Experts Consider Practical Aspects of Building Viable Palestinian State, Urge

Sound Social, Economic Policies, as United Nations Meeting Continues

 

(Received from a UN Information Officer)

HELSINKI, 29 April — Assessing the mechanics of building a Palestinian State — one that could inspire confidence in its citizens, deliver basic services, and support a vibrant economy — experts attending the United Nations Seminar on Assistance to the Palestinian People today said that democratic and accountable institutions, backed by sound social and economic policies, were essential for long-term success.

The Seminar’s second plenary session, “Looking ahead:  developing sovereign institutions and creating a sustainable Palestinian economy”, found the assembled academics and representatives of United Nations agencies weighing issues at the heart of the effort to build and sustain an independent Palestinian State, including measures to improve public sector accountability and efficiency; create an enabling environment for robust private sector-led growth; bolster the role of women in socio-economic development; and invest in youth through education.  The participants also discussed the role of the donor community in achieving those ends.

Kicking off the discussion, Akram Atalla, Manager of the Jerusalem Office of the Institute for Applied International Studies Office, said the public sector — and its functioning — in the Occupied Palestinian Territory was a crucial issue, especially because the situation on the ground changed so rapidly there.  The recent resignation of Prime Minister Salam Fayyad’s Government had an impact on public sector services that was still being measured.  Two months had passed since that administration had dissolved, leaving people to wonder, among other things, who was making decisions; when a new Government would be formed; and what was the level of coordination between institutions?

He believed that such a prolonged unsettled situation could only undermine public trust in whatever Government would be formed.  His discussions with people in the region had revealed that when scheduled municipal elections had been cancelled, people began to worry about the delivery of basic services.  He believed that voting had been put off because of existing divisions among Palestinian parties.  However, with the recent announcement of a reconciliation agreement between Fatah and Hamas, the elections would be rescheduled and a unity Government would be formed.  He said that putting in place democratic institutions would be essential for ensuring accountability and efficiency and building public trust.

With a PowerPoint presentation, he walked the participants through the Palestinian Authority’s efforts to address a host of public-sector essentials, including provision of electricity, water, sanitation and health services.  While the level of public satisfaction with those services varied marginally among citizens living in the Gaza Strip and the West Bank — and acknowledging that some services, such as water supplies, were largely controlled by Israel — he said that the election of a fully democratic Palestinian Government would be key to improving accountability and efficiency.  He was seriously concerned that in many instances, when Palestinian officials announced investigation into cases of corruption or substandard public services, the average citizen never heard about the results and therefore just considered the matter had been ignored or brushed aside.

Focusing on the role of women in socio-economic development, Janet Michael, Mayor of Ramallah, said women were integral to the growth and development of Palestine; in the formal and informal sectors, in both urban and rural areas, and within and outside their households.  In fact, women dominated the informal sector of the economy — a contribution rarely reflected in economic statistics.  “Despite a plethora of obstacles that have affected the ability of women to advance in the workplace and in political life, women have significantly contributed to the socio-economic development of the Palestinian Territory,” she said.

Not only were women often burdened with the full responsibility for child care and housework, they also faced discrimination in hiring, were paid less, and were less likely to have pre-professional or technical training.  Together, the inequitable economic, political and social circumstances encouraged a gender-based socio-economic disparity in Palestine.  “This inequity has been recognized by local stakeholders, as well as international development organizations [even as] large steps have been taken over the last two decades to eradicate gender-based inequalities, in accordance with the Millennium Development Goals,” she said.

Women in the Occupied Palestinian Territory, she noted, partook in different economic sectors in the public and private sector — one third of public-sector jobs were held by women — along with numerous economic activities.  In 2010, the rate of participation of Palestinian women in the labour force reached an average of 14.7 per cent — 17.2 per cent in the West Bank and 10.2 per cent in the Gaza Strip.  That rate was low for many reasons, including Israeli actions, such as building the separation wall, stepping up settlement activities in the West Bank and East Jerusalem, and placing restrictions on movement and access of people and goods in the West Bank.  In the Gaza Strip, the Israeli Government continued the siege, and the restrictions on the entry of all but humanitarian goods, and on the export of goods, which had led to a collapse of the Gazan private sector.

Ms. Michael said that women’s education was viewed by the international community as a basic human right and a necessity for sustainable development.  Palestinians, for their part, had shown resilience and had promoted the education of future generations as a response to the region’s ongoing political and economic instability.  Palestinian women had lower dropout rates than men at the primary school level; at the secondary level, females outnumbered and outranked males in academic achievement and Tawjihi scoring; and at the tertiary level, women again outnumbered men.

The skills and educational level of women in the Occupied Palestinian Territory represented a vast resource of human capital, which should be considered an essential tool for future development.  However, while data showed that a large number of Palestinian women were educated and well equipped to contribute to society, due to socio-cultural barriers, their human capital remained largely overlooked.  So in real terms, women’s access to education had only marginally improved their status in Palestinian society.

Raja Khalidi, senior economist, Division on Globalisation and Development Strategies, United Nations Conference on Trade and Development (UNCTAD), speaking in his personal capacity, opened with a quote:  “the definition of insanity was said to be doing the same thing over and over again and expecting different results.”  He was critical of what he called the Palestinian Authority’s “statehood or bust” programme, whose economic policy dimension, he believed, endangered the Palestinian liberation agenda, both out of error of commission and omission.  Indeed, he did not take as especially good news the reports that the Bretton Woods institutions and the United Nations had affirmed, from an institutional standpoint, that the Palestinian Authority was now ready for statehood.

“There is a big contrast between those statements and the reality on the ground,” he continued, adding that the claim that the Palestinian Authority was now “at the threshold” of establishing a functioning State, amounted to a “genetic template approach” that oversimplified the complex governance issues in any situation, not only the Palestinian case.  The real problem was that arbitrary benchmarks were irrelevant to the actual dynamics of attaining sovereignty, and ignored “the big elephant in the room of Palestinian governance”, namely, prolonged Israeli occupation.  “In contrast today, what actually matters is what happens in September when, at best we witness an upgrading of the international diplomatic status of the State of Palestine.”

What was going to make that “virtual State” turn into a “real State” and not just “prized real estate”?, he asked, adding that no one seemed to be discussing that.  Indeed, the Palestinian Authority discourse seemed to assume that by the will of the people, the citizens who proved themselves to be capable of respecting traffic signals, paying electric bills, and not carrying guns in public, statehood would impose itself.  “Somehow, statehood just arrives in September because, technically, everything is ready,” he said, adding:  “This is politically farfetched, theoretically implausible, and economically dangerous.”

Continuing, Mr. Khalidi said that while the Bretton Woods institutions had certified the modern bases and sound economic policies of a successful developing economy, he was concerned about the sort of economy that the Palestinian Authority was establishing.  Assuming that a State was established in September and Israel withdrew, “what sort of economy are we talking about?”  The Palestinian Authority had called for a very open trade system, compliance with World Trade Organization standards and “light touch” fiscal regulations, among other aims.  “You don’t need an UNCTAD economist to tell you that’s an odd choice for a situation of post–conflict State-building and reconstruction,” he said.

In that context, he said it was important to remember that about one third of the productive capacity that had existed prior to the 2000 Intifada had been lost due to occupation and war.  Certainly, investment in industry was needed as part of strengthening the components of domestic demand.  Yet, he did not see that happening in Palestine, except in certain niche sectors.  “Why not?  How do you come out of a conflict with a war-torn economy wanting your State to stand on its own feet when it has no domestic industrial productive capacity?”, he asked, noting that agriculture continued to receive only “pitiful” attention by Palestinian policymakers and international donors.  With high unemployment and poverty rates, it was clear that benefits of growth spurts were not trickling down.  Moreover, he asked, if a Palestinian State emerged in September, its access to markets would still remain totally in Israel’s hands, so what sort of export-led growth was really being considered?

He was very concerned that the Palestinian Authority was making plans for such an economy, when all the recent experiences of neo-liberal market fundamentalism around the world, and many experiences with export-led growth strategies in similarly weak economies in Africa, had failed, in some North African countries, particularly.  While he knew that some might feel that his critique of the Palestinian Authority’s policy framework came from “the fringe of economics and old-school liberationists”, “truth” in economics was decided not by the strength of its theories but whether they fit within certain paradigms of power.  The dissonance between neo-liberal policies and the Palestinian economic reality seemed obvious to him and he wondered why so few seemed to be concerned by it.

Returning to the situation of women, Alia El-Yassir, Head of the West Bank and Gaza Office of the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), identified positive trends, gaps and key steps for making progress.  Using the Palestinian Authority’s own framework, she noted, among other things, that in public administration, a national women’s machinery was in place and the first ever cross-sectoral national gender strategy had been set up “without a push from the international community”.  Also, the Palestinian Authority had pledged its commitment to gender responsive budgeting and to ensuring that gender equality and women’s empowerment receive the required funds.  It had also endorsed the Convention on the Elimination of All Forms of Discrimination against Women.

She stressed that women were contributing at the household level and at the community level, including playing a strong role in local resistance movements.  Yet, it was clear that women were still the most under-utilized resource for socio-economic development, with formal labour force participation at around 15 per cent — among the lowest in the world — and lack of diversification in women’s employment, with approximately 61 per cent in services and 20 per cent in agriculture.  Women were generally forced to work in “hidden sectors” and their work was not considered in economic terms.  Also their assistance to family-owned businesses, such as farms, went mostly unpaid.

Control over household assets and resources, she went on to say, was largely restricted by traditional gender roles. Another key problem was that women’s rights were not protected in the informal sector. Studies had shown, for example, that huge numbers of women in Gaza and the West Bank were not claiming their inheritances, chiefly because they were unaware of their rights in that regard.  The Government must provide social protections for women in home-based and informal economies, and a legal framework should be elaborated for domestic work.  Such actions would put Palestinian women on par with their international counterparts and enhance social equity, she said.

Ms. El-Yassir also said the Palestinian Authority’s commendable commitment towards women’s empowerment must be translated into the State-building plan.  Further, much more must be done to improve infrastructure, which would enhance women’s mobility.  The Palestinian Authority must press ahead with such exercises as gender mainstreaming in ministerial planning and budgeting.  “Investing in women makes socio-economic sense and is an important part of any State-building exercise,” she added.

As for the United Nations, she said the Secretary-General was committed to promoting a partnership between the Organization and Member States to ensure that at least 15 per cent of United Nations-managed funds in support of peacebuilding were dedicated to projects whose principal objective, consistent with organizational mandates, was to address women’s specific needs, advance gender equality or empower women.

Urging participants to consider alternative models to bolster socio-economic development and gender equality, she highlighted an innovative initiative that supported school canteens run by rural women.  That programme balanced socio-economic goals by improving schoolchildren’s health, nutrition and academic attainment, and created sustainable business for women.  If the programme was scaled up, more than half a million children would be impacted and nearly 3,000 rural women would be employed throughout the Occupied Palestinian Territory.

Focusing on investment in youth through education, Salem Ajluni, a consultant with the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), and former chief economist, Office of the United Nations Special Coordinator for the Middle East Peace Process (UNSCO), presented findings from two comprehensive census surveys.  He said those surveys defined youths as between ages 15 and 24.  Between 1997 and 2007, that population had grown at an annual average rate of 3.7 per cent.

Parallel to the demographic progression outlined above, there were important developments in the realm of education for Palestinians in the Occupied Territory.  Most notable were significant declines in illiteracy, higher secondary-school completion rates and a dramatic increase in post-secondary educational attainment, he said.  At the same time illiteracy rates among those 10 years and older had fallen from 11.6 per cent of that population to 5.6 per cent.  Moreover, the portion of the population with only basic abilities to read and write had fallen by about one fifth.

Continuing, he said that both the West Bank and Gaza had experienced similar declines in illiteracy, while advances in post-secondary education had been somewhat more pronounced in the West Bank.  Furthermore, advances in women’s educational attainment were greater than for men in the decade after 1997, especially in post-secondary education.  He provided figures for labour-market demographics, noting that they were impacted, to some degree, by the fact that more youths were attending school.  He said the “explosion” in unemployment had been driven by disruptions on the ground, especially the restrictions on movement and work permits.

Also, the economic agreements signed between the Palestinian Authority had begun to allow outside manufacturers to bring their products into the Occupied Palestinian Territory, and while that had allowed for free trade with the rest of world, local productive capacities had been squeezed out.  As an example, he said that there were no more shoe manufacturers in Hebron, because competitively priced products from Turkey or China had forced them out of business.  He added that Israel’s separation policies had disrupted the construction industry, as many of those Palestinians that had been employed in Israel were no longer allowed permits to work there.

Concluding, he said that if current trends held, one could expect possible improvements in service sector employment for youth.  Yet, productive capacities would remain under pressure.  The entire labour market situation would be impacted by the political exigencies of the Palestinian Authority and the physical and technical realities on the ground.  As such, investing in youth through education was a way to accelerate economic development.  But the main obstacle to that was lack of sovereignty.  “Without policy independence, we can not expect youth to benefit from the high levels of education they have attained,” he said.

When the floor was opened for questions and comments, one speaker said putting in place effective policies that enhanced market participation, trade, local capacity-building and employment would be akin to carrying out “mission impossible” as long as the structures of Israeli occupation remained in place.  “Politics is the overriding issue,” he said, calling on the international community to step in and help the Palestinian Authority identify ways to set up and sustain a viable economy.

While one speaker said Mr. Khalidi’s presentation had been filled with generalizations that weakened his analysis, another said that the problem was not neo-liberal policies, but the fact that as things stood today, the Palestinians did not have control over their policies.  “What had led to the failures so far is the occupation and we don’t have a good strategy to end it,” he said.

Responding, Mr. Khalidi said he had nothing against State-building generally, but to be successful, such exercises must be based on policies that promoted, among other things, clear, State-led development and gradual liberalization.  Neo-liberal economic policies were not conducive to the sustained growth of a nascent State.  If the Palestinian Authority began discussing issues, such as customs and trade policies, “we will then not be trying to attain some prescribed threshold, but we will be putting our hands on the levers of economic sovereignty.”

The United Nations Seminar on Assistance to the Palestinian People will meet again at 3 p.m. in plenary to consider laying the groundwork for the sovereignty of a Palestinian State, and to conclude its work.

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For information media • not an official record