Fostering active international solidarity with the Palestinians,

solidifying the economic underpinnings of an independent State

United Nations Office at Nairobi

1 and 2 July 2014



1. The United Nations Seminar on Assistance to the Palestinian People was held on 1 and 2 July at the United Nations Office at Nairobi (UNON) with a focus on “Fostering Active International Solidarity with the Palestinians – Solidifying the Economic Underpinnings of an Independent State.” 13 expert speakers from Palestinian and international civil society organizations, the private sector, local governments and UN Agencies, Funds and Programmes addressed the Seminar, with representatives from over    20 Member States, three intergovernmental organizations, civil society and local UN representatives actively participating.

2. Speakers in the Opening Session remarked on the significance of holding the Seminar in Africa, a continent that itself faced colonization and oppression but had nevertheless achieved political independence and rapid economic growth.  Holding the meeting at the UN’s African Headquarters, the third largest UN headquarters after New York and Geneva, was an appropriate testimony to the political support provided by Africa to Palestine in its struggle for justice.  The Permanent Representative of Kenya to the United Nations Environment Programme and to UN-Habitat and Representative of the Government of Kenya welcomed participants during this International Year of Solidarity with the Palestinian People. The theme of the Seminar reflected the challenges, given the troubling socio-economic impact of Israel’s occupation.  Recognizing that more than 40% of all Palestinian households were food insecure, the very survival of the Palestinians was threatened. He said that the international community must urge the lifting of the restrictions on access to land, water, minerals and natural gas reserves, as these were the factors of production that would allow businesses to thrive.  Kenya was collaborating with the Palestinian people through the conclusion of bilateral education, trade, culture, youth, sports and tourism agreements, which would contribute to the quality of life in the OPT and strengthen the bonds of friendship and cooperation.  

3. In his message to the Seminar, read by UNON’s Director-General, the Secretary-General of the United Nations condemned the murder of three Israeli teenagers abducted on 12 June, emphasizing that there can be no justification for the deliberate killing of civilians. He called on Israeli and Palestinian authorities to work together to bring the perpetrators to justice.   He was concerned about the negative trends in the West Bank, including the recent killings of Palestinians, the repercussions of Israeli military operations, continued settlement activities and demolitions of Palestinian homes and property, as well as indiscriminate rocket firing.  He repeated calls for the full opening of crossings into Gaza and referred to the dire economic and humanitarian situation there, saying that strengthening Palestinian institutions and improving governance is key to stimulating investment and development, noting the importance of support for the National Development Plan (NDP) 2014-16.  The Secretary-General concluded his message by saying that the situation on the ground and in the wider region made it clear that negotiations and compromise were essential to achieve a settlement to the conflict.  Without a credible political horizon, the Oslo paradigm was in real jeopardy.  

4. The Chairman of the Committee on the Exercise of the Inalienable Rights of the Palestinian People recounted that the UN General Assembly voted decisively to grant Palestine non-member observer State status, through Resolution 67/19 of 29 November 2012.  The Chairman appealed to the donor community to focus on Palestine and to respond to the needs outlined in its National Development Plan. The Seminar would focus on the need to break the vicious cycle of the occupation, which cost the Palestinian economy some $7 billion dollars a year.  The international donor community had become the life-line for Palestine, and its investments should not be destroyed.  He asked if it was time to remind Israel of its responsibilities as the occupying Power and to hold it accountable.  He implored participants to convey to their capitals that the status quo was not sustainable – greater political and financial assistance was needed immediately, emphasizing that a new push was required to launch meaningful international engagement with the parties to restart negotiations, bolster reconciliation, strengthen Palestinian institutions, and end the blockade of Gaza.  These were all mutually reinforcing goals.

5. The Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) said that UNCTAD’s Assistance to the Palestinian People Unit extended support to Palestine’s nascent finance and development strategies, foreign direct investment, trade facilitation and logistics, enterprise development, and competition policy, and it would continue to stand ready to provide support to the Palestinian people to build the capacities required for the efficient management of their economy and economic prosperity.  The Permanent Observer of the State of Palestine to the United Nations and Representative of the State of Palestine stressed that while the Palestinian people and their State existed, their land was occupied which had to end.   After citing events leading to the failure of the negotiations, he asked how the occupation could be ended while Israel intensified its settlement activities by 123% and continued to kill with impunity.  He denied involvement of the Palestinian factions with the killing of the three young settlers, and said the deaths cannot justify collective punishment.  He called on the international community to let Israel know that there would be consequences for illegal actions. The solution was to make the occupation costly to the Israelis – only then would they calculate the losses and conclude a negotiated settlement; until now, the occupation only cost the Palestinians and was of net benefit for Israel.  The opening session ended with statements of solidarity by the Permanent Representatives of Indonesia, Senegal and Malaysia to UNON, each describing specific initiatives in their countries and regions in support of the Palestinian people.

Plenary I – The socioeconomic and humanitarian situation in Palestine

6. Speakers in the first plenary from UN Agencies, Funds and Programmes in Jerusalem and Gaza and a civil society organization on the ground in Bethlehem provided the socio-economic and humanitarian context.  Aid and politics were closely linked, given the impact of movement and access to economic development.  The $1 billion of UN programming had always been an essential support to Palestinian State building, but it had taken on greater importance in the current environment, and with the formation of a Government of national consensus headed by Prime Minister Rami Hamdallah, uniting the West Bank and Gaza under one legitimate Palestinian authority.  

7. The situation in Gaza, under its 8th year of Israeli blockade, was described as unsustainable environmentally, economically and politically, and had worsened since the closure of the tunnel network from Egypt.  It was an entirely preventable and man-made crisis. Economically, Gaza had de-developed from a well-rounded middle-income economy to a situation where 41% were unemployed and 57% were food insecure. There was a shortage of 70,000 housing units due to damage from the 2009 Operation Cast Lead and natural population growth, and 12,000 people were still displaced after their homes had been destroyed. There was a shortage of 250 schools.  Agriculture, food processing, and textile productions had been affected because of shortage of materials and lack of access to markets.  Construction materials used to come through the tunnels but after their closure, unemployment rates increased as construction ceased. Due to current restrictions, only 7 patients had crossed to Egypt in April, compared to 7000 per month in 2013.  The power plant was on the verge of running out of fuel affecting the basic operation of clinics and sewage and water systems. Power was already off 15-16 hours a day. Environmentally, the most serious issue was the availability of drinking water.  Less than 10% was safe for drinking, and there would be no potable water in Gaza by 2020 under current conditions. The problem could be resolved by desalination, but that required power and investment.  Politically, the fact that salary payments for the 40,000 de facto government employees had not been paid for the last three months meant that disgruntled former employees were a source of instability.  The situation in the West Bank was less dire, but movement was restricted impacting the economy.  A removal of those restrictions could see the economy grow significantly.  Area C entailed more than half the land in the West Bank, much of it agricultural and resource rich, but it was inaccessible to Palestinians. If economic activities were liberated, it would have a significant impact on the development of businesses in agriculture, Dead Sea mineral exploitation, stone mining, quarrying, construction, tourism and telecommunications.   

8. Out of some 40,000 university graduates the local economy can absorb less than 10%, and unemployment was high throughout the territories, particularly for college educated women. Participation by women in the workforce was particularly low, down to 17.3% in 2014.  Conditions for youth were also troubling, with only 49% of young men aged 15-24 in the labor force compared to 8.8% of young women.  For many Palestinians, working for Israeli settlements was not a choice but a necessity.  Men worked in construction and the industrial sector while women and children worked in agriculture or domestic work.  Women were particularly exposed to abusive practices by labor brokers, including excessive fees, wage deduction and sexual violence.  Workers were also exposed to occupational safety risks and hazardous and humiliating conditions without adequate protection.

Plenary II – The Palestinian National Development Plan

9. The Second Plenary of the Seminar focused on the Palestinian National Development Plan See http://www.mopad.pna.ps/en/index.php?option=com_content&view=featured&Itemid=101 (NDP) 2014-2016, entitled “Long-term strategies of the State of Palestine for Economic Development and Growth.”  Seven pillars, approved by Palestine’s Council of Ministers guided the development of the Plan: (1) Enhanced national ownership (2) Broad participation (3) Results-oriented planning and budgeting (4) Realistic outputs (5) Institutionalized planning processes and enhanced accountability (6) A gender responsive approach (7) Respect for Human Rights.   Based on performance evaluations and lessons learned from earlier plans, the Plan was broken down into four sectors:  (1) Economic Development and Employment (2) Good Governance and Institution Building (3) Social Protection and (4) Infrastructure.  The overarching goal was to improve services to the Palestinian people in areas such as water, roads and energy supply, especially in the Gaza Strip.  Implementing the Plan in the Occupied Palestinian Territory would be extremely difficult, given the difficult conditions on the ground, as explained in Plenary I.  Despite the obstacles, the Palestinian government was doing its utmost to provide services to its people and was also trying to increase resources from donors and alternative financing arrangements.  The highly participatory approach taken in the Plan’s development and implementation was emphasized and also broadly recognized by other participants, who noted that the Plan was well structured, well documented and well written.    It was also noted that the NDP had been developed in close collaboration with the UN System in Jerusalem, ensuring close collaboration in terms of implementation.  The UN Development Assistance Framework was drafted in parallel, and was fully complementary.   

10. The Initiative on the Palestinian Economy (IPE) See http://blair.3cdn.net/a0302ab9e588825b29_1bm6yhjay.pdf, launched under the Office of the Quartet Representative involved 18 industries, 100 local experts advisers, an Advisory Board and included some 50 projects across eight sectors, fully complementing the NDP’s approach and focus on infrastructure (water, power, telecommunications), employment (agriculture, light manufacturing, construction,  building materials) and tourism. The rationale behind the IPE was to enable and unleash the private sector – where possible private financing would be secured with the public role limited to loan guarantees and financing for large-scale projects.  Development bonds and other alternative financing vehicles were also part of the plan.

Palestine benefitted from a lean and dynamic private sector with a strong entrepreneurial spirit, currently generating about $350 million in profits.  The main challenge was employment generation – the goal was to create one million jobs over the next fifteen years in order to get unemployment below 8% and stem the emigration of the best qualified.  If implemented the IPE would also increase tax revenue, by about $650 million, reducing the need for official development assistance.  However, implementation would be difficult under the current context, as private investment had fallen by 40% in four years.  While the IPE represented a public-private partnership to attract new investment, many investors, including multinationals and those from the Palestinian diaspora, perceived the Palestinian economy as small ($10 billion), corrupt and complex.  These attitudes were dated and needed to be better informed; however experience showed that once investors learned more about the actual situation in Palestine, they were often more interested.  As an example, tourism was a sector that could achieve multiple goals, simultaneously reducing unemployment, bringing in investment and changing attitudes of visitors.

11. Local, municipal and regional approaches to community development and capacity building were presented as complementary initiatives to improve transparency, local government services and socio-economic development while supporting ongoing state-building efforts.  Local Economic Development was successful because every city, area or community was unique and had its own competitive advantages.  In the case of the Palestinian local economy, micro, small and medium size enterprises constituted the majority of the economy and those types of enterprises could benefit directly from local economic development programmes. However, local governments in Palestine were limited in their capacity, so initiatives needed to take this into account.  For example, over the past twenty years, dozens of French local authorities had engaged in cooperation with their Palestinian counterparts, hoping to contribute to the peace process and support the creation of a new State.   The hopes raised in 1994 were undermined, but the results of twenty years of decentralized cooperation with Palestine were extremely rich in human results, while admittedly disappointing in political terms. Nevertheless, strong relationships had been forged with both Palestinian and Israeli partners who had a real desire to move forward.  The question was how to achieve sustainable development in the middle of a context of conflict?   City to City diplomacy was useful but it cannot circumvent the realities, nor should it become an excuse for national governments shirking their responsibilities.  The ensuing discussion featured a lively debate on the timing and sequencing of economic planning and development activities, could such planning and development actually take place when conflict was omnipresent. The consensus was that these activities were needed to inspire the population and ultimately had to take place alongside of humanitarian and other initiatives to respond to ongoing crises.

Plenary III – Towards a New Aid Paradigm

12. The Seminar’s third plenary focused on the mobilization of international assistance and its effective use for sustainable growth, including a discussion on a new aid paradigm.   No one in the developing world believed that foreign aid would unlock development.  Europe, then East Asia experienced transformative economic change in the last few decades, in the case of Asia, this occurred with little external aid.  Rapid transformation had happened in ways which were once unimaginable.  This had set the stage for very high expectations of what can happen and what was possible in a world where there was no colonialism, no occupation and no exploitation.  In a world where poverty was unacceptable, where diseases had been eradicated, where social inclusion and harmony were a primary part of society, and where economic prosperity was a driver of change.  A world where human rights were protected everywhere.  The new set of 17 Sustainable Development Goals would be universal, and transformative, and would have a cross-cutting effect on the social, economic, environmental and political work of nations.  However the occupation of Palestine stood in direct contradiction to these goals – none of these goals could be achieved when people were at war or were being oppressed.

13. Palestine saw 1.5% GDP growth in 2011-12 – this was lower than population growth so Palestinians were growing poorer year on year. Enlarging the Government’s economic policy space to promote sustainable development and competitiveness was an important goal, and that was critical to breaking the cycle of aid dependency.  Significant revenue leakage from direct and indirect imports was occurring, for example 39% of official Palestinian imports from Israel were actually produced in a third country, before being re-exported to the OPT duty-free.  Estimates for 2010 and 2011 are that $115 million of revenue per year had been lost this way.  Smuggled goods were another major problem, with 25-35% of imports smuggled into the territory.  Capturing the leaked revenue would expand the fiscal policy space and the ability of the Palestinian Government to provide fiscal stimulus, raising GDP by 4%; and allowing the economy to expand its employment generation capacity by more than 9,000 jobs per year.  In addition, an overvalued Israeli Shekel undermined Palestinian competitiveness; lacking its own currency, Palestine was unable to pursue independent monetary, exchange rate, and interest rate policies, relying solely on fiscal tools.  Nevertheless, Palestine was not yet ready to issue its own currency, training of its Central Bank officials would be required, as would greater confidence in the Palestinian economy more generally.  

14. On the ground, 94% of building permits had been rejected, and less than 1% of area C had been assigned for Palestinian development needs by the Israeli Military Commander. Mobilizing, coordinating and delivering developmental and humanitarian assistance was a challenge under the occupation; Israel had imposed a number of restrictive policies and practices that increased humanitarian needs and impeded development.  While recognizing Israel’s legitimate security concerns, the land, sea and air restrictions imposed on the Gaza Strip by Israel may contravene Israel’s obligations under international humanitarian law, and must be lifted.  Where security threats necessitate restrictions on the free movement of people and goods, the restrictions must be in compliance with international law; must be proportionate to a specific threat and temporary in nature.  The current restrictions continued to hit the poorest the hardest; they impeded development of a sustainable local economy and increased food insecurity and dependency on aid.  They also undermined access to specialized health and education services and restricted normal family life.  It was therefore incumbent on the international community to press both Israel and Egypt to drastically reduce the restrictions on access to the Gaza Strip. In Area C, Israeli military authorities were destroying aid infrastructure built without pre-authorization, many aid agencies were preceding without such authorization out of principle, resulting in destruction of these assets. Israeli policies deliberately targeting foreign assistance and related infrastructure in this manner must be halted.

Closing session

15. The Permanent Observer of the State of Palestine to the United Nations and Representative of the State of Palestine said that after two days of gloomy presentations, participants should not conclude that the cause is hopeless.   The objective was not to depress, but to inform – Israel’s occupation had to cease and independence of the State of Palestine needed to be achieved, similar to what had happened to States in Africa – and African support was fundamental.  The Chairman of the Committee on the Exercise of the Inalienable Rights of the Palestinian People recapped the Seminar and reminded participants of the moral responsibility to fight against the injustice inflicted upon the Palestinian people and the importance of collective solidarity taking the shape of concrete assistance for sustainable development and growth. Noting that the peace process had yet to bear the fruits the Palestinians had hoped for, everyone must redouble their efforts to support the Palestinian people to exercise their inalienable rights to independence, allowing them to live free from occupation in a thriving economy.