UNCTAD report on assistance to the Palestinian people – Action taken – Report of the Trade and Development Board

REPORT OF THE TRADE AND DEVELOPMENT BOARD*

Forty-fourth session

(13-23 October 1997)

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* The present document is an advance version of the report of the Board on its forty-fourth session.  It will be issued in final form in Official Records of the General Assembly, Fifty-second Session, Supplement No. 15 (A/52/15).

I.  ACTION BY THE TRADE AND DEVELOPMENT BOARD ON SUBSTANTIVE ITEMS OF ITS AGENDA

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E.  Technical cooperation activities (agenda item 6)

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(b)  Consideration of other relevant reports:

At its 888th plenary meeting, on 17 October 1997, the Trade and Development Board took note of the secretariat's report on UNCTAD's assistance to the Palestinian people (TD/B/44/10).  (Further to the provisions of General Assembly resolution 47/445, an account of the discussion in the Trade and Development board under agenda item 6 (b) is annexed to the present report (see annex III).

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Annex III

DISCUSSION IN THE TRADE AND DEVELOPMENT BOARD UNDER AGENDA ITEM 6 (b):

REPORT ON UNCTAD’S ASSISTANCE TO THE PALESTINIAN PEOPLE ^…./

1. For its consideration of this sub-item, the Board had before it the following documentation:

“Report on UNCTAD’S assistance to the Palestinian people” (TD/B/44/10).

2. The Officer-in-charge of the Special Economic Unit said that the thrust of UNCTAD’s work in this area had focused upon operational activities, in tune with the changing needs of the Palestinian people and in line with the new opportunities created by the Middle East peace process. The secretariat’s Programme of Technical Cooperation Activities in Support of Palestinian Trade, Finance and Related Services had been endorsed by the Palestinian Authority (PA), and UNCTAD’s efforts represented a concrete response to requests of the PA for technical assistance, in a manner that emphasized synergies between UNCTAD’S analytical and operational competencies.

3. The report before the Board reviewed recent orientations in UNCTAD’s work on this issue, in the light of the critical economic situation in the Palestinian territory and the persistent need for international assistance. Political and security considerations continued to have a strong impact on Palestinian legal, regulatory, institutional and human resource development, despite the promises of the Israel-Palestine peace accords. Coupled with the uncertainty surrounding future political arrangements, this had prolonged economic hardship and uncertainty. Such a situation could, at best, reduce public confidence in the economic dividend widely expected from the peace process and, at worst, promote stagnation and deprivation that could undermine the peace process.

3. The vulnerability of the Palestinian economy to the changing fortunes of the peace process had reinforced a host of structural weaknesses arising from prolonged neglect and isolation. Recent trade performance indicated a precarious external trade position, and there were a number of problem areas where international support, including technical cooperation, was urgently required.

4. An increasingly participatory approach to technical cooperation had become necessary to enable the United Nations to respond positively to General Assembly resolutions on assistance to the Palestinian people and the requests of the Palestinian Authority in priority areas. Of the 10 projects detailed in the report, the secretariat had to date been able to successfully implement one, commenced the implementation of a second, and had just been informed of approval for funding of a third. For the three funded projects, UNDP had allocated more than $400,000.

5. The orientation of UNCTAD’s future assistance to the Palestinian people would be guided, by the provisions of UNCTAD’s subprogramme 9.1 in the United Nations Medium-Term Plan for the period 1998-2001. The secretariat would continue to seek the active support of various sources of extrabudgetary funding, as well as the guidance of the Board.

6. The representative of Palestine expressed his satisfaction at the reinstatement of the item on assistance to the Palestinian people in the agenda of the Board and thanked the Special Economic Unit for its unique efforts in providing different forms of assistance in support of Palestinian development efforts. He was pleased to convey the affirmation of the Secretary-General of UNCTAD that the work of the UNCTAD secretariat, in particular the Special Economic Unit, for assistance to the Palestinian people would continue with the same vitality as before. This would necessitate in particular the appointment of a new Chief of the Unit so as to maintain the momentum of work and efforts to mobilize extrabudgetary funding. The approach to technical cooperation adopted by the secretariat in connection with the Palestinian people set an example for other organizations.

7. The report before the Board summarized the main features of the critical, deteriorating Palestinian economic situation, and confirmed the difficulties facing Palestine today in its efforts to lay the basis of a modern national economy. In particular, he noted the destructive economic impact of Israeli measures since 1996 on the livelihood of workers, agricultural output and trade, investment and industrial activity. Most recently, Israeli measures had halted the orderly transfer of customs and other tax receipts owed to the Palestinian Authority, as stipulated by the accords between the two parties. While insisting on the mutual respect of economic accords between Palestine and Israel, he also called for mutual respect for the interests and aspirations of the Israeli and Palestinian peoples. Palestine had not signed its accords with Israel to become an appendage or agent, as some might imagine. Palestine had chosen the strategic option of peace with Israel for a better future for its people in their independent state on their national soil, with Jerusalem as its capital. It was high time for Israel and other hesitant countries to explicitly recognize the inevitability of the exercise of the right of the Palestinian people to self-determination.

8. UNCTAD must continue its valuable research on Palestinian economic prospects, while intensifying its activities in the field of technical cooperation. The secretariat’s project proposals reflected important priority areas for the Palestinian economy, and he welcomed the efforts by the secretariat to mobilize the necessary funding for them. He called upon the members of the Board, and especially members of the Consultative Group of donors, to make the necessary resources available for their rapid implementation. In concluding, he emphasized the continuing historic responsibility of the United Nations, including UNCTAD, in respect of the Palestinian issue until the peace process succeeded and Palestine could take its place as a full member of the Board and other international agencies.

9. The spokesman for the Asian Group and China (Sri Lanka) said that since the establishment of the Special Economic Unit in 1985, UNCTAD had become a prominent and reliable source of information and analysis on the Palestinian economy. The orientation of the secretariat’s work had developed in line with the new circumstances and the growing needs of the Palestinian people.

10. The establishment of the Palestinian National Authority had been a welcome development that had created new opportunities for the emergent Palestinian economy, which, however, was still vulnerable and at risk from the threats to the peace process. The stagnation in Palestinian economic activity and the sharp decline in Palestinian external trade over the past few years posed serious questions as to the economic benefits that the Palestinian people could expect from a peace process which had yet to bear its full fruits. He stressed the continuing responsibility of the United Nations in respect of the question of Palestine in general and the economic and social plight of the Palestinian people in particular.

11. The setbacks and problems experienced in the recent period had created new challenges for the Palestinian Authority in planning and managing the development of the economy. This had created new responsibilities for UNCTAD in terms of intensifying and widening the scope of its assistance. He praised the integrated manner in which the secretariat had drawn upon its analytical and operational capacities to provide concrete proposals for technical assistance to the Palestinian people. The success in mobilizing resources from UNDP attested to their seriousness and relevance.

12. He hoped that all concerned members of UNCTAD would give serious consideration to helping in mobilizing the required support for technical assistance activities, which would deliver cost-effective and much-needed assistance to the Palestinian people. With further progress in the peace process, it was expected that UNCTAD’s role in this area would grow.

13. The representative of Pakistan said that the review of the policy environment affecting the Palestinian economy made for very sombre reading. The hopes raised by the peace process were far from being realized, with a further deterioration in the already disheartening economic indicators. The stagnation in income, the growing poverty and the growing unemployment posed critical challenges for the performance of the economy. The dialectic between peace and development was perhaps particularly evident in the case of Palestine. He noted the efforts of the Palestinian Authority to strengthen regulatory and institutional frameworks in order to improve the environment for investment in trade, but given the extremely difficult political and security environment, the economic situation of the Palestinian people remained a matter of great concern.

14. As provided for in subprogramme 9.1 of the United Nations medium-term plan for 1998-2001, UNCTAD should continue to assist the Palestinian people to develop capacities for effective policy-making and management pertaining to international trade investment and related services. This gave UNCTAD a fair amount of scope, and he urged the secretariat to formulate programmes which adhered to two basic principles: first of all, all programmes should be demand-driven, especially since, when state structures were weak, with limited managerial capacities, there was a tendency for well organized international secretariats to sell their programmes, something that should not happen. Secondly, the question of coordination with the large number of agencies operating in the field in Palestine became of paramount importance. Finally, he questioned the factors behind the gap referred to in the report between the total pledges by the international community to assist the Palestinian Authority and the actual disbursements.

15. The spokesperson for the African Group (Tunisia) expressed full support for UNCTAD’s assistance to the Palestinian people. She congratulated the UNCTAD secretariat for going beyond the stage of analytical work to the stage of operational activities, as well as for its consultation with the Palestinian Authority for the elaboration and implementation of assistance programmes. Nevertheless, she could not understand how the necessary funds for the establishment of the two Palestinian Trade Points could not be mobilized given the popularity of the Trade Point network with the donor community. With the addition of a private sector role, funds should be easily available. She called on UNCTAD to pursue its fund-raising efforts in this regard more vigorously.

16. UNCTAD was required to take into consideration the daily changes in the situation in Palestine in updating its programmes, so as to respond in the best possible manner to the specific needs of the Palestinian Authority. The latter was well advanced in associating the private sector in all programmes under way. She noted the lack of funding for a certain number of approved pending programmes, and she called upon the donor community to respect their engagements towards the Palestinian Authority so that UNCTAD and other agencies could implement the appropriate programmes.

17. The representative of Morocco expressed his delegation’s satisfaction with the implementation of the programme of technical cooperation in favour of the Palestinian people. However, the degradation in the economic and social indicators for the Palestinian territory were such that the Palestinian people required the technical assistance of UNCTAD more than ever before. The stagnation of trade, the trade deficit and problems in the labour market and in living conditions in general were all factors which mitigated in favour of intensified technical support for the Palestinian people.

18. In accordance with the priorities already established and the relevant General Assembly resolutions, UNCTAD must strengthen and improve its technical cooperation in favour of the Palestinian people. He noted with great satisfaction that the Unit in charge of technical assistance to the Palestinian people had been maintained. It was hoped that donors would be able to augment their financial support so that the programmes indicated in the secretariat report could be implemented in full.

19. The representative of Egypt expressed appreciation for the transformation of the work of the Special Economic Unit from the mainly analytical realm to operational activities which drew upon the analytical work. He called upon the secretariat, as well as States and organizations, to redouble their efforts to make available the necessary resources to implement the seven pending unfunded projects mentioned by the secretariat, so as to assist the Palestinian people in building their economy. In this respect, it would be useful to know what factors had delayed the disbursement of funds pledged by different countries to assist the Palestinian people. In conclusion, he urged the States concerned to expedite the delivery of funds according to existing pledges.

20. The Officer-in-charge of the Special Economic Unit reaffirmed that the secretariat would redouble its efforts to mobilize the necessary resources for the implementation of pending technical cooperation projects. As for the low rate of aid disbursement, he cited four factors. Initially, there had been some delays on the part of the donors themselves in the actual mobilization and allocation of the resources pledged early on in the peace process. Subsequently, the institutional capacity of the Palestinian Authority to manage a substantial programme of assistance had also become a factor. Thirdly, with the deterioration of the economic situation since 1996, a large portion of potential development funds pledged by donors had been diverted to current expenditures of the Palestinian Authority and various relief programmes for unemployed workers. A fourth factor had been the issue of coordination between donors, recipients and the various agencies involved. This last problem appeared to have been resolved, and henceforth there would be one integrated Palestinian Development Plan presented to donors which would combine World Bank, United Nations and bilateral and other projects within a comprehensive framework.

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^…./For the action taken on this item, see section I.E (b) above.

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