Transcript Palestinian Econ Donor Briefx 726.35 KiB

Update: Palestinian Economic Study
September, 2015
Objective of Study
Find practical steps to grow the
Palestinian private sector in support
of statehood
Presentation
1.
2.
3.
4.
5.
6.
7.
8.
9.
Overview
Labor force
Economic Sectors
Composition of private sector
Foreign direct investment
Doing business in Palestine
Restrictions on goods and people
Areas to be explored
Way forward
1.
Overview
• Palestinian economy has experienced episodic growth in
recent decades
• But the economy remains small and dependent on foreign
markets
• Growth fell from 10% to below zero in 2013
• Hamas de facto rule in Gaza has constrained private sector
• Movement restrictions imposed by Israel limit growth and
exports (see next slide)
2.
Labor force
• Unemployment rate is 26% but 47% for youth (20-24)
• Labor force set to expanding – 47% of population under 18
• West Bank: 68% work in private sector, 15.8% in public
sector and 13.8% in Israel and settlements
• Gaza Strip: 55% in public sector & 39% in private sector
• Abundant labor supply with a high education & skill level
• Female labor participation is low at 17% (26% for the region)
3.
Major economic sectors







Energy
Water
Tourism
Light manufacturing
Agriculture
Construction
Building materials
4.
•
•
•
•
•
•
Composition of private sector
Moderate productivity, low investment, & limited competition
Enterprises reliant on Israel for imports and exports
Private sector has not evolved significantly since Oslo
But modest improvement in diversification of export markets
Exports of goods are dominated by agricultural produce,
limestone, and scrap metal
Palestinian firms small - 1% of firms bigger than 20 workers
5.
Foreign direct investment
• The stock of foreign investment in the Palestinian territories equaled
$2.625 billion at the end of 2012.
• Over 70% from Jordan, 11% Qatar, 4% Egypt, and 1% Saudi Arabia
• Palestine Development and Investment Company (PADICO) - one of the
largest foreign companies.
• Investors include diaspora Palestinians from Jordan, UK, & the Gulf.
• Over $250 million telecommunications, housing, and the Palestinian
Securities Exchange.
Foreign direct investment (continued)
• Arab Palestinian Investment Company - large foreign investment
group with authorized capital of over $100 million.
• The largest U.S. investment is Coca Cola’s $11 million stake in the
National Beverage Company
• Qatar has a projected $1.6 Billion invested over ten years in telcoms
& real estate
• 3 private equity and 1 venture capital fund in the Palestinian
territories
• Total capital exceeding $206 million & estimated investments of $45
million Investments in housing, agribusiness and other sectors.
6.
•
•
•
•
•
•
Ease of doing business in Palestine
162 out of 189 economies on the ease of starting a business.
Time and cost of preregistration, registration in the economy’s largest
business city, social security registration.
116 out of 189 on entrepreneurs’ access to credit.
Lack of strong legal rights of lenders and borrowers under collateral
and bankruptcy laws.
130 out of 189 in ease of trading across borders category.
Excessive document requirements, unnecessary customs procedures,
and inadequate infrastructure.
7.
•
•
•
•
•
Restrictions goods & people
5 Barrier Terminals and King Hussein Bridge can be used for exports
X-ray scanning installed only at 3 of 5 crossings
2% of West Bank exports (mainly uncut stone) exported into Jordan
11 Barrier Crossing Points open to laborers
Permits issued for 3 months with strict requirements:
• 35 or older & married with at least one child,
• No security record with Israeli security service,
• Nave an employer in Israel willing to apply and pay for permit
8.
•
•
•
•
•
•
•
•
Areas for additional exploration
Simplify registration process for starting a business
Expand access to credit by improving rights of lenders and borrowers
Improve movement logistics and checkpoints into Israel
Improve procedures at King Hussein Bridge Crossing into Jordan
Arrange meetings between Palestinians and Israeli-Arab businesses
Create a protocol for expedited security process for businessmen
Focus on stone, marble, olive oil, dates, textile and steel products
Power and water for Gaza
9. Way Forward
• Next phase of literature review
• Trip to Jordan and Palestine
• Interviews in Washington DC and New York
• Meeting in Athens