Industry and Trade
Industry
The Industrial Sector of the Palestinian economy accounts for 17% of the Gross Domestic Product (GDP). There are some 14,849 industrial establishments which in normal times employ about 69,367 workers. The great majority of these are small and medium manufacturing enterprises producing garments, household goods, food products, etc. Many firms, particularly in the garment industry, which in Gaza is the second largest employer after the construction sector, work as sub-contractors to Israeli businesses, making them extremely vulnerable.
Trade
The Palestinian economy is heavily dependent on imports of both new materials for industry as well as consumer goods, and on exports for needed foreign exchange. International trade accounts for about 80% of the Palestinian GNP. Israel is by far the major trading partner, and all trade with third countries must pass through Israel, giving it a strong hold over the international trade sector. Furthermore, as the World Bank and UNSCO reported, during the Intifada closures and other restrictions reduced the gross national income by approximately US$ 5.4 billion—an entire year’s worth of income.
UNDP ASSISTANCE
PAPP’s activities in support of the industrial and trade sectors has been provided mainly in partnership with the PA Ministry of Economy and Trade and UNCTAD, (the UN Conference on Trade and Development), and other institutions.
Results Achieved
Industry
- Feasibility studies in several industrial sectors and training of entrepreneurs in the establishment of small and medium size private entrepreneurs.
- In Nablus, workshops have been provided for an additional 60 small enterprises behind the Central Wholesale Market.
- A Palestinian Investment and Promotion Agency has been established in Ramallah to promote domestic and foreign investment in the industrial and other sectors of the Palestinian Economy.
International Trade
The objectives of PAPP’s assistance in the international trade sector are two-fold:
- One, to lesson dependence on Israel by expanding trade with other countries of the region as well as overseas.
- Two, to provide direct access to overseas markets through enhancing the capacity of the Gaza International Airport and preparations for the establishment of the Seaport, also in Gaza.
- Technical assistance has been provided to the Ministry of Economy and Trade to establish trade points abroad that provide information to other countries regarding trade opportunities with the West Bank and Gaza.
- Training and advice have also been provided to build up the Ministry’s capacity in such areas as investment law and the design and negotiation of trade agreements.
- A complementary sub-regional project has been supported, aimed at the expansion of trade with Jordan, the Palestinian territories second most important trading partner after Israel.
- At the Gaza International Airport, PAPP formed the construction of the Security Facility, and provided the equipment through a contribution of US$ 4.4 million, received from the Government of Japan.
- A detailed proposal for the building of a Cargo Facility was prepared for the construction of which, Germany subsequently approved $US 40 million under a bilateral agreement. Construction has not yet begun because of the current emergency situation.
- Training and technical advice have been provided to the Palestinian Seaport Authority which will be responsible for the operation of the Seaport when constructed. Regrettably, the initial works were destroyed in a military operation, and this important project is now on hold.
Internal Trade
- Hundreds of miles of farm-to-market and other rural roads have been rehabilitated on newly constructed, mainly through PAPP’s Local Rural Development Programme.
- Large modern wholesale markets have been constructed in 3 major population centres; Tulkarem and Nablus in the West Bank, and in Gaza City.
IMPACT
Over the past few years and up to 1999, the industrial and trade sectors of the Palestinian economy have shown considerable improvement from the many forces, including PAPP, that have contributed to development in the sector. Among the more significant developments are:
- A marked increase in Industrial output and exports
- A clear increase in Palestinian trade with countries other than Israel
With regard to internal trade; PAPP has contributed to the following:
- In rural areas, travel time to farm markets has been reduced, lowering the risk of spoilage of produce on the way.
- In the 3 urban areas where wholesale markets have been established, as well as the surrounding villages, the range of products available to retailers and the general public has been significantly broadened lessening the disparity in consumption patterns between urban and rural areas.
In short, the efficiency of the overall Palestinian marketing system has been significantly enhanced to the benefit of both producers and the consuming public.
Unfortunately many of those gains recently have been seriously reversed as a result of Israel’s harsh closure policy and military aggression.
The Construction Sector
The construction sector in the oPt accounts for a great segment of the Palestinian GDP. It is the largest employer in the Gaza Strip, and one of the largest in the West Bank. The sector comprises contractors, consulting design firms, and producers of construction materials.
UNDP/PAPP Assistance
PAPP is providing enormous assistance to the construction sector through its Engineering Unit, which is responsible for the implementation of the large number of capital projects supported by the Programme. These number 50-60 at any one time and range from small schools and health clinics to major hospitals, water and sanitation systems, municipal buildings and many other facilities. The total per annum value of these projects is between $US 50 and 60 million.
In addition to providing this large volume of work to some 15 contractors and related firms, the unit also provides the following support:
- On-site training and technical advice to contractors through the Unit’s own on-site engineers who visit all sites at least 3 times a week, and who are posted full time at large project sites.
- Training and advice to consulting design firms to upgrade their capacity regarding technical specifications and to update their information regarding the best available materials and equipment.
- Advice to local firms producing construction materials on how to upgrade their quality.
Impact
- Many contractors, design firms and producers of construction materials would have gone out of business over the past 2 years if it were not for PAPP’s Capital Assistance Programme.
- Not only have they continued to survive when so many industrial firms have been forced to shut down, the quality of the services they provide have also been significantly enhanced.
- This has put them in the position to contribute more effectively to economic and social development of the oPt's when conditions return to normal, and the rebuilding effort can be expanded.
