportunities through stimulation of economic development, growth and livelihood. Denmark has traditionally had a strong focus within the Municipal Development and Local Governance sector, where Denmark functions as lead donor. This will now be supplemented by a new programme aimed at strengthening local democracy and the active involvement of citizens in local political processes. Support for human rights defenders, Israeli and Palestinian NGOs, the Ombudsman and other institutions providing checks and balances will be continued and enhanced as necessary. Furthermore, the deteriorating situation for the most vulnerable Palestinians in Area C calls for strengthened European and Danish support to this area in close cooperation with all relevant stakeholders. Denmark will therefore also explore opportunities to scale up its engagement in Area C, while at the same time taking into account the challenging political framework for operating in this area. In addition, Denmark will enhance its efforts to stimulate economic growth and create jobs in the coming years thus supporting PA s prime development objective of developing its economy as the basis for a sustainable and viable state. 3 P a g e

4 1. The political context The Israeli-Palestinian conflict is a political conflict focused on territory. A solution to the conflict requires a comprehensive political settlement which takes into account the interests of the parties, the wider region and external stakeholders. The question of Gaza must form part of a final agreement. The EU and Denmark have a fundamental interest in stability in the region. The continued conflict is a major source of lost economic opportunities for the region and constitutes a regional security threat that also affects the security of the EU. Heeding the aspirations of the people in the region, including those of Palestinians for statehood and those of Israelis for security, is a crucial element for lasting peace and stability. The conflict affects negatively the relationship between the EU and the wider Arab and Muslim world. Moreover, the absence of a political solution may lead to donor fatigue. In continuation of previous international efforts to resolve the Israeli-Palestinian conflict, including the Road Map for Peace proposed by the Middle East Quartet, the current US administration has made the Israeli-Palestinian conflict one of its main foreign policy priorities. A new round of peace negotiations was initiated in July 2013 under US mediation with a timeframe of nine months. The leaders on both sides must be commended for their decision to re-enter into these talks. The renewed talks take place in a broader regional context, where many changes have occurred as part of the Arab spring. This influences both the Israeli-Palestinian relations and the internal Palestinian dynamics given the different regional affiliations of Fatah and Hamas, with the latter being a part of the Muslim Brotherhood movement. For the EU, the basic parameters for a comprehensive, just and lasting solution are based on UN resolutions, including all relevant Security Council resolutions and in particular resolutions 242 (1967), 338 (1973) and 1515 (2003), and EU statements, most notably the Foreign Affairs Council conclusions of 8 December 2009 and 14 May Thus, the overall objective is clear. The engagement of Denmark and EU is guided by political considerations and a wish to see all relevant legal obligations and principles pertaining to the conflict implemented by all parties within the framework of a negotiated solution. However, developments on the ground have made the achievement of a two-state solution increasingly difficult. One element is the continued illegal settlement expansions by Israel. More than 150 settlements, as well as approximately 100 so-called settlement outposts, have been established in the West Bank, including East Jerusalem. It is estimated that more than settlers now live in this area. In addition, extensive restrictions on Palestinian movement, and the reservation of land in the West Bank for settler roads, training areas for the Israeli security forces, archaeological excavations as well as nature reserves, significantly limit the Palestinian access to and influence over the Palestinian territories. The construction of several hundred kilometres of 4 P a g e

5 wall in the West Bank and East Jerusalem after the Second Intifada if completed according to the planned route, approximately 85 per cent of the wall will be on the Palestinian side of the Green Line is part of the challenge. Area A, B and C Following the 1993 Oslo Accords and the 1995 Interim Agreements between Israel and the PLO, the West Bank was divided into three zones, A, B and C. While some control was given to the Palestinian Authority (PA) in Areas A and B, Israel maintained full security control, and control over building and planning in Area C. Area C constitutes over 60 per cent of the West Bank, is the only contiguous territory, and contains the most significant land reserves available for Palestinian development, as well as the bulk of Palestinian agricultural and grazing land. Area A consists of approximately 18 per cent of the West Bank and is under Palestinian security and civil control, while Area B consists of approximately 21 per cent of the West Bank and is under Palestinian civil control and joint Palestinian-Israeli security control. Israeli control over security enforcement and planning processes in Area C and East Jerusalem gives rise to a number of concerns. This especially relates to the number of demolitions of Palestinian structures, the often limited follow-up to acts of settler violence, denial of building permits for Palestinians and the increased number of unilaterally revoked residency rights for Palestinian residents of East Jerusalem. As the UN report to the Ad Hoc Liaison Committee (AHLC) meeting in September 2012 emphasised, political action is urgently needed if the statehood achievements should not be undermined: the prolonged absence of a credible political horizon for a final status agreement, ongoing conflict and the occupation represent ever more acute challenges to this progress, bringing us to a critical juncture which will determine whether the two-state solution remains viable. Internal Palestinian factors, however, also constitute significant political challenges. Most notably the split between the PA in the West Bank and the de facto Hamas government in Gaza has undermined the Palestinian attempt to present a unified position and constitutes a significant political and practical obstacle to Palestinian state-building. This split has also blocked presidential and legislative elections in Palestine since 2006; it will constitute a growing legitimacy challenge. The potential conflict between the desire to maintain the unity between the West Bank and Gaza on the one hand and the need for democratic accountability on the other hand, is one of the most difficult questions facing Palestinian leaders. The Palestinian aim for statehood is closely linked to the ability to adhere to international standards for democracy, good governance and human rights. At the political level Denmark will, in conjunction with its EU partners, take steps to Further support initiatives by the US, the UN and the EU that can lead to a negotiated twostate solution; 5 P a g e

6 Support the implementation and enforcement of all relevant UN and EU obligations, rules, principles and guidelines pertaining to the situation, including the EU Guidelines on International Humanitarian Law; Continue support for maintaining the viability of a Palestinian state, based on the pre-1967 borders. This entails support for the realization of a two-state solution to the Israeli- Palestinian conflict, encompassing the State of Israel and a sovereign, independent, democratic, contiguous and viable State of Palestine, living side by side in peace and security. Thus, the on-going territorial fragmentation of Palestine should be opposed and reversed; Continue support for a full and effective implementation of existing European Union legislation and national arrangements applicable to settlement products. 2. The economic context The PA has significantly improved its ability to plan, coordinate and implement development efforts, both in terms of capital investments and budget support. It has also strengthened its governance performance regarding public service delivery and institutional reforms and improvements of the justice system, public prosecution and the civil police have been achieved. Furthermore, service delivery, not least in health and education, compares favourably to other middle income countries in the region. The Palestinian National Development Plan (PNDP) consolidates the state-building efforts of then Prime Minister Fayyad s two-year plan Ending the Occupation, Establishing the State from 2009 and the Palestinian Reform and Development Plan Currently the National Development Plan (NDP) is being finalized, which will be a key document in the ongoing policy dialogue between Denmark and the PA. Denmark concurs with the repeated World Bank assessments that if Palestine and the PA maintain their current performance in institution building and delivery of public services, it is well positioned for the establishment of a state at any point in the near future, when it comes to administrative and governance aspects, particularly within the West Bank. Despite a number of years with relative economic stability and positive growth rates, the economic situation in the West Bank and Gaza remains highly reliant on donor support. According to the World Bank the most significant impediment to economic viability in Palestine is the multi-layered system of restrictions imposed by Israel. This constrains investment, raises the cost of doing business and hinders economic cohesion. Many of these restrictions are not related to final status issues. The annual cost of the occupation measured by the foregone GDP is estimated at more than USD 3 billion. The overall unemployment rate reached 22 per cent in the first half of 2013, with youth unemployment being even higher. In Gaza almost one in two Palestinians aged is unemployed. 6 P a g e

7 Within the West Bank, the continued geographical fragmentation of Area C poses a binding constraint to real economic growth. As the only contiguous part of the West Bank, Area C is essential for the development of public infrastructure, such as transportation, water and electricity networks, wastewater treatment plants and landfills, private sector development, and the development and expansion of communities in Areas A and B. In a report from October 2013 specifically on Area C, the World Bank concluded that as much as 35 percent could be added to the Palestinian GDP, if businesses and farms were permitted to develop within the area. Freeing economic activity in Area C would in particular have a high impact on the development of businesses in agriculture and Dead Sea minerals exploitation, but other sectors would be able to benefit from improvements in the quality and cost of infrastructure and increased demand for goods and services as well. The situation in Gaza continues to be precarious and non-sustainable. It is deplorable that the de facto Hamas government continues to reject the basic principles of the peace process as set out by the Middle East Quartet: 1. recognizing Israel s right to exist; 2. abiding by previous diplomatic agreements; and 3. renouncing violence. However, it must be recognized that the continued Israeli restrictions on access via land and sea combined with the closing down of most illegal tunnels by the Egyptian authorities, have created very difficult economic and humanitarian conditions for the Palestinian population in Gaza. An immediate, sustained and unconditional opening of crossings for the flow of humanitarian aid, commercial goods and persons to and from the Gaza Strip while fully recognising Israel s legitimate security concerns is a priority. Otherwise, the PA and the international community will not be able to adequately address the urgent needs of the Gaza population which constitutes approximately 35 per cent of the Palestinian population in Palestine and almost half of PA budget expenditure. Irrespective of the external constraints in Gaza and the West Bank, it is important that the PA continues the economic, political and democratic reform process that has led to many positive achievements over the last decade. This includes the enhancement of domestic revenues, improved public financial management, strengthened anti-corruption measures, independent checks and balances as well as control over financial expenditures. Progress on these parameters is necessary to ensure a fiscal space for basic service provision to the Palestinian people. It is furthermore important to enact legislation that allows for private sector investments. Denmark will continue to work closely with the PA and likeminded donors to help facilitate this agenda. However, the combination of the multi-layered system of restrictions imposed by Israel and the weak commercial framework conditions currently makes it difficult for Danish companies to be active in Palestine. The overall economic development in Palestine is highly sensitive to periodic incidents of renewed violent conflict followed by the imposition of economic and other sanctions. 7 P a g e

8 3. Results of Danish engagement Looking back on almost two decades of Danish engagement with the Palestinians and even more long-term assistance to UNRWA, Denmark has contributed to keeping the vision of an independent Palestine alive and strengthened the foundation for future statehood. This has been achieved despite the challenging and changing realities on the ground. The Danish engagement has been carried out in close cooperation with the EU and its Member States as well as other donors. A number of concrete achievements can be highlighted: Maintaining the Palestinian population on the land, albeit within an ever more restricted physical space; Active political engagement with the PA to help facilitate a negotiated solution. Denmark has since 2000 supported PLO s negotiation secretariat which is the only body that has the mandate to advice the PLO leadership on final status issues such as security, borders, settlements, refugees and Jerusalem. Denmark voted in favour of Palestine s non-member observer State status at the UN in 2012; Introduction of a voluntary labelling mechanism of settlement products in Denmark in October 2012; Improving education and health of Palestinian refugees through UNRWA, thus providing refugees with a basis to build a future; Through a regional agricultural programme, the cooperation between technical actors in the region has been improved, as part of a technical peace-building approach. In addition, Palestinian agricultural practices have been improved through the cooperation; Enhancing the basic livelihood of the population in Gaza and mitigating some of the humanitarian effects of the on-going closure of Gaza, including activities aimed at economic recovery and job creation; Building of viable institutions particularly in the municipal sector. Municipalities are crucial institutions for the Palestinian population in whatever scenario may play out in Palestine; The rule of law and protection of human rights through support to the Palestinian Ombudsman institution, EU police training mission (EUPOL COPPS) and Palestinian Civil Police. Denmark has also supported the Temporary International Presence in Hebron (TIPH) as well as Israeli and Palestinian NGOs working in the occupied Palestinian territory aiming to ensure adherence to international humanitarian law and to influence the behaviour of the three duty bearers (Israel, Palestinian Authority, and the de facto Hamas government in Gaza); Strengthening of anti-corruption measures in relevant institutions, such as the independent Palestinian Anti-Corruption Commission, which is tasked with investigating, prosecuting and adjudicating corruption crimes; Financing collaboration between Danish NGOs and Palestinian counterparts in areas such as international humanitarian law, assistance to civilians traumatized by the conflict, advocacy and livelihood in Gaza and Area C. 8 P a g e

9 European donor coordination is critical to ensuring a stronger impact of the substantial amount of humanitarian and development assistance to Palestine. Significant efforts have been made to promote this through regular working groups hosted by the EU Representative Office. Denmark has played an active role in seeking to scale up the donor coordination and will continue to identify possibilities for alignment and effective coordination between EU and Member States as well as other donors. As a means to ensuring greater impact Denmark will also in the coming planning period work towards more efficient EU presence on the ground and maximum use of relevant EU instruments. 4. Danish-Palestinian Partnership Average annual Danish development assistance to Palestine has since 2009 amounted to approximately EUR million. This level will be increased during the duration of this strategy. Due to the challenges with access to food, services and economic activity and the fact that around one third of the population is food insecure, Palestine is among ten protracted and complex crisis areas that Denmark prioritizes in the delivery of humanitarian aid. Direct Danish humanitarian assistance to Palestine amounts to approximately EUR 14 million since The substantial international assistance to Palestine, the high political profile of the conflict, and the complexity of the situation on the ground, stress the need for close coordination of both humanitarian and development assistance to pursue synergies and avoid duplication and overlap. It is a Danish priority to play an active role within the relevant coordination bodies. The Danish-Palestinian development partnership is founded on the Palestinian National Development Plans and there is a continuous policy dialogue between the PA and Denmark to optimize the cooperation. This policy dialogue will be informed by the Human Rights Based Approach (HRBA) providing support to both duty bearers and rights holders. Moreover, the Danish cooperation programmes will be based on a comprehensive analysis of the human rights and international humanitarian law situation, including the four HRBA principles; non-discrimination, participation and inclusion, transparency and accountability. As a result, Danish assistance will continue its support to the reform agenda of the PA while trying to improve the living conditions of some of the most vulnerable groups in the Palestinian society with special emphasis on refugees and citizens in Gaza. Based on HRBA, the Danish assistance to Palestine will ensure that the Palestinian population is engaged and is given the opportunity to actively take part in national processes of reform and change. Thus, not only national government reformers, but equally Palestinian civil society is considered a key partner to be fully involved in decisions, plans and strategies, which influence the daily lives of Palestinians. The deteriorating situation for the most vulnerable Palestinians in Area C calls for strengthened European and Danish support to this area in close cooperation with all relevant stakeholders. Therefore, Denmark will explore opportunities to scale up its engagement in Area C while at the same time taking into account the challenging political framework for operating in this area. 9 P a g e

10 To this end, and in line with the development priorities of the Danish Government, Denmark will aim to continue its support for long-term peace building in Palestine and in the region. The overall aim is to facilitate mitigation of local and regional instability by enhancing the prospects of Palestinians and Israelis engaging in a viable and just peace settlement. Denmark will support the realisation of an independent Palestinian state within the framework of a two-state solution with a robust economy, sustainable institutions and good governance at national and municipal level. The Danish assistance will in that respect focus on two immediate strategic objectives: a) Palestinian state-building and citizens rights as a means to support Palestinian national aspirations, good governance, democracy and human rights; b) Equal economic opportunities through stimulation of economic development, growth and livelihood. Due to the uncertainties arising from the Israeli-Palestinian conflict, including the unknown outcome of the on-going peace talks, some unallocated funds will be set aside to respond to urgent needs or windows-of-opportunity, where the overall goal of facilitating a negotiated two-state solution can be advanced. These unallocated funds are expected to be utilized within the two immediate strategic objectives. Objective 1: State-building and citizens rights The long-term objective for Danish engagement in state-building in Palestine is to promote good governance, democracy and human rights by helping Palestinian reformers to build effective, accountable and viable state institutions, capable of engaging productively with the people to promote sustainable development. An intrinsic part of the Danish approach to Palestinian statebuilding is to enhance the ability of Palestinian civil society to play a role in the decision-making processes that shapes the daily lives of Palestinians. There are frequent reports by the Palestinian Ombudsman and civil society organisations on violations of human rights as well as obstacles to democratic reform related to the violation of the right to life, arrests, torture and other forms of cruel, inhuman or degrading treatment. Women and marginalised groups, such as Bedouins, are especially vulnerable caught between traditional roles and unfair treatment. A key focus will continue to be the Danish support for municipal development and local governance (MDLG). The assistance to the local administration, governance as well as infrastructure development will be based on the good results demonstrated over the years. Along with support to the national level, these activities underpin the strategic objective of sustainable and democratic Palestinian state building and strengthen the political and administrative fabric. In other words, as one of the oldest existing levels of public authority, local governments can be said to form the backbone of the public administration within the Palestinian society. Even in times of political and economic crisis, local government units have proven themselves as robust providers of basic services and governance to the Palestinian people. Thus, the MDLG sector is considered a relatively resilient sector in terms of developmental relevance - not least in 10 P a g e

11 relation to scenarios entailing conflict escalation and/or possible disbanding of the PA itself. Danish MDLG activities are currently covering all municipalities in Gaza and the West Bank. Together with the Ministry of Local Government, Denmark will continue to co-chair the MDLG Sector Working Group focusing on the overall aim set out in the NDP : to empower local government and bring public services closer to citizens. The Danish support to MDLG is channeled through the multi-donor Municipal Development Programme (MDP), focusing on capacity building in local administrations with the aim of improving financial management, unified planning, transparency, accountability and service delivery. In addition, Denmark will until the end of 2014 support MDLG through its bilateral Local Development Programme (LDP), focusing on improved service delivery and amalgamation of municipalities. In the coming years Denmark will build on its key role and results achieved in the MDLG sector and launch a nation-wide programme aimed at strengthening local democracy and the active involvement of citizens in local political processes. Denmark will remain active in the Human Rights sector, both through support to the Palestinian Ombudsman institution, the Independent Commission for Human Rights (ICHR), and through a donor consortium, dealing with Israeli and Palestinian civil society NGOs involved in the sector. Danish support to the ICHR is a means to secure the rights of Palestinian citizens vis-à-vis the ongoing state-building efforts. A well-functioning human rights ombudsman ensures that Palestinian civil society has a powerful handle with which to hold the PA in the West Bank and the de facto Hamas government in Gaza accountable and ensure that they are responsive and attuned to popular demands. Danish support to the human rights donor consortium also contributes to this, mainly through advocacy and accountability measures, while also addressing human rights violations emanating from the Israeli occupation, the PA and the de facto Hamas government in Gaza. The Palestinian and Israeli NGOs, receiving core funding through the NGO Secretariat, are instrumental in contributing to the effective realisation of and adherence to human rights and International Humanitarian Law in the occupied Palestinian Territories and in influencing the behaviour of the relevant duty bearers, including Israel, PA and the de facto authorities in Gaza. As a result of the improved fiscal and institutional performance of the PA, Denmark has begun channelling funds directly to the PA via the EU instrument for direct financial support (PEGASE). PEGASE provides financial assistance to the PA to cover its recurrent costs such as civil employee salaries and pensions, social expenditure, private sector arrears and essential public services as well as support for Area C for land reclamation, including compensation and small infrastructures. Objective 2: Equal economic opportunities The objective is to improve Palestinian livelihood and reduce poverty by creating job opportunities and revive sustainable economic growth. However, given the severe limitations on the economy, as described above, Palestine is in a situation, where humanitarian assistance to vulnerable groups is still necessary. The Danish engagement in this field must therefore focus both on the immediate needs, especially of the Palestinian refugees, and the longer term efforts to promote a sustainable 11 P a g e

12 economic development. In addition to the special focus on refugees, Gaza will remain a key priority. The Danish efforts to stimulate economic growth have until now primarily been focused on Gaza. The post ceasefire improvements for Gaza following the escalation of hostilities in November 2012 have only had limited impact, and the Egyptian closure of most of the illegal tunnels into Gaza has further reduced the inflow of goods. The prolonged crisis in Gaza has led the remaining few humanitarian and developmental actors to realize that the present humanitarian assistance with food aid and cash for work is unsustainable and creates aid dependency. In order to counter this, Denmark is engaged in a substantive economic recovery programme, implemented by Oxfam. The programme takes the prevailing approach to development in Gaza a step further in its focus on support to sustainable economic recovery, socio-economic empowerment and increased employment opportunities in general and for youth and women in particular. Denmark envisages a continued support to economic recovery in Gaza over the coming years. But given that support for economic growth is a key priority for the PA, the aim will be to scale up the Danish assistance to also include activities within the West Bank. The importance of increased focus on private sector led growth as a mean to reduce the significant unemployment is also highlighted by the Economic Initiative advanced by the US and the Office of the Quartet Representative as part of the current peace talks. On the humanitarian side, Denmark continues to support the Palestinian refugee population through UNRWA. Focus is on the provision of basic health services and access to education and more developmental activities such as micro-financing, vocational training and job creation. In the absence of a solution to the Israeli-Palestinian conflict, the international community remains morally obliged to uphold its stated commitment to Palestinian refugees. In addition to meeting human and development needs of the refugees, this commitment entails the continued exertion of efforts to reinvigorate the peace process towards a prompt settlement of the Palestinian question in accordance with relevant United Nations resolutions. Furthermore, the stabilizing effect of UNRWA s work in the region must not be underestimated. UNRWA is faced with an escalating financial crisis as the rate of growth in expenses is outstripping growth in revenue mainly due to the constantly growing number of Palestinian refugees. This puts UNRWA in a challenging situation and compels the organisation and all its stakeholders to think of new ways to mitigate the negative impact of the difficult financial situation. Denmark has been engaged in a number of UNRWA reform efforts in order to make the organisation more effective and efficient in its implementation of support to the Palestinian refugees. To underpin this reform work and to secure UNRWA s activities in the long run, the Danish core contribution to UNRWA has been increased with 20 million DKK to 90 million DKK from Denmark will continue its support to UNRWA, both financially and in terms of continued reform. The strategic dialogue with UNRWA will, among other things, focus on improving the performance and the effectiveness of the organisation. 12 P a g e

13 A number of Danish NGOs have over the years continued to provide assistance to the most vulnerable communities in marginalized areas of the West Bank and in Gaza. Many of the interventions have been aimed at improving livelihood and securing access to basic services. Denmark has a long-term partnership with a number of Danish humanitarian NGOs playing a central role in delivering relief assistance thus supplementing Denmark s direct cooperation interventions. 5. Risk Assessment Danish development assistance to Palestine will in the short and medium term continue to be subject to the political framework conditions resulting from the Israeli-Palestinian conflict. The development potential of Palestine is considerable, but can only be fully realized through the achievement of a viable and just political solution to the Israeli-Palestinian conflict. The PA in effect has limited control over the majority of the West Bank and it is unlikely that it will extend its authority to Area C, East Jerusalem and Gaza significantly in the short term. Thus, Denmark (and the rest of the international donor community) runs the risk of supporting a statebuilding project that in effect is not able to bridge the geographical divide of Palestine and hence does not support the overall objective of a viable two-state solution. In terms of political risks in relation to the Danish-Palestinian development partnership and the overarching goal of a two-state solution, the last decade did not yield results in relation to a forward moving peace process. Despite the on-going international efforts supporting the peace process the achievement of a two-state solution to the conflict is uncertain. Some key donors have indicated that a failure to reach a two-state solution during this round of peace talks would lead to serious questions regarding how to support the Palestinian cause. In other words, the international community cannot develop Palestine by itself out of this conflict, no matter how many funds are brought to bear. Regardless of the considerable Palestinian progress in terms of institutional reform over recent years (leading to the present state of readiness with regards to Palestinian statehood) there is a risk that continued absence of a political solution to the conflict will offset results already achieved. Certain operational risks to the implementation of Danish development assistance also exist. A deteriorating political and security situation in Palestine due to the lack of progress in the peace process may delay and/or hinder the implementation of donor interventions, including activities funded by Denmark, not least in the field of state-building. Furthermore, violent reactions to the continued occupation of Palestine may undermine the efforts of Palestinian reformers and put their achievements at risk. The persistent internal Palestinian fragmentation poses a real risk to the development objectives of state-building and improved livelihood in Palestine. 13 P a g e

14 A difficult environment prevails for humanitarian actors to actually bring assistance to Palestinian civilians in need, as a result of policies and actions taken by the Israeli authorities. Among the challenges are hindrance of access, confiscation of relief equipment and demolition of buildings, structures and infrastructures. Danish development assistance to Palestine is delivered in a context that has been characterized by a high level of corruption and other forms of mismanagement. However, recent reports to the AHLC by the IMF generally underline the significant achievements by the Palestinian Authority in relation to improvements within public financial management. These achievements should be safeguarded as they constitute a critical and positive basis for the continued delivery of Danish development assistance to Palestine. As mentioned above, many of the risks associated with the Danish engagement in Palestine are linked to the outcome of the peace process and overall nature of the Palestinian-Israeli relationship. As a relatively small actor in this respect, Denmark will have to be realistic about the ability to influence these processes. This also relates to the ability to mitigate the risks. However, within the overall peace-building approach, the Danish engagement aims to facilitate the conditions for peace. Regarding the operational risks, the on-going reform dialogue between Denmark and the key Palestinian actors is essential, in close cooperation with likeminded countries, the EU and the UN. Denmark s support for the Palestinian Anti-Corruption Commission is also part of the mitigating factors. 14 P a g e

15 Annex 02: Partners brief description Engagement Title PEGASE Implementing partner - brief description The European Commission / Office of the European Union Representative in Jerusalem (EC) The EC works with the PA to build up the institutions of a future democratic, independent and viable Palestinian State living sideby-side with Israel in peace and security. The EU supports the implementation of a two-state solution based on the 2003 Roadmap for Peace. These efforts are regularly debated by the EU Council of Ministers. The PA is a full partner within the European Neighbourhood Policy (ENP). A joint EU-PA Action Plan concluded in 2005 set the agenda for economic and political cooperation with the EU. The legal basis for the EU s relations with the PA is the Interim Association Agreement on Trade and Cooperation signed with the PLO on behalf of the Palestinian Authority. The EC is the implementing partner of Denmark s contribution to PEGASE and will thus be responsible for the day-to-day management of the programme. The channel of implementation of the DFA will be the PEGASE mechanisms. The mechanism is managed by EC staff backed by technical assistants and externally hired IT and auditors firms. Municipal Development Programme The Municipal Development and Lending Fund (MDLF) through a World Bank Multi-Donors Trust Fund (TF071898): The MDLF is in charge of implementing policies developed by the Ministry of Local Government. It is a semi-government institution that manages funds to enable municipalities to provide quality services and achieve sustainable development in harmony with national plans and policies. The MDLF was established by a decision of the Council of Ministers in 2005 as an autonomous entity to accelerate Palestine s drive toward self-sustained, decentralized, prosperous, and creditworthy local government. MDLF aims to assist municipalities in fulfilling their mandates as front line service providers to their communities by providing them with a transparent and efficient channel of financing and technical assistance. Its Board of Directors is chaired by the Minister of Local Government. It includes members from Ministry of Planning and Administrative Development, Ministry of Finance, Association of Palestinian Local Authorities (APLA) and civil society organizations. 15 P a g e

16 NAD PLO s Negotiations Affaires Department (NAD): The NAD was established in 1994 to support the Palestinian Negotiation process between the PLO and Israel. It reports to the Chairman of the PLO, Mr. Mahmoud Abbas. NAD s vision is: the realization of the rights of the Palestinian people to selfdetermination and independence with human rights and international law and resolutions. It is a PLO arm made up of advisors who provide legal, policy and communications advice to the Palestinian leadership as it strives to achieve Palestinian rights. Through research, analysis, and by utilizing local and international talents and resources, NAD presents various technical and professional strategic options to the leadership. NAD s work is defined by its commitment to professionalism and respect for human rights and the international law. DHIP Danish House in Palestine (DHIP): The DHIP is a non profit, non governmental organization. It aims to increase mutual understanding and strengthen bilateral relations between Danes and Palestinians and to strengthen Palestinian civil society by developing creative frameworks for intercultural cooperation and connection. DHIP works in the areas of vocational and professional exchange, cultural and educational development, and organizes a broad range of cultural activities. ince its inception in September 2010, DHIP has developed a successful track record of activities several Danish Palestinian vocational exchange projects; international volunteer program; as well as a wide variety of cultural and educational activities, including concerts, film screenings, workshops, exhibitions, couch talks, and roundtable discussions. All activities have been carefully designed, branded, and documented (website, press releases, media coverage, new media, newsletter, and annual report). 16 P a g e

17 OXFAM OXFAM GB: Oxfam GB is well placed to ensure a robust implementation of this project given the vast experience it has in implementing large scale complex programmes in the opt and Israel as well as globally. Oxfam has worked on economic development initiatives in the opt and has developed considerable expertise in value chain programming globally. Learning from these experiences will be applied on this project. Oxfam GB also has experience of implementing large-scale Danida-funded projects in Sudan and Yemen (income generation, microcredit and women economic empowerment). Its Regional Centre in Oxford GB is familiar with supporting all financial and narrative reporting requirements by Danida. Oxfam GB s budget in opt/israel is approximately 6mio. GBP (approximately 53 mio. DKK) annually. Oxfam GB delivers a range of projects including food security & livelihoods and Public Health interventions funded by ECHO, Christian Churches UK (Bruderhof Foundation), EC, Disasters & Emergencies Committee, Austria Aid and DfID amongst others. Area C The European Commission / Office of the European Union Representative in Jerusalem (EC): The EC is the implementing partner of Denmark s contribution to Area C programme. The MDLF will be responsible for the dayto-day management of the programme. 17 P a g e

18 Annex 03: Results framework Results framework of the state building thematic programme Thematic Programme Thematic Programme Objective Impact Indicator Engagement Title Support for State-building To support state-building in Palestine based on good governance, democracy and human rights by helping Palestinian reformers to build effective, accountable and viable state institutions capable of engaging productively with the people to promote peaceful and sustainable development. Maintained and improved access of Palestinians to quality essential public services. East Jerusalem Hospitals (EJH) to continue to provide health care services to the Palestinian people. PEGASE Direct Financial Support (DFS) (Partners: EU Commission, PA Ministries) To maintain the viability of the two-state solution by ensuring PA fiscal consolidation, sustaining basic living conditions of Palestinians, and ensuring that funds channelled to the PA have greater impact in terms of service delivery, policy leverage and development effectiveness. Outcome indicator By providing essential services and salaries to Palestinians living in PA-administered areas, the PA is able to improve standards of living, enhance prospects for political stability, and consolidate its own future. Baseline Year 2013 EU funds provided to the PA via PEGASE DFS directly benefit approximately 71,000 Palestinian civil servants and pensioners. PA arrears for referrals to six East Jerusalem Hospitals (EJH) amount to US$42 million. Target Year 2015 Continued support provided to the PA through PEGASE DFS in line with PA implementation of a zero net hiring policy to reduce its wage expenditure bill. Reduction of PA arrears to EJH* 1 Output indicator Number of civil servants and pensions directly benefiting from PEGASE DFS Baseline Year ,000 civil servants and pensions benefit from support provided to the PA through PEGASE DFS Target Year 2015 Continuation of support to 71,000 civil servants and pensions (Discussions between PEGASE DFS mechanism and the PA is still outstanding regarding reducing the number of PA civil servants, and a clear exist strategy for PEGASE DFS). Output indicator Reduction of PA debt to EJH Baseline Year 2013 Outstanding PA debt to EJH is US$42 million. Target Year 2015 Outstanding PA debt to EJH reduced Outcome indicator Development effectiveness of financial aid provided to the PA via PEGASE DFS is improved Baseline Year 2013 Weak coordination and donor harmonisation, particularly on M&E, between funds provided to the PA through PEGASE DFS, the World Bank Trust Fund and by other 1 EU is still working on getting member state donors to contribute to EJH window in PEGASE DFS, therefore the reduction in PA debt to EJH by 2015 is still not clear. 18 P a g e

19 direct financial assistance donors. PEGASE DFS lacks a more coherent and structured focus on results Weak PA indicators, targets and M&E related to the PNDP hinder greater donor alignment with national development strategies. Target Year 2015 Meetings between PEGASE DFS, the WB TF and direct financial assistance donors take place at least quarterly, leading to enhanced policy dialogue leverage in such areas as PA fiscal consolidation, more efficient service delivery and private sector reforms. Move towards a results-oriented approach of PEGASE DFS completed Finalisation of PNDP M&E Framework used to improve donor alignment with national priorities. Output indicator Improved synergies between PEGASE DFS, the WB TF and direct financial assistance donors to the PA Baseline Year 2013 Limited coordination aimed at harmonising funds provided to the PA via PEGASE DFS, the WB TF and direct donor assistance. Target Year 2015 Quarterly meetings between donors and greater synergies achieved between the different funding mechanisms, leading to improved policy dialogue leverage with the PA. Output indicator Results oriented approach to PEGASE DFS in place Baseline Year 2013 No results oriented approach to PEGASE DFS currently in place Target Year 2015 A clear results oriented approach to lead PEGASE DFS interventions promoting to proper PA public financial management systems, improved budget planning, increased transparency and strengthened control over PA expenditures. Output indicator Credible M&E system embedded in PNDP with smart and focused indicators. Baseline Year 2013 No formal M&E framework for the PNDP , compounded by weak M&E Department in MoPAD. Target Year 2015 Formal M&E framework for PNDP produced with clear and measurable indicators and targets Outcome indicator The fiscal sustainability of the PA is improved Baseline Year 2013 The PA continues to face an unsustainable budget deficit leading to increased PA debt Existing PA revenue streams fall well below PA expenditures PA partly finances its budget deficit through the accumulation of arrears to the private sector. Target Year 2015 Continue to maintain a zero net hiring policy to contain the size of the public sector wage bill Revenue reforms undertaken aimed at widening PA tax base and enhancing tax compliance, including a 15% increase in the number of taxpayers; the introduction of a 10% dividends tax; doubling the number of taxpayers registered under the Large Taxpayers Unit; as well as amendments introduced to the Investment Promotion Law to eliminate inefficient tax loopholes. Reduction of PA reliance on private sector through 19 P a g e

20 improved revenue collection 2 Output indicator Lower PA budget deficit Baseline Year 2013 The PA s fiscal deficit reached NIS5.66 billion Target Year 2015 Lower PA expenditures achieved via continued implementation of zero net hiring policy by PA to contain wage bill, and reductions in transportation and supervisory allowances. Output indicator Enhanced PA revenue streams Baseline Year 2013 PA revenue streams fall well below PA expenditures Target Year % increase in the number of taxpayers; the introduction of a 10% dividends tax; doubling the number of taxpayers registered under the Large Taxpayers Unit; as well as amendments introduced to the Investment Promotion Law to eliminate inefficient tax loopholes Output indicator Reduction in PA arrears to the private sector 3 Baseline Year 2013 PA arrears owed to the private sector totalled approximately NIS570million (or 32% of total domestic arrears). Target Year 2015 Reduction of PA reliance on private sector through improved revenue collection and tax revenue reforms 4 Engagement Title Municipal Development Programme (Partners: Ministry of Local Government and Municipal Development and Lending Fund) To increase the efficiency of the Municipal Development and Local Governance sector and initiate required reform. Outcome indicator Service delivery and infrastructure projects improved and implemented in the municipalities through performance-based grants (Window 01) Baseline Year 2013 Needs identified in 4 areas of service provision: water network, wastewater network, paved roads, and lighting units. None of the municipalities applies social accountability measures. Target Year municipalities improving their performance category. Up to 25% of the needs are covered in the 4 mentioned areas. 85% of municipalities applying social accountability measures. Output indicator Number of municipalities improving their performance category. Baseline Year Target Year municipalities that graduate up from the performance category in which they were in Output indicator Number/Km of rehabilitated water networks Baseline Year 2013 Outdated water network in 58 municipalities. Target Year 2015 Rehabilitation of 6.5 km water network in 5 municipalities. Covering 25% of the needs Output indicator Length of wastewater network built Baseline Year 2013 Need for extra 519 Km of wastewater network. Target Year 2015 Building 21 Km of wastewater network. 2 EU is currently working with the PA on tax revenue reforms 3 According to IMF latest report issued in September 2013, PA debt to banks stood at 112% of banks equity at end of 2012, but has since declined to 105 percent as of end of June 2013 (which accounts to 48% of banks total loan portfolios). 4 EU did not provide exact figures on how much they are aiming to reduce PA debt to private sector as this is dependent on increasing PA revenue 20 P a g e

21 Covering 4% of the needs Output indicator Length of paved road within the municipalities boundaries Baseline Year 2013 Need for extra 534 km of paved roads. Target Year 2015 Paving 162 Km of roads. Covering 30% of the needs Output indicator Number of lighting units in municipalities Baseline Year 2013 Need for of lighting units Target Year 2015 Providing lighting units Covering 4% of the needs. Output indicator Percentage of municipalities applying social accountability measures and public disclosure mechanisms Baseline Year Target Year % of municipalities applying social accountability measures and public disclosure mechanisms Outcome indicator Number of activities supporting amalgamation and innovation (Window 02) Baseline Year Target Year amalgamated municipalities supported and 8 innovative ideas implemented. Output indicator Number of amalgamated municipalities supported Baseline Year Target Year amalgamated municipalities supported Output indicator Number of innovative projects implemented Baseline Year Target Year innovative ideas implemented such as: renewable energy, e-municipality, LED - Local economic development...) Outcome indicator Number of municipalities with improved capacities (Window 03) Baseline Year Target Year municipalities with improved planning capabilities and technical capacities Output indicator Number of municipalities that updated their Strategic Development and Investment Plan (SDIP) Baseline Year Target Year municipalities with updated SDIPs. Output indicator Number of municipalities having an Operational and Maintenance Manual Baseline Year municipalities Target Year municipalities Outcome indicator Increased aid effectiveness in the Municipal Development and Local Government (MDLG) sector. Baseline Year 2013 Need for a greater aid effectiveness 18 donors funding mechanisms Target Year 2015 Increased aid effectiveness - donors funding mechanisms Output indicator Mainstream Danish interventions in the MDLG sector Baseline Year different Danish activities/interventions in the MDLG Target Year 2015 MDP is the only Danish intervention to support MDLG 21 P a g e

22 Engagement Title Outcome Outcome indicator (1) Baseline Year % Target Year % Palestinian Negotiation Support Project Palestinian leadership empowered for effective negotiations with Israel and for engagement with the international community and in diplomatic efforts and implementation of agreement between Palestine and Israel. Percentage of population reporting positive perception of Palestinian negotiation positions. Outcome indicator (2) Positive Stakeholder (local and international) views of NAD (annual focus groups and or surveys, one for diplomats and one for leadership. Baseline Year % Target Year % Output 1 Effective technical assistance to the Palestinian leadership (and related line ministries in case of agreement reached). Output indicator (1.1) Up-to-date high quality Reference Guides on negotiation issues available (High quality defined as current, comprehensive, covering the main issues and seen as useful). Baseline Year (2 relatively new) Target Year Output indicator (1.2) Number of Strategy or position papers and presentations produced on negotiations issues (Water, border, refugees etc.). Baseline Year Target Year Output indicator (1.3) Baseline Year % Target Year % Percentage of negotiators-file bearers at least satisfied with availability of high quality RGs, position papers, presentations etc. produced by NAD advisers. Output indicator (1.4) Percentage of meetings total of advisors` working hours spent with negotiators /assisting in implementation of agreement. Baseline Year % Target Year % Output 2 Coherent and effective messages delivered in support of negotiations, Palestinian positions and or implementation of agreement. Output indicator (2.1) Quality (positive perception) of presentations, press releases, opening editorials, fact sheets, question and answer sheets etc. produced. Baseline Year % satisfied. Target Year % satisfied. Output Total number of hits on NAD website annually. indicator (2.2) Baseline Year 2013 Information to be provided by NAD Target Output 3 Year % increase from December Enhanced national ownership to promote effective support for negotiations 22 P a g e

23 and beyond. Output indicator (3.1) Percentage of consultancy provided by local advisers/ consultants (based on total number of consultancy days - local compared with international). Baseline Year % Target Year % Output Percentage of PNSP budget provided by PLO-Government. indicator (3.2) Baseline Year % Target Year % Output indicator (3.3) Gender Balance: Percentage of females compared to males in staffing, media engagement and others. Baseline Year % Target Year % Engagement Title Danish House in Palestine Outcome indicator Support the establishment of a Danish-Palestinian House to provide more accessible cultural heritage activities to Palestinians and thus strengthening the Palestinian national identity Baseline Year 2014 Unstructured cultural activities in Palestine and no welldefined strategic orientation for the House Target Year 2016 A Danish-Palestinian House to be the main vehicle for all Danish culture development activities in Palestine. The House will have a strategic orientation focused on cultural activities and cultural heritage. Output indicator Young Palestinians have greater insight and understanding of their cultural heritage and Danish students have learned about the Palestinian cultural heritage. Baseline Year 2014 Few exhibitions in DHIP and limited knowledge in the Palestinian society of the existence of DHIP (?). Need for a place where Palestinians are able to inform and learn about their history and traditions, as well as being able to articulate their (alternative) stories and national identity to the international society. Target Year exhibitions about Palestinian cultural heritage, their traditions, their history etc. have been held in the House. 6 Danish and 6 Palestinian volunteers have organised the exhibitions and informed the local as well as the Danish society about the activities and objects on display. Output indicator More Palestinian museums have exhibitions of their cultural heritage and increased number of visitors. The associated staff has gained knowledge on preserving the objects as well as organising exhibitions. (partner: women s museum in Denmark) Baseline Year 2014 The Palestinian cultural heritage is in danger of eroding due to inadequate knowledge on preserving Target Year museums have had exhibitions and the associated staffs have learned preserving the objects adequately as well as organising exhibitions. Output indicator Young Palestinians have greater insight and understanding of their cultural heritage and Danish students have learned about the 23 P a g e

24 Palestinian cultural heritage. More people have gained knowledge about the online photo archive both locally and internationally. (Partner: BZU Palestinian archive project) Baseline Year 2014 Many photos of Palestinian culture are being stored by private persons and not being preserved properly Target Year Palestinians and 5 Danish students (volunteers) have participated in the work of developing the online photo archive and preserving photos. More people internationally and locally are familiar with the photo archive and XXX photos are available online. Output indicator Palestinian women are being taught how to use their traditional embroidery in a contemporary context, make new product that are cheaper and appeal to a larger target group. Danish design students gain knowledge on the traditional Palestinian design and history behind it, putting more international focus on the Palestinian design. Baseline Year 2014 A need for rethinking traditional Palestinian embroidery into a contemporary context with broader appeal. 2 students from the Danish Design School have engaged in workshops with Palestinian designers learning about the traditional Palestinian embroidery. Target Year Palestinian women have gained knowledge in rethinking their craft work to appeal to a broader target group. 6 Danish design students have gained knowledge on the traditional embroidery and history behind it. (Potentially more focus on Palestinian design from Danish designers and the Danish fashion houses) 24 P a g e

25 Results framework of the economic development thematic programme Thematic Programme Thematic Programme Objective Impact Indicator Engagement Title Support for Economic Development To increase Palestinian economic sector responsiveness to the deteriorating economic conditions and potential political solutions to the Israeli-Palestinian conflict Creation of an enabling environment for businesses to grow in the agricultural, dairy and ICT sectors, with improved quality and quantity of production and increased market access and growth in demand for local products. Oxfam (Partners: Oxfam, local NGOs and MSMEs) To increase participation in user-driven market systems for female and male small and medium scale producers and processors in the diary and agriculture sectors and IT graduates in the Gaza Strip Outcome indicator Improved enabling environment for local economic development in Gaza within the agriculture, dairy and ICT sectors. Baseline Year 2013 Weak representative body that represents small scale farmers and producers, especially women farmers. Absence of national strategy for local development, including standards, regulations and public-private dialogue for agriculture, dairy and ICT sectors. Absence of a national quality seal, therefore low competitive advantage of local products. Socially constructed gender roles; lack of access of women to markets, financial capital and technical and business capacity building opportunities. Target Year 2017 The capacity of the representative body for small scale producers and farmers is improved and its role to represent the right of women producers and farmers is strengthened. A local economic development framework and strategy for Gaza is developed. Introduction of a national quality seal. Increased economic empowerment of women within the agriculture, Dairy and ICT sectors. Output indicator Interests of small scale producers and processors better represented Baseline Year 2013 Weak role of small scale famers and producers, especially women, representative bodies in Gaza Target Year 2017 The capacity of the representative body for small scale producers and farmers is improved and its role to represent the right of women producers and farmers is strengthened Output indicator A framework for sustainable local economic development which would guide the development of the Local Economic Development (LED) Strategy is formed Baseline Year 2013 Absence of a national strategy for local development in Gaza Target Year 2017 A national strategy for Local Economic Development is developed Output indicator Increased competitiveness of local Palestinian agriculture, dairy and ICT products Baseline Year 2013 Absence of a national quality seal, therefore low competitive advantage of local products 25 P a g e

26 Target Year 2015 Introduction of a national quality seal Output indicator Palestinian women empowerment and leadership within the market system is enhanced Baseline Year 2013 Lack of access of women to markets, financial capital and technical and business capacity building opportunities Target Year 2017 Increased economic empowerment of women within the agriculture, Dairy and ICT sectors Outcome indicator Increased and improved more equitable market based production in the dairy, agriculture and ICT sectors Baseline Year 2013 Limited production capacity and competitiveness of the Palestinian productive sector, compounded by lack of business skills and knowledge in efficient processing methodologies Lack of formal quality procedures and low number of food and dairy processors and ICT businesses producing certified products Lack of access to quality support services, capacity building and necessary training High cost of quality production inputs in addition to lack of access to crucial inputs included in Israel s dual-list of banned products for import Lack of access to finance for inputs and equipment Target Year 2017 Increased production capacity and improved competitiveness of products of 600 small scale farmers and 90 cow breeders Increased number of food and dairy processors and ICT businesses producing and selling certified products and services Capacity building and technical training provided to PFIU member businesses, PITA member companies, Micro, Small and Medium Enterprises (MSMEs), UCAS ICT graduate businesses, ICT students and recent graduates, and agricultural students and recent graduates Limited provision of inputs to farmers and milk producers Improved access to finance Output indicator Increased relative competitiveness of products and production capacity of small scale farmers and cow breeders Baseline Year small scale farmers received training and coaching in business administrative skills, in addition to technical training in optimal and safety use of pesticides, water/soil management, irrigation, new technologies of cultivation, crops diversification and recycling of agricultural waste. 90 small scale livestock owner farmers receive training and coaching in business administrative skills, in addition to technical training and coaching to improve their milk production levels 5 Target Year small scale farmers receive training and coaching in business administrative skills, based on current needs 90 small scale livestock owner farmers receive training and coaching in business administrative skills, based on current needs small scale farmers and 90 small scale cow breeders received training in phase I of OXFAM project in Gaza. The numbers shown in the 2017 target year, reflect the target group which phase II of this project will address. This applies on all the remaining outputs. 26 P a g e

27 Output indicator Increased number of food and dairy processors and ICT businesses producing and selling certified products and services Baseline Year 2013 Rehabilitation and technical support to 2 existing mediumsize food processing units 3 new women-led small scale food processing units established Zero food processing cooperatives / NGOs 20 ICT start-up businesses incubated 8 food processing businesses received training in production cycle management, technical production techniques and green energy options for processing 5 dairy processing businesses received technical training Target Year 2017 Rehabilitation and technical support to 2 further existing medium-size food processing units (total of four) 4 new women-led small scale food processing units established (total of 7) 2 food processing cooperatives / NGOs (total of 2) one of which is a women s cooperative 20 further ICT start-up businesses with female focus incubated (total of 40) 22 further food processing businesses received training in production cycle management, technical production techniques and green energy options for processing 7 more dairy processing businesses received technical training Output indicator Capacity building and technical training provided to PFIU member businesses, PITA member companies, Micro, Small and Medium Enterprises (MSMEs), UCAS ICT graduate businesses, ICT students and recent graduates, and agricultural students and recent graduates Baseline Year PFIU members received capacity building and technical training Zero PITA member companies received capacity building and technical training Zero Micro, Small and Medium Enterprises (MSMEs) received capacity building and technical training Target Year PFIU members received capacity building and technical training 80 PITA member companies received capacity building and technical training 350 Micro, Small and Medium Enterprises (MSMEs) received capacity building and technical training Output indicator Improved access and availability of needed inputs for production Baseline Year 2013 High cost of quality production inputs in addition to lack of access to crucial inputs included in Israel s dual-list of banned products for import Target Year 2015 Limited provision of inputs to farmers and milk producers Output indicator Improved access to finance by micro businesses Baseline Year 2013 Lack of access to finance for inputs and equipment Target Year 2017 Barriers met by micro entrepreneurs and women in access to micro finance loans are identified A third party provision of funds based on group lending is explored 27 P a g e

28 Outcome indicator Improved growth and demand for local products Baseline Year 2013 Low rates of consumer confidence and willingness to purchase locally produced goods among consumers in Gaza Lack of marketing delivery capacity in agriculture, diary and ICT sectors Limited market information exists on demands, trends, consumer preferences and behaviour as well as market shares and market process Target Year 2017 Gaza ICT, diary and agriculture products are increasingly recognised by local value chain forums and clients as marketable products both inside and outside the Gaza strip Output indicator Improved perception amongst consumers of the value of local products and services, and benefits to local economy Baseline Year 2013 Low rates of consumer confidence and willingness to purchase locally produced goods among consumers in Gaza Target Year 2017 Improved perception amongst consumers of the value of local products and services, and benefits to local economy through developing a second phase of the Buy-Local campaign that was introduced in phase one. Output indicator Strengthened marketing skills and activities of processors and sector businesses Baseline Year 2013 Lack of marketing delivery capacity in agriculture, diary and ICT sectors Target Year 2017 Strengthened marketing skills and activities of processors and sector businesses Output indicator More information exists on demands, trends, consumer preferences and behaviour as well as market shares and market process Baseline Year 2013 Limited market information exists on demands, trends, consumer preferences and behaviour as well as market shares and market process Target Year 2017 Detailed market research conducted for the ICT, fresh vegetable processing and Dairy sectors, in addition to the development of new web-based market access hubs for market information, analysis, research, publications and accessibility Outcome indicator Improved and sustainable business support and development services Baseline Year 2013 Recent business graduates lack soft skills and good practice techniques in management, marketing and administrative business procedures. Limited access to business support services, as well as business skills training Lack of access to adequate market information to assist decision making Target Year 2017 Provision of technical training to ICT students and recent Output indicator graduates, and agricultural students and recent graduates Establishment of an Agricultural Development Centre is supported through this second phase (sharing up to 32% of total establishment cost) Improved access to market information to assist businesses in decision making Technical training provided ICT students and recent graduates, and 28 P a g e

29 agricultural students and recent graduates Baseline Year ICT final year students and recent graduates received capacity building and technical training Zero agricultural students and recent graduates received capacity building and technical training Target Year ICT final year students and recent graduates received capacity building and technical training 50 agricultural students and recent received capacity building and technical training Output indicator Establishment of an Agricultural Development Centre is supported through this second phase Baseline Year 2013 Limited access to business support services, as well as business skills training Target Year 2017 An Agricultural Development centre will be developed promoting three model units that include demonstration sites for students, farmers and open access to agribusinesses to test for optimum crops and incubate three ICT Agricultural innovative feasible start-up ideas n Output indicator Improved access to market information to assist businesses in decision making Baseline Year 2013 Lack of access to adequate market information to assist decision making Target Year 2017 A monthly issue continue to be issued (as in phase one)with an update on the imports and exports of Gaza Strip and this informative data is shared with relevant stakeholders on a regular basis for research, decision making and advocacy purposes Engagement Title (immediate objective) Area C (Partner: EU Commission and local CSOs) Empower Palestinian community anchorage in Area C with basic services including community development projects, small scale infrastructure and social infrastructure projects. and thus help maintaining a continued Palestinian presence in Area C. Outcome indicator TBD - Empower Palestinian community anchorage in Area C Baseline Year ,168 inhabitants with limited access and economic development severely constrained in the targeted communities in Area C. Target Year Rehabilitation of 8.35 km of roads. - Construction of 560m² of school and 8 of class rooms. - Construction of 285m² of multi-purposes community buildings. - Construction and finishing of 360m² of kinder garden. - Construction of play grounds and public gardens in a total of 3900m². Construction and expansion of 2.7 km of water networks, and installation of electricity transformer, 29 P a g e

30 30 P a g e

31 Annex 04: Budget DKK mio. Engagement Title 1. State Building & Citizens Rights Commitment (mio DKK) Disbursement (mio DKK) PEGASE MDP 2 Cycle NAD DHIP Economic Development Oxfam WBGS Area C Others Programme Coordinator Increase grants Gaza NGO Formulation & Reviews Total P a g e

32 Annex 05: Risk management matrix Contextual Risks Risk factor Likelihood Background to assessment Impact Background to assessment Risk response if applicable / potential effect on development cooperation in context C.1 Deteriorating conflict between Israel and Palestine. Likely The failure of recent negotiations has reinforced public disenchantment with the peace process, while lack of progress continues to imperil the latter's ability to sustain a viable political horizon. Tensions are likely to increase between Palestinians and Israelis should a political solution appear impossible. In particular, the impact of continued Israeli settlement construction on prospects for establishing a viable Palestinian state makes the status quo unsustainable. Alongside settlement construction, increased settler violence, a rise in Palestinian fatalities amid more frequent protests, rising Major Deterioration in the conflict could well result in Israel intensifying restrictions on movement and access and other measures it currently imposes in the opt. In turn, this could lead to a rapid deterioration in humanitarian conditions, forcing a change in programme focus from development to humanitarian aid and greater service delivery. At its worst, it could also lead to the scaling down or even closure of donors' activities for security and political reasons. Under any of these scenarios, the gains made by the PA in terms of state building and good governance both at the national and local level could well be reversed. Close monitoring of developments on the ground in coordination with other development partners will be crucial. So too will be the need to raise preparedness among the donors and partners to meet humanitarian needs should the conflict worsen. Programme flexibility, a continued commitment to local governance, and the inclusion of unallocated funds, will all enable the DRO to respond to any deterioration on

33 C.2 Security degradation due to external and internal factors: Likely unemployment especially among youth, the fiscal crisis facing the PA and worsening humanitarian conditions in the Gaza Strip, could also spark renewed conflict. So too could Palestinian reconciliation. However, a return to full scale violence is deemed unlikely. Rather, both sides are likely to resort to unilateral measures should negotiations remain at a stalemate. Israel will likely keep up the current pace of settlement construction, while the PA has threatened to return to the UN. On the ground, a broader movement based on popular non-violent resistance could materialise among Palestinians. For reasons described above, the security situation is likely to become more precarious in the absence of a return to negotiations. Current attempts at Palestinian reconciliation, including Major The impact is assed to be major as an unstable security situation can deteriorate the general operational conditions, resulting in certain cases of closing down activities. 33 P a g e the ground in a timely and efficient manner. It is envisaged to create greater flexibility in designing the transitional programme and assess systematically

34 C.3 Political change resulting from reconciliation efforts between Fatah and Hamas Unlikely the establishment of a new unity PA, as well as plans to hold PA elections in 2015, could also become a flash point for renewed tension, both with Israel, which has made clear its opposition to Palestinian reconciliation, as well as between Fatah and Hamas. Should Israel tighten existing restrictions in the opt, or step up its efforts to annex Area C, this will also lead to heightened insecurity for Palestinians. The newly formed technocratic government endorsed by Fatah and Hamas has already committed to continue the political programme of previous PA governments, and to honour PLO agreements with Israel. Should PA elections result in a Hamas dominated government without the organisation having altered its political platform, or a unity Fatah- Hamas government, some changes in government Major Danish development policy prohibits cooperation with or providing development assistance to a Palestinian government that does not endorse PLO international commitments. 34 P a g e security conditions. Close monitoring of political developments including PA policies and strategies, will better position the DRO to respond to changed circumstances on the ground, while it will be important to simultaneously ensure that the Palestinian leadership is well aware of possible

35 policy and practice are likely to result, some of which could be in conflict with Danish development priorities. However, it is unlikely that either Hamas or Fatah will want a repeat of the 2006 international suspension of aid to the PA. repercussions of policy choices that are inconsistent with Danish development policy. Current Danish assistance to the PA is channelled through PEGASE, which allows for continued funding even in the event of a Hamas dominated PA. Moreover, the transitional programme is designed to respond to possible changes in government as it uses multilateral agencies and CSO's. Closing down activities and engagement programmes could be envisaged. 35 P a g e

36 Programmatic Risks Risk factor Likelihood Background to assessment of likelihood Impact Background to assessment to potential impact Risk response Combined residual risk P1. Reform paralysis Almost certain While committing to the reform process, the new technocratic government of the PA is unlikely to push new initiatives given its short duration. Its main mandate is instead to prepare for new PA elections in This may change if PA elections are deferred. If they are not, the preelections period is likely to divert attention away from the reform process, while a new PA government that includes Hamas could lead to a change in official PA policies. A deterioration of the conflict is also likely to detract from the reform process. Major Continued reform rests on the full commitment and cooperation of the PA, and includes continued efforts to strengthen the latter's capacity. A change in PA priorities, or a weakening of the PA amid renewed violence, would jeapodise the reform process and simultaneously reduce the effectiveness of existing programs. To mitigate reform paralysis risk, it is envisaged to further strengthen the policy dialogue with the Palestinian Authority using three main avenues: Bilaterally and EU; SWG; and CSOs. Major 36 P a g e

37 P2. Corruption through misappropriation of funds intended for programmatic operations and other instances of malpractice among implementing partner institutions. P3. Weak human rights, democracy and social accountability: Likely Almost certain Despite efforts made by the PA and donors to counter misappropriation of funds, corruption remains a significant risk. The lack of proper institutional checks and balances or an independent judiciary to counter corruption means that the misappropriation of funds will remain a distinct possibility. Given the suspension of peace negotiations and the possibility of heightened tensions going forward, human rights violations and weak human rights protections will likely remain the norm. The possibility does exist that Palestinian reconciliation could see political and civil rights improve in Palestinianadministered areas. Any escalation in the conflict, whether between Israel and Major Major To counter the risk of corruption, complex funding mechanisms are incorporated into programmes to ensure accountability and transparency. These add considerably to administrative and transaction costs. In some instances, corruption could even threaten the continuation of programmes. Continued human right violations and lack of democracy and social accountability affects the programme and the achievements of its objectives especially with regards to environment, marginalised groups integration and gender equality. The inclusion of independent funding mechanisms into programme design that ensure transparency, mitigates against the threat of corruption. This includes the use of multilateral trust funds managed by the World Bank. The DRO will continue to adopt a HRBA at all levels of programme implementation and monitoring. Both individually and in concert with other donor partners (as part of greater donor coordination and harmonisation), the DRO will also engage in a strong policy dialogue with Israel, PA and programme Major Significant 37 P a g e

38 P.4 Deteriorating operational conditions in Gaza, including impact of military occupation, blockade and closures Likely Palestinians or between Fatah and Hamas will lead to a deterioration in human rights The situation in Gaza continues to be precarious and nonsustainable and is characterized by recurrent crises, of which the latest one is on-going. The continued Israeli restrictions create very difficult conditions for both Palestinians as well as humanitarian actors. Poverty rates continue to require important humanitarian response. Minor The state building programme is de facto mainly focused on the West Bank. The economic development programme engages small businesses where there is demand and supply of raw materials and should therefore be relatively resilient. However, major crises as the on-going, interrupt all activities. partners, including CSOs, concerning the importance of upholding human rights. The DRO will also continue to support key human rights organisations operating in the opt. Regular monitoring of the situation in Gaza and adjustment of programme interventions as necessary. Minor 38 P a g e

39 Institutional Risks Risk factor Likelihood Background to assessment of likelihood Impact Background to assessment to potential impact Risk response Combined residual risk I1. Inadequate PA ownership and failure to sustain results Likely Greater donor coordination and harmonisation, and increased aid effectiveness, all rest on national leadership and oversight over development priorities. While some gains have been made in terms of strengthening PA oversight and coordination, significant gaps remain. Many ministries lack capacity in the areas of policy development and coordination, including both the MoLG and MoPAD, threatening to weaken development outcomes. Shortfalls also exist in terms of intra-pa coordination, fiscal management, transparency and accountability, rule of Major The impact is assessed to be major as the lack of PA ownership would affect strongly the sustainability of the programme and the ability to achieve the expected results. The DRO is using its role as lead donor in the local government sector to step up efforts to achieve greater donor alignment with national priorities listed in the PNDP , and donor harmonisation in those instances where PA coordination is weak. This is complimented by ongoing support for PA reform designed to strengthen both policy development and coordination among other things. Choice of DRO programmes prioritises both. Major 39 P a g e

40 law, and human rights. I2. Donor operations: Weak donor harmonisation, changing donor priorities, slow approval and transfer mechanisms Likely Given the sheer volume of donors that operate in the opt, and the political charged nature of the Palestinian-Israeli conflict, donor coordination and harmonisation remains challenging. Donors tend to accommodate their own national development priorities, as well as political preoccupations, in their choice of what programmes to support. Some donors also continue to shun joint funding and programming arrangements, weakening aid effectiveness. This results in changing priorities and slow approval and heavy transfer mechanisms. Major Weak donor harmonization can lead to duplication of programs, loss of scale, the neglect of certain development priorities, and reduced aid effectiveness. All can weaken the effectiveness of Danish aid assistance. Greater efforts towards donor coordination will be pursued (see above). This includes policy dialogue and further mapping exercises to identify areas at risk. Major 40 P a g e

41 Annex 06: Summary of appraisal recommendations Title of (Country) Programme File number Danish Palestinian Partnership Programme Pal.54. Appraisal report date 10 June 2014 Grant Committee meeting date 19 August 2014 Summary of possible recommendations not followed (to be filled in by the Mission) The appraisal suggested adding DKK 25 million as unallocated funds to ensure flexibility to be able to respond quickly to political engagements, as emphasized in the Danish-Palestinian Partnership Following discussions with senior management the need for flexibility will be provided by specific appropriations on a case-by-case basis. Overall conclusion of the appraisal The TP integrates prioritised Danish development engagements in Palestine under the pillars of State Building and Economic Development. It supports the integration of the political and developmental tracks supported by Denmark and Palestine. It ensures continuity and represents a leaner, more robust and more focused development approach with synergies between the two pillars of engagement. The TP has many engagements in support of State Building based on experienced partners and well known activities. The overall budget is in favour of State Building, but investments in municipal infrastructure under State Building also have economic development benefits. Engagements in Economic Development are fewer but the TP will identify and design more comprehensive engagements for the post 2015 Danish- Palestinian partnership. The TP will face many risks including contextual, institutional and programmatic risks. There is a need for strengthened programme coordination to manage an ambitious programme under difficult political and donor circumstances. This will require additional technical and professional resources at the DRO to ensure there is coherence and coordination of activities at the same time as being lead donor in the local government sector. There is need for budget flexibility in terms of unallocated funds to respond to requests from the PA on matters arising from the changing political, security and economic circumstances. Recommendations by the appraisal team Follow up by the Representation 1. Country programme Level: 1. Justification and rationale of the country programme, preparation process and strategic linkages between country programme vis-à-vis the country policy document.

42 1.1 The TP should be managed by the DRO based on an overall country programme agreement with the Ministry of Planning and Development (MoPAD). Annual Consultations between DRO and MoPAD should constitute the overall management mechanism of the TP. (AR 7) 1.1 It is agreed with MoPAD that a memorandum of understanding (MoU) is to be agreed-upon and signed by both parties (DRO & MoPAD). It has also been agreed to re-start annual consultations. 2. Thematic Programme Level: 2. Consideration of relevant Danida strategies. 2.1 n/a 2.1 n/a 3. Proposed thematic programme support design including rationale, effectiveness, efficiency, impact and sustainability and partner choices While acknowledging the long-term perspective of the TP s strategic objectives, it is recommended that the TP document specify what aspects of the specific objectives will be achieved in the programme period. (AR 4.4) 3.2. State Building: In response to learning from pervious experiences, the AM has identified the following issues that need to be addressed by the programme: The need for strengthened programme coordination to manage an ambitious programme under difficult political and donor circumstances. This will require technical and professional resources at the DRO to ensure there is coherence and coordination of activities at the same time as being lead donor in the local government sector. The need for budget flexibility in terms of unallocated funds to respond to requests from the PA on matters arising from the changing political, security and economic circumstances. The need to focus TA on priority activities in the municipal sector, in particular a coordinated strategic approach to policy reform in cooperation with other donors (AR 5.2) 3.1. In line with the appraisal team recommendations, the results framework was developed further to demonstrate what aspects of the specific objectives will be achieved in the programme period. a. A programme coordinator position has been added. This will be financed from the third budget line: Others. Following discussions with senior management the need for flexibility will be provided by specific appropriations on a caseby-case basis. Fully agree to focus TA on priority activities in the municipal sector with emphasis on the reform agenda and increased donor alignment and harmonisation. 42 P a g e

43 3.3 State Building, Municipal Development Programme: The final TP document should include details on: i) the MDP and its four windows and Danish priorities (e.g., amalgamation, E-governance, renewable energy and local economic development); ii) the specific efforts towards municipal reform envisaged by the current Danish TA; iii) Danish sector priorities and Denmark's role as co-chair of the sector; and iv) the ongoing MDP efforts regarding quality of municipal infrastructure and accountability of municipalities towards citizens. (AR 5.4) 3.4 State Building, Local Democracy: It is recommended not to fund this engagement as part of the TP, but to continue exploration of local democracy issues through the current allocation to the MDP. This allocation expires in December 2015 and includes funding for an adviser and for policy work. The output of the work could be a fully described Development Engagement on Local Democracy to be included in the post-2015 Danish-Palestinian Partnership Programme. The mechanism for Local Democracy could then, funds permitting, be piloted in a few communities. It may be considered to align the Local Democracy Engagement with the planned World Bank Village Development Programme. (AR 5.5) 3.5 State Building, Negotiations Affairs Department: It is recommended to maintain delegated cooperation and to encourage continuous focus on quality reference guides, gender equality and expansion of contacts with Israeli stakeholders. These priorities should be reflected in the NAD overview of outcomes table in the TP document. (AR 5.7) 3.3 TP document amended accordingly. 3.4 In line with the appraisal team recommendation it was decided to postpone the Local Democracy activity for 2016 and spend the remaining period of the TP to develop a better understanding of what could be implemented in cooperation with other donors (GIZ, BTC, etc.) with whom dialogue has begun. 3.5 TP results framework adjusted accordingly. 43 P a g e

44 3.6 State Building, Danish House in Palestine: It is recommended that the planned review of the DHIP explore opportunities for: Board appointment procedures be formalised to reflect Danish as well as Palestinian participation with three members from each side and meetings taking place in Denmark and Palestine interchangeably. The DHIP Strategy ( ), currently available in draft form, be finalised with a stronger focus on culture, building on existing heritage activities as well as contemporary culture, and partnerships between professional institutions such as museums, media organisations and academia. An appropriate results framework be developed for to help document results and provide input for decisions on long-term funding. An organisational manual be developed to establish clear administrative procedures to match staff expansion, professionalization and accounting requirements related to higher levels of funding Renaming be considered along the more two-sided lines of Danish-Palestinian House in Ramallah which could then under a two-state solution be adjusted to in Jerusalem where the reference to Danish-Palestinian would be even more relevant. (AR 5.8) 3.7 State Building, Technical Assistance: DRO should go ahead with implementing the Concept Note for an Advisory and Reform Support Unit in the MOLG 3.8 Economic Development, Gaza: It is recommended to align the text in the TP with the proposal from Oxfam GB. This should include assessment and alignment of the objective, outcome indicators for each area of intervention. 3.6 A formulation mission for the DHIP engagement is planned for September 2014 and will take into account the appraisal team recommendation. A planning mission for the September formulation mission was undertaken in June DRO drafted a MoU with the MoLG to establish the Advisory Unit in line with the appraisal team recommendation. 3.8 TP results framework adjusted accordingly. 44 P a g e

45 3.9 Economic Development, Area C: The contribution should be conditioned by an MOU between the DRO and the EU Representative Office that includes: An agreed programme document and budget for the infrastructure component attached as annex A clear and transparent description of the strategic approach of the programme A results framework with measurable indicators A feasibility and risk analysis (AR 6.4) Unspent funds from the DKK 15 million contribution should be reallocated to other TP engagements based on documented justification Synergies: It is recommended to explore and strengthen synergies between the various TP elements of Danish development engagement, political dialogue and civil society support at an annual Danish- Palestinian Partnership seminar for DRO staff and Danish civil society representatives in Ramallah in preparation of Annual Consultations with the PA. (AR 8) 3.9 The final version of the programme document is expected from the EU end of August The results framework in the TP adjusted based on a draft version to be further elaborated. MoU to be signed following receipt of the final documentation and approval by the Danish Appropriation Authorities Fully agree to idea, so DRO will consider the value of hosting an annual Danish- Palestinian Partnership seminar for DRO staff and Danish civil society representatives active in Palestine as a means to help prepare the annual consultations with the PA. 4. Adherence to the aid effectiveness agenda 4.1. n/a 4.1. n/a 5. Budget 5.1 It is recommended to support the proposed budget for the TP period of DKK 249 million subject to one minor reallocation for programme coordination. Furthermore, it is recommended to increase the budget with DKK 25 million (unallocated) as justified in the Appraisal Report. The total TP budget would be DKK 274 million. The final TP document should include an overview of the existing financial management agreements for the different engagements. 5.1 The reallocation for the programme coordinator has been made. The appraisal suggestion of adding DKK 25 million as unallocated funds to ensure flexibility to be able to respond quickly to political engagements will be provided by specific appropriations on a case-by-case basis. An overview of existing financial management arrangements included in the final TP document. 6. Identified risks and risk management 45 P a g e

46 6.1 It is recommended that for focus of substance, the risk matrix be shortened to one page and include nine prioritised risks to cover both the State Building and Economic Development Thematic Programmes as follows: 6.1 DRO developed a risk management matrix based on the appraisal team recommendations. Contextual Risks 1. Deteriorating conflict between Israel and Palestine resulting in collapse of negotiation track and worsening violent confrontations 2. Political change. Reconciliation between Fatah and Hamas may result in changes to government policy and practice in conflict with Danish development priorities 3. Security unrest. Conflict may occur between supporters of Fatah and Hamas if reconciliation runs into difficulties. Israel may increase economic pressure Programmatic Risks 4. Reform paralysis. Political conditions and lack of strong Palestinian leadership up to and after national elections may lead to reluctance to make policy or administrative changes 5. Corruption through misappropriation of funds intended for programmatic operations and other instances of malpractice among implementing partner institutions 6. Weak human rights protection by Israeli and Palestinian authorities (in the West Bank and in Gaza) could further worsen in the current situation and put gains made under pressure 7. Deteriorating operational conditions in Gaza, including impact of military occupation, blockade and closures (Institutional risks are included under item 15) (AR 9) 10. Follow-up to the recommendations of the Danida Programme Committee 46 P a g e

47 10.1 HRBA and Gender Equality Screening Note should be updated to bring out more strongly empowerment of women, workers rights and not least the particularly grave human rights challenges evidenced in Gaza (AR 4.2) 10.2 Results framework should be strengthened, merged into one and given greater clarification on how Danida contributes to the objectives set out in the Concept Note (AR 4.2) 10.3 Risk mitigation measures should be strengthened, notably: i) risks related to the municipal reform process where many donors were engaged and Denmark should make an effort to align donors; and ii) risk mitigation pertaining to the situation in Gaza (AR 4.2) 10.1 HRBA and Gender Equality Screening amended based on the appraisal team recommendations Results framework adjusted based on the appraisal team recommendations Risk mitigation measures strengthened following the appraisal team recommendations. 11. Other recommendations It is recommended to work with PA government and development partners for gender-disaggregated data in existing funding mechanisms as these constitutes the bulk of Danish support and do not appear from the HRBA and Gender Equality Screening Note to be covered by disaggregated data (AR 4.5) 11.2 It is recommended that a Programme Coordinator be recruited by the DRO with financing from the planned allocation for the State Building Thematic Engagement. (AR 7) 11.1 DRO will work with implementing partners to obtain gender-disaggregated data to the extent possible. Most likely more detailed information on gender disaggregation can primarily be envisaged for the Country Programme post The programme coordinator will be financed from the third budget line: others. 12. Engagement Level 12. Capacity of partners PEGASE is a well-functioning EU mechanism that has in-built safeguards and monitoring systems that are said to ensure a high degree of effectiveness. Further developments will include a results based framework and indicators with achievements in policy reform as result indicators Results framework developed accordingly. 47 P a g e

48 12.2. MDLF has been implementing infrastructure projects for many years and has a good track record. MDLF is implementing the MDP on behalf of MOLG and has been chosen to implement the funded Village Development Programme as well as the EU engagements in Area C. World Bank and MDLF is planning to carry out a capacity assessment of MDLF to ensure that the organisation has the capacity to expand to be able to include these new engagements NAD was found to be competent and clear about its role in the challenging context of Israeli-Palestinian negotiations DHIP faces a variety of organisational and management challenges requiring resolution for increased funding to be justified. DHIP s governance challenges include a disconnect between a two-sided partnership purpose (Denmark-Palestine) and a one-sided practice of a Board comprised of Danes only and a name with sole reference to Denmark OXFAM GB has been working in Gaza almost 20 years and has development a good network of local partners with the specialisations needed to implement economic recovery activities under very difficult circumstances. The Country office for Palestine and the Head Office in GB support the OXFAM Gaza office. The AM finds that the OXFAM office in Gaza is very robust and has dedicated professional staff Staff in the EU mechanism for Area C is fairly well informed about the opportunities and challenges of engagements in Area C. However, programme documentation and programme management procedures appear weak. Another weakness is that the programme is largely driven by donors with limited PA ownership and traction Agree Agree In September 2014 DRO will carry out a formulation mission to help the DHIP to develop it strategy and look into its capacity needs Agree Agree. 13. Results Framework 48 P a g e

49 13.1. The results framework should be revised to reflect measurable progress according to HRBA principles and gender equality (AR 4.5) 13.2 The results framework of the TP document (overall as well as thematic engagements) should be revised in order to allow for: Completion of tables and forms where spaces have been left empty in the documentation presented for appraisal Addition of quantifiable indicators on Baseline and Targets to enable measurement of progress against set objectives Correction for inconsistencies in presentation and substance between TP and Engagement Documents (AR 9) 13.3 State Building: The results framework for all proposed Engagements under State Building should be revised to include quantifiable Baseline and Target details along the above lines allowing for measurement of progress against agreed plans. (AR 5.12) 13.4 Economic Development: The results frameworks developed Engagement 2 (Area C) under Economic Development should be revised as a matter of urgency. It should include quantifiable Baseline and Target details allowing for measurement of progress against agreed plans. (AR 6.8) 13.5 The Theory of Change should be revised to reflect more caution and a stricter logic between the levels of input and expected changes in short, medium and longer term. The correlation between the modest inputs and the changes to be expected from a twoyear programme should be more coherent. (AR 4.6) Results frameworks adjusted Results frameworks adjusted Results framework adjusted Results framework adjusted Theory of Change adjusted and made more realistic. 14. Budget allocation 49 P a g e

50 14.1. It is recommended that the overall TP budget be increased with DKK 25 million as unallocated. This would allow the DRO to respond to call for assistance by PA or others. (AR 10) 14.1 Following discussions with senior management the need for flexibility will be provided by specific appropriations on a caseby-case basis. 15. Identified risks and risk management 15.1 For focus of substance, the risk matrix be shortened to one page and include nine prioritised risks to cover both the State Building and Economic Development Thematic Programmes as follows: 15.1 Risk management matrix adjusted accordingly. (Contextual Risks and Programmatic Risks are include under section 6 above) Institutional risks 8. Donor operations. Weak donor harmonisation, changing donor priorities, slow approval and transfer mechanisms 9. Inadequate PA ownership and failure to sustain results. (AR 11) The AM recommends that the risk matrix for the entire TP programme is shortened to include only 9 risks as listed in section 11 of the Appraisal Report (AR 5.14, AR 6.10) 15.2 Risk management matrix adjusted accordingly. 16. Monitoring and reporting arrangements n/a n/a 17. Others Financial Management: It is recommended to establish a documented overview of the different existing financial management agreements, including financial reporting and auditing requirements is included in final TP document. The financial management requirement of the new agreement with DHIP should be specified. (AR 5.11) 17.1 An overview of financial management arrangements included in the final TP document. 50 P a g e

51 17.2. Review: It is recommended that an internal DRO review and preparation process for the next phase be combined and take place in early 2015 followed by an appraisal in May (AR 12) 17.3 Post 2105 Programme: Danish development engagements beyond 2015 should comprise a six year planning framework with grant allocations for every three years ( and ). Building on the TP strategic framework, the period should continue to concentrate on state building and economic development with municipal infrastructure and service delivery as an important synergy. (AR 13) 17.4 Post 2105 Programme: It is recommended to proceed already during the second half of 2014 with preparations for engagements in support of: i) private sector driven agro-business in the agriculture value chain ii) green growth engagements within the framework of a World Bank programme. (AR 6.5) Process Action Plan: The Process Action Plan should be revised to accommodate the necessary preparations for a final TP Document. The PAP should include actions required as part of the preparations for the Danish-Palestinian Partnership Programme ( ) (AR 14) PAP adjusted and amended accordingly Agree Agree that these are possible programme elements that should be taken into consideration as part of the preparation for the post-2015 programme PAP adjusted and amended accordingly. 51 P a g e

52 Annex 07: Context analysis The development and humanitarian situation remains deeply affected by the effective blocking of political, economic, social and cultural rights caused by the occupation and by restrictions on access and movement, including goods and services. Recent UN reports continue to highlight threats to the lives, liberty and security of the Palestinian population, continued forced displacement, restrictions on movement and access, and physical and administrative restrictions on humanitarian organisations. 6 The lack of progress in the Palestinian-Israeli peace talks continues to prevent concerted developments efforts. Although talks resumed in 2013 under United States mediation, they did not produce a result and the major stumbling blocks remain. These include the continued building of Israeli settlements in the West Bank and East Jerusalem, as well as failure to bridge disagreements concerning other permanent status issues, including the fate of Jerusalem and the demarcation of borders. There continue to be regular security incidents and Israeli settlements on the West Bank continue to expand. In 2012, Palestine s status was upgraded to a non-member observer state in the UN. Palestinians regard the move as an important step towards formal recognition of Palestine as a sovereign state, and while largely symbolic, it does provide the Palestinian leadership with the option of accessing various UN committees and conventions in pursuit of self-determination and statehood. Many of the challenges to Palestinian autonomy, as well as its social and economic development, involve Israeli control of natural resources in the opt (land and water) as well as movement restrictions (both internal and external), as well as the volatile security situation. The Palestinian territories consist of the West Bank (including East Jerusalem) and Gaza. The division of the West Bank (see box) following the Oslo Accords in 1993 was introduced ostensibly to facilitate the gradual transfer of power to the Palestinian Authorities (PA). However, Israel and the PA assume The Palestinian territories encompass the West Bank (including East Jerusalem) and Gaza. The Oslo Accords divided the West Bank into three areas: while some control was given to the PA in Areas A and B, Israel maintained full security control and control over building and planning in Area C. Area C, which constitutes over 60% of the West Bank, is the only contiguous territory and contains the most significant land reserves, including the bulk of Palestinian agricultural and grazing land. Area A consists of approximately 18% of the West Bank and is under Palestinian security and civil control. Area B consists of approximately 21% of the West Bank and is under Palestinian civil control and joint Palestinian and Israeli security control. The Palestinian Authority led by Fatah governs the West Bank. Since 2007, Gaza has been administered independently by Hamas. different powers and responsibilities in each area. Most Palestinians in the West Bank live in Areas A and B, in which the PA continues to assume responsibility for the day-to-day management of Palestinian civil affairs in such areas as education, culture, health, social welfare, taxation and tourism. In Area C, Israel retains full civil and security control. East Humanitarian Report, UNOCHA 52 P a g e

53 Jerusalem is not included within any of the areas designated A, B or C. Israel considers East Jerusalem to be part of Israel proper, although this is not recognised by the international community. Finally, the Gaza Strip, having also a border with Egypt, is geographically separated from the other Palestinian territories. In particular, Israeli restrictions relating to Area C hamper the potential for economic development as well as severely constrain their freedom of movement to what amounts to 60% of the West Bank territory. These restrictions include physical impediments to movement (such as roadblocks and checkpoints) and administrative constraints (such as the need for special permits). The division of the opt into a mass of separate enclaves creates a number of internal borders. For example, the Israeli authorities determine where and by whom resources can be exploited, including agricultural land. The dislocation is clearly demonstrated by the 700 km separation barrier that crosses the entire West Bank and that has been assessed by the International Court of Justice as violating international law. 7 There is a general recognition that progress is being made on state building and governance in the West Bank and the PA has been judged by international observers to possess the technical capacity to effectively shoulder a Palestinian State. 8 Nonetheless, it needs to be recognised that overall efforts at the national level (i.e. concerning opt as a whole) continue to be undermined by the impact of Israeli policies and internal Palestinian divisions. These effectively limit Palestinian sovereignty and the ability to function as a normal state by imposing restrictions and asymmetric relations on the nature and scope of the PA s powers and jurisdiction. 9 At the same time, the political and administrative division between the West Bank and Gaza has prevented cohesive political and development processes and undermines social cohesion. It remains to be seen how much change the announcement in April 2014 of a reconciliation between Fatah and Hamas will produce. While the PA has governance responsibilities also for Gaza, its ability to exercise these is limited. The Ministry of Finance still pays the salaries of PA civil servants in Gaza, though most were made redundant following the formation of Hamas controlled institutions in the Gaza Strip after The PA also continues to fund medical services referral (from Gaza to East Jerusalem hospitals), and to provide civil affairs services (passport, identification papers, death, births, etc.) and other trade (import export) functions between Gaza and West Bank through Israel. Taking forward the reconciliation announced between Fatah and Hamas will be a difficult and lengthy process, given the bitter rivalry between both sides and their different perspectives on society as well as how to resolve the Palestinian-Israeli conflict. The division has also had a direct impact on the quality of democracy achievable. This is starkly illustrated by the dysfunction of the Palestinian Legislative Council (PLC) and the failure to hold new presidential and parliamentary elections, despite the ruling of the High Court that elections are a constitutional right that must be upheld. In terms of the PA s democratic credentials, the absence of regular elections since 2007 limits the legitimacy of the PA and thus its accountability. It also has a profound impact on reform processes and state building efforts. 7 ICJ ruling, 9 July (EU, WB, IMF, UN and the Middle East Quartet). 9 Context analysis and mapping of on-going and coming sector development initiatives: the Palestinian state building and citizens rights pillar. Mapping study for DRO, April 2014 (draft). 53 P a g e

54 At the technocratic level, improved national and municipal level governance and economic development combined with civil society and accountability structures, such as the Ombudsman, are seen as the main drivers for change in Palestinian society. The PA s latest National Development Plan ( ), for example, highlights governance as one of the four priority sectors (the others are social, economy and infrastructure) and provides a basis for donor alignment. Key challenges facing the PA s governance reform agenda include: enhancing domestic revenues, improving public financial management, strengthening anti-corruption measures, ensuring independent checks and balances, and control over financial expenditures. Sources indicate that there is potential to reduce domestic expenditures and increase the efficiency of the civil service through civil service and administrative reform. The PA has made improvements here (reducing the wage bill from 27% to 18% between 2007 and 2011) but this is still above the situation in comparable countries. 10 Corruption remains a significant problem, although trends appear to be improving. Transparency International notes an improvement from 16% in 2005 to 48% in 2010 relating to perceptions of the PA s ability to control corruption. Oversight of the government is still weak due to the suspension of the PLC and the subsequent lack of any legislative oversight over the PA Executive. Accountability is also constrained by a complex institutional landscape, with numerous organs whose roles are not clearly established. The weak justice sector, for example, increases the risk of corrupt practices and impunity. In this context, there is also a need to strengthen civil society so that it can perform an independent monitoring role. The governance area has received extensive donor support at national as well as on subnational levels and this is expected to continue given that more effective and efficient state functions represent a key development enabler. The municipal development and local governance sector, where Denmark acts as coordinating donor, is regarded as playing an increasingly vital role with international support being directed towards reform issues, such as decentralization, amalgamation of local governance units, taxation and municipal income, and local democracy. The local governance sector features a multi-layered system of physical, institutional and administrative restrictions, which stand in the way of a coherent sector capable of delivering services to its people. For example, there are more than 400 local government units, including 134 municipalities, with each facing different administrative and security restrictions depending on their size as well as their location (Area A, B or C). Challenges faced by local administrations include: discrepancies in administrative, technical and fiscal capacities, particularly when it comes to smaller government units, hindering their ability to provide adequate services and capitalise on development opportunities; restrictions associated with Israel s occupation; lack of clarity regarding the division of roles and responsibilities between the MoLG and local government units; an inadequate fiscal base compounded by the failure of local residents to pay service fees and taxes; inadequate infrastructure (often subject to damage by Israeli forces); a deteriorating socio-economic environment; and problems of territorial contiguity and population density PEGASE Appraisal Report, Ex-post Evaluation of AFD Municipal Development Project in the Palestinian Territories, 2011, Agénce Française de Développement. 54 P a g e

55 The new National Development Plan also emphasizes economic development and employment as a major priority. The Palestinian economy is characterised by a growing resource gap and labour market imbalance on the one hand, and an unsustainable dependence on external sources of income on the other. According to the IMF, growth rates have fallen from 11% during to 5.9% in 2012 and 2.9% in the first half of 2013, thus accentuating the importance of aid in driving the economy. 12 Meanwhile, unemployment reached 21%, with youth unemployment at 33%. In Gaza almost one in two Palestinians aged are unemployed. The unemployment rates for males in the West Bank are 17.3% and for females 25.3% while the male unemployment in Gaza is 26.8% and 50.1% for women. 13 This situation is producing severe pressures on livelihoods; the number of Palestinians living below the poverty line reached 26% in 2011, with poverty rates in the West Bank reaching 18% and in Gaza 39%. An underlying challenge to Palestine s economic development remains Israel s control of Palestinian air space, territorial waters, natural resources, movement and the macro-economic instruments that enable economic autonomy. Land seizures and restrictions on movement are furthermore making once-profitable industries like agriculture and manufacturing nearly impossible. In Gaza, approximately 17% of the total landmass is today characterised as Access Restricted Areas 14. The lack of control over borders means that taxes and duties are primarily collected by the Israeli authorities, and then forwarded to the PA. This leaves the Administration with considerable fiscal unpredictability. That said, the PA, with donor assistance, is taking steps to strengthen domestic revenue collection, including through property tax etc. Recent World Bank analysis shows that municipalities have grown economically stronger by increasing tax collection and service delivery has gone up as a consequence. 15 According to the 2013 PEFA report, recent growth has been focused on the public and nontradable sectors and has involved donor-supported PA expenditures. 16 Public administration, security and other public services, including health, education, water, and electricity, grew from 20% of GDP in 1994 to 25% in Meanwhile, the sectors constrained by the Israeli restrictions on movement and access, such as the manufacturing and agriculture sectors, declined from 19% to 10% and 13% to 5%, respectively. The security, political, and economic context has a direct impact on the human rights situation in Palestine, which continues to be deficient. The West Bank-based Independent Commission For Human Rights (ICHR) highlights violations by the PA including the right to life and attacks on personal security, torture allegations, ill-treatment of prisoners, neglect of due process of law, arbitrary detention, non-enforcement of courts decisions, obstruction of general and local elections, the right to hold public office and the right to peaceful assembly. 17 In its regular dialogue with the PA, the EU has highlighted continued concerns about unlawful arrests and ill treatment, freedom of assembly, freedom of press and equal opportunities for 12 West Bank and Gaza, Staff Report prepared for the September 2013 Meeting of the Ad Hoc Liaison Committee, International Monetary Fund, September Palestinian Territories Risk Assessment Report 2013, Country Indicators for Foreign Policy (CIFP), October Fragmented lives Humanitarian Overview 2012, United Nations Office for the Coordination of Humanitarian Affairs occupied Palestinian territory, May Implementation Completion Review, September 2013, World Bank 16 West Bank and Gaza Public Expenditure and Financial Accountability (PEFA), Public Financial Management Performance Report, June The Status of Human Rights In Palestine, the Independent Commission For Human Rights (ICHR), P a g e

56 women, although it is noted that there is progress in other areas. Priorities in the areas of human rights are included in the joint 2013 EU-Palestinian Action Plan and thus provide a basis for continued dialogue and support. In 2012, Freedom House assessed the PA s press status as not free, noting that the lack of civil liberties and political freedoms in Gaza exceeds those of the West Bank. The demolition of Palestinian-owned houses and structures in Area C and East Jerusalem has dispossessed large numbers of Palestinians in the West Bank and added to the increasingly serious humanitarian situation. Palestinians are threatened by illegal settler violence in the form of personal violence, taunting, stone throwing, shooting, and harassment and destructions of their homes and land. Bedouin communities are particularly at risk when they live in areas close to Israeli settlements or coveted for settlement expansion. The continued expansion of Israeli settlements in the West Bank and East Jerusalem contravenes international humanitarian law. In Gaza, Israeli military operations and recurrent outbreaks of hostilities continue to pose a serious threat to life, liberty and security. Hostilities escalated in late 2012 and continued into The blockade and related restrictions target and impose hardship on the civilian population, effectively penalizing them for acts they have not committed. As such, these measures contravene article 33 of the Geneva Convention relative to the Protection of Civilian Persons in Time of War (Convention IV) prohibiting collective penalties. Restrictions have reduced access to livelihoods, essential services and housing, disrupted family life, worsened unemployment, and undermined people s hopes for a secure and prosperous future. The internal Palestinian divide continues to affect the lives of citizens despite efforts to reach reconciliation. Areas under the authority of the PA and the de facto authority in Gaza saw an increase in human rights violations in 2013, particularly in relation to political arrest, torture and ill-treatment, freedom of expression and the disregard of judicial rulings. Particularly worrisome developments are shortcomings in the application of due process and the practice of capital punishment. According to Human Rights Watch, courts in Gaza have repeatedly accepted coerced confessions as evidence of guilt in capital cases. Increasing interventions by the de facto authority in the Gaza Strip in restricting civil rights and freedoms, including the right to peaceful assembly, and freedom of press have continued. Gender equality remains a challenging issue in opt. Women are still marginalised in the public sphere in terms of their economic, social and political participation due to conservative norms, not least in Gaza. They are also discriminated against in laws governing marriage, divorce, custody of children, inheritance, and violence against women. Although literacy among female Palestinians is three and a half times higher than their male counterparts, their participation in the formal labour force is limited to sectors such as health and education and there is likewise a noticeable lack of women s participation at the senior decision-making level, including in security and peace negotiations in both West Bank and Gaza authorities. 18 Hamas rulein Gaza has driven women out of the public sphere and back into the private. The negative consequences on children living under occupation and conflict are substantial. One of the most pressing issues is the treatment of children in the military detention system. According to UNICEF, up to 700 Palestinian children aged 12 to 17 (the great majority of them 18 Palestinian Central Bureau of Statistics 56 P a g e

57 boys) are arrested, interrogated and detained annually by Israeli army, police and security agents. 19 In the past 10 years, an estimated 7,000 children have been detained, interrogated, prosecuted and/or imprisoned within the Israeli military justice system. With regards to education, serious challenges include over-crowded and ill-equipped classrooms, rising violence, inadequate learning materials and insufficient facilities for extracurricular activities. In Gaza, education standards are declining while classrooms are often too large, reaching a number of students. 79% of public schools and 90% UNRWA schools are running on double/triple shifts 20. Civil society actors have the potential to provide monitoring and advocacy for change, in addition to delivering basic services to the population. While the involvement of civil society has increased in response to the PA reform process, organisations still face constraints internally and externally. Both the PA and Israeli authorities closely monitor activities of organisations, especially those working with the protection of human rights or reform. This means that NGOs, while enjoying the formal right to peaceful assembly and association, have seen an increasing suppression of political activities and free association, including troubles and delays in registration; cumbersome security clearances for association and interference in management issues; forced dispersion of demonstrations; detention of participants. 21 According to a mapping study of civil society organisations undertaken in 2011 for the European Commission, Palestinian civil society is further challenged by a range of internal governance and external cooperation issues. 22 These include lack of clarity regarding their vision and role, an excessive focus on service delivery (compared to policy interaction), competition, and inadequate transparency and accountability resulting in limited trust from the community they represent. While NGOs are increasingly incorporating women s rights in their work, they still need more skills in terms of how to work with gender mainstreaming in their programmes. 19 Children in Israeli Military Detention Observations and Recommendations, UNICEF, February UNICEF, February Provision of Thematic Priorities for the HR/GG Secretariat in the occupied Palestinian Territory (opt), Allegra Pacheco, Esq., Submitted by SDC, May Mapping Study of Civil Society Organisations in the occupied Palestinian territory, Constantini, Atamneh, Ayesh and Al Husseini, Framework Contract Commission 2007 Lot Nr 4, May P a g e

58 Annex 08: General development indicators Country Government type Population+ Palestine Semi-presidential system, Provisional government 4.44 million (2013 est.), 2.68 million West Bank and 1.76 million Gaza Literacy rate* 94.6% (2009) Population below poverty line % below poverty line in 2011, (13% below the extreme poverty line). 18% in the West Bank and 39% in Gaza. Multidimensional Poverty Index (2006-7) GDP per capita* $1.210 (2005 est.) Unemployment rate**** 23.9% (Gaza 31.0% and West Bank 20.3%) Population between 0 and 24 years# 56.2% Unemployment rate (15-24 years)+ 38.8% Female labour force**** 17.1% (men 69.0%) Female seats in parliament % HDI rank out of 187 GII rank No data Press Freedom Score*** 84 (out of 100) status: not free (2013) Press freedom index** 157 out of 179 ( ) Control of Corruption** (highest 2.5) Voice and accountability index rank** (highest 2.5) *World Bank, **Transparency International, ***Freedom House, ****Palestinian Central Bureau of Statistics, +CIA World Factbook, ++UNDP Human Development Report, +++The Palestinian Human Rights Monitoring Group, ++++ International Monetary Fund. 58 P a g e

59 Annex 09: Theory of change Diagram 1: illustration of Transition Programme theory of change Context & development environment assump ons Change process Macro state-building framework assump ons Fragile security situa on (na onal & local) does not prevent development Mixed quality of human rights compliance leads to bo om-up pressure for change Fragile macro-economic condi ons (fiscal constraints, aid dependence) cause PA to priori se economic development & structural reform Development poten al of Area C remains severely constrained due to Israeli policies Gaza remains isolated Weak human rights and gender inequality Inputs: DK joins PA & other contribu ons in governance, democracy, human rights; growth & employment. Short term results: enables key state & civil society capaci es, incl. effec ve planning, resource mobilisa on, PFM, M&E etc. Medium term results: stronger democracy, governance, human rights, growth & employment State-building & development goals are set out in PA s NDP Peace process remains sta c & Israeli policy con nues to be a major constraint Suitable development programmes exist & are supported by donors and local stakeholders, including PA High aid dependence but aid remains available Special approaches required for Gaza Long term results: an independent Pales nian state within the framework of a two-state solu on with a robust economy, sustainable ins tu ons and good governance at na onal and municipal level. 59 P a g e