PNA's Optimistic Plan for Reform: Mel Frykberg Reports from the Occupied Territories

By Frykberg, Mel | The Middle East, March 2008 | Go to article overview

PNA's Optimistic Plan for Reform: Mel Frykberg Reports from the Occupied Territories


Frykberg, Mel, The Middle East


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THE PALESTINIAN ECONOMY is facing a multitude of difficulties, not least recovery from the punitive restrictions that followed the success of Hamas in the 2006 elections.

Political uncertainty and deteriorating conditions on the ground, exacerbated by settlement expansion, restrictions on movement, trade, and access to resources, have resulted in dwindling investment and stripped the economy of the bulk of its productive capacity.

The resulting increase in poverty levels has made the Palestinian economy more aid dependent, perpetuating a cycle that will--if allowed to continue--ultimately intensify the humanitarian crisis. The international embargo imposed on the West Bank in 2006 was subsequently lifted in June 2007 after the Palestinian President Mahmoud Abbas (Abu Mazen) established an emergency alternative government in Ramallah, following unrest and rioting which set Fatah supporters against those of llamas.

But the devastating impact of the boycott has left the Palestinian budget in deficit and even though more than $7.4bn was promised to the Palestinian National Authority (PNA) at the International Donors Conference in Paris in January, much of this money will be needed just to move the Palestinian economy back into the black. However, despite the crippling setbacks, the PNA's Finance Ministry is determined to get the economy going again. To this end the Palestinian Reform & Development Plan (PRDP) sets an ambitious three-year agenda.

Dr Mohammed Mustafa, economic advisor to President Abbas, explained that a number of challenges face the PA.

"Restrictions and obstacles imposed by the Israeli military occupation on internal and external movement of labour and goods is just one of these," Dr Mustafa noted. The growing number of young, unemployed Palestinians, together with the widespread emigration of highly qualified professionals presents another serious setback to progress.

"These challenges, can be partly overcome and even turned into business opportunities with the help of an active, dynamic and growing private sector," he added. But in Palestine, Dr Mustafa said, the energy and the commitment of the labour force is inextricably linked with the opening of new opportunities and businesses.

To absorb the high number of young unemployed requires the creation of new businesses in all sectors, including agriculture, tourism, telecommunications and real estate, which are just some of the many areas with good prospects for economic growth, Dr Mustafa said.

"As the world becomes more interdependent, so do the models of economic organisation and activity. Given the comparatively high quality of educational institutions and the significant number of qualified and skilled human resources, Palestine is well prepared for the global trend towards an information-driven market economy," the economist observed.

Investment is part of the solution since this will help retain expatriate professionals who are committed to Palestine and already playing a key role in helping to integrate the local economy into the regional and international market.

"We are planning a conference with private sector investors next month in Bethlehem. Our intention is to invite business men and women from the local and global community to present and discuss investment opportunities and generate real enthusiasm for investment in Palestine," Ziad Karablieh the director general of International Economic Relations at the Palestine Economy Ministry told The Middle East.

"The PRDP also has a comprehensive three-year plan in place to develop the Palestinian economy and private sector to achieve its maximum potential," said Karablieh. Part of this plan revolves around working with the Quartet Representative, former British PM Tony Blair, to implement a series of Quick-Impact Projects (QIPs) designed to stimulate the economy. …

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