FIELD Brief No 4: Mobilization of Savings in the West Bank & Gaza

Economic development is driven by investment spending. And investment spending is determined by national saving. When investment is financed mostly by local savings, the fruits of development are enjoyed by the country’s citizens. However, when national savings fall short of investment needs, countries resort to foreign borrowing in which case a certain percentage of future income will be transferred abroad in the form of interest and dividends. It is in this context that the present study is designed to identify the appropriate means of mobilizing national savings in the West Bank and Gaza. The this brief presents a summary of the longer report, FIELD Report No 5 including an overview of national savings habits in West Bank and Gaza and offers a series of recommendations for a) the government sector b) the banking sector and c) the Palestinian Monetary Authority on how to improve overall spending rates, therefore loosening up local credit to fuel private sector growth and job creation.

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