Growth & Expansion:Palestine experienced rapid economic growth between 1994 and 1999, with GDP averaging over 10% per year. While GDP growth sharply declined during the peak years of the 2nd Intifada, 2000-2002, it resumed growth in 2003 and by the end of 2005 regained its pre-2nd Intifada level. This suggests a real growth opportunity in Palestine during relatively normal economic conditions. The macroeconomic framework unveiled in December of 2007 forecasts GDP growth increasing by a further 15% by 2010.. Human Capital: The Palestinian population living in the West Bank and Gaza Strip reached 3.8 million by the end of 2007. The level of education of the Palestinian population is the highest in the whole region, with the exception of Israel. A youthful population, 57% below the age of 20 and 65% below the age of 25, means that the labor force will increase by 500,000 in the next five years. Over five million Palestinians live outside the country constituting an important source of capital and links to international markets. Palestine’s skilled and well-connected work force is a unique asset for investors, and provides a real opportunity for growth. [Top] Trade: Palestine’s location at the crossroads of Europe, Asia and Africa make it excellently placed for trade. Products made in Palestine benefit from preferential trade agreements with the European Union, the US, Canada, Russia, Turkey and 19 Arab countries. Natural Resources: Fertile soil and a clement climate make Palestine ideal for agriculture, and some land is harvested twice a year. Dead Sea salts and minerals represent a unique natural wealth. The West Bank also possesses large amounts of good-quality stone and marble, whose exploitation is worth almost $500m per year. Lastly, 1.4 trillion cubic feet of natural gas reserve have been discovered off the Gaza coast. Government: The Palestinian National Authority is committed to a private sector-led approach to economic growth. Its Reform and Development Plan for 2008-2010 demonstrates a clear commitment to creating an enabling environment for a thriving private sector: “The Palestinian economic vision is to have a diversified and thriving free market economy led by a pioneering private sector that is in harmony with the Arab world, is open to regional and global markets, and that provides the economic basis for a free, democratic and equitable society.” Regulatory Framework: The PNA is focused on creating a comprehensive and coherent legal framework to facilitate enterprise, investment and trade. Special incentives are offered by the 1998 Industrial Estates and Free Zones Law and the 1998 Investment Promotion law, which include income tax, fixed assets and export exemptions, and preferential access to regional and international markets. The top rate of tax for individuals and companies is only 16% (soon to fall to 15%), with extensive exemptions available. Infrastructure: The PNA and the donor community spent an annual average of $250 million between 1995 and 2000 to rehabilitate electricity, road, water and waste-disposal networks. The private sector contributed by investing in electricity generation and telecommunications. The PNA is currently committed to spending a further $400 million in the next three years on upgrading infrastructure. [Top]