In a new report entitled Disengagement, the Palestinian Economy and the Settlements, the World Bank warned that the Gaza Strip pullout plan "does not incorporate a change in border trade regimes".
Israel has said it would keep control of entry points in and out of Gaza after it evacuates all 21 illegal settlements in the Gaza Strip and another four in the northern West Bank by the end of 2005.
The report stressed that the "key to restoring Palestinian economic vitality is for Israel to dramatically ease internal closures and restore the predictable flow of goods across borders".
"What difference does disengagement make for the Palestinians ... almost none in economic terms," Nigel Roberts, who heads the international institution in the Palestinian territories, told reporters.
Aid for change
He warned that the evacuation plan would also fail to convince donors to assist in the reconstruction of the local economy unless it reopened Israel's borders to Palestinian goods.
"Common sense tells you it's a real stretch to expect donors to lay one billion dollars every year when the money is used for welfare and consumption and without a clear political horizon," he said in reference to foreign aid pumped into the Palestinian economy.
But Roberts added that, providing "a radical easing of the closure is in place," donors could be convinced to top their already high contributions with another $500 million a year.
Tel Aviv is considering blowing
up vacated settlements
"We do advocate the importance of a port and airport for Gaza and access to third countries for the long-term progress of the Palestinian economy," he also said.
Between 90% and 95% of Palestinian exports go to Israel, giving Tel Aviv almost total economic domination of the Occupied Territories.
And to quell Israeli fears that Gaza resistance fighters may hide inside produce-loaded trucks to cross into its territory, Roberts said it was possible to ensure the security of Palestinian cargos "with the right technology".
But he stressed the obligation for Palestinians to "see the connection between closures and security" and to "put in a credible security mechanism" of their own.
"Palestinian reforms need to go well beyond security," Roberts also said, urging the Palestinian Authority (PA) to "create a more attractive environment for the private sector", by offering increased accountability and transparency.
Turning to the some 1500 to 2000 houses which will be left vacant with the settlers' departure, Roberts made clear the World Bank had refused to act as custodian despite Israel's persistent requests.
"We do not think it makes sense to see these assets transferred to a third party, they should go to the PA," he said, although Israel has said it could destroy the evacuated homes.
The World Bank advocates the creation of a special PA agency to receive and dispose of these assets with the technical assistance of a third party.