World Congress for Middle Eastern Studies

Barcelona, July 19th - 24th 2010


Palestinian Economy and Development (456) - NOT_DEFINED activity_field_Panel

· NOT_DEFINED date: FRI 23, 11.30 am-1.30 pm

· NOT_DEFINED language: English

· NOT_DEFINED description: Chair: Anja Zorob (Professor, Center for Middle Eastern and North African Politics, Otto Suhr Institute for Political Science, Freie Universitaet Berlin, Germany)

Discussant: Nayif Saleem (PhD. Student, Doctorant, Czech University of Life Sciences, Prague)

Paper presenter: Rania Jaber and Dema Hanya (Professor, Dean of College of Economics / Professor, Birzeit University, Palestine), “PPPs in Palestinian municipal activities”
This research aims to examine the possibility of applying the concept of private participation in managing the municipal business activities including utilities'' services in the Palestinian local government units. In order to fulfill the stated purposes of this study, two special questionnaires were articulated and directed to one hundred municipal citizens and 140 municipal stakeholders from local governments and other related agencies. The participated stakeholders included two groups; The first group was the top municipal officials of the ten Palestinian municipalities, the second group (named for the purpose of this study as the other stockholders) included top staff from the ministry of the Palestinian local governments, officials from water agencies, and electricity corporations, managers of private sectors participated in operation some of the municipal business projects.
The study found that almost all forms of PPPs experiences existed, but, at low scale level. This includes ownership and operation by private sector in yearly contract, ownership and operation by private sector in more one year contract, ownership and renting by private sector in monthly basic, build, operate, and transfer (BOT), Owned and operated by Independent government Agency, and owned and operated by private sector. In addition, the study found that the majority of municipal citizens still prefer that the municipalities own and operate the majority of municipal activities and projects, while private participation should be limited to operating some selected municipal projects in yearly or long term contracts. Finally, this study concluded that the majority of municipal officials including municipal directors are less enthusiastic compared to other stakeholders regarding the partnership with the private sector for both operating the essential services as well as other business projects. Finally, the study recommended that various laws, regulations and bylaws should be adopted to cover various aspects of the private participation with local government units including long contract arrangements and controlling of prices for services transferred to private sector, bids procedures, and BOT contracts. And awareness campaigns regarding private participation of municipal activities, projects and businesses should be directed to local government staff in order to clear issues of employments and job security status in case of transferring some of municipal activities, departments and projects to private sector.

Paper presenter: Mohamed El Dahshan (Researcher, Institut d'Etudes Politiques de Paris, France), “Foreign direct investment in post-conflict countries, with a special mention of Palestine and the Sudan”
It is now proven that economic development can bring stabilization to fragile states and reduce the incidence of conflict. International aid and foreign assistance cannot, however, bring about the required change on its own; its priorities may be inadequate, but more importantly it is less present a few years after the peace - when, as it was proven, it is most needed and effective. Foreign Direct Investment proves to be a valuable tool to help rebuild the local economy, encourage the reconstruction of infrastructure and assist in bringing about the necessary change. Yet elements of attraction can be hard to come in post-conflict locations. Market routes may be underdeveloped and government-provided subsidies hardly affordable. The legal framework can be inadequate. Furthermore, not all foreign investment is necessarily beneficial; a preference for quality over quantity needs to be introduced - investment seeking savage extraction deals, for instance, needs to be monitored. The Middle East, home to multiple post-conflict countries providing the basis of the analysis and standing to gain the most from the developed policy recommendations. Taking a practical approach, this paper explains the situation of foreign investment and the difficulties that both the firm and the host country face, relying on economic analysis to determine the strong and weak 'selling' points for the flow of investments, from the presence of extractive industries to labour costs to access to markets. It then evaluates the methods employed by the recipient countries, as well as by the international community and international organizations to encourage private investment to PC countries, from improving the business environment to providing international investment guarantees. The paper argues that only particularly designed and innovative policies, benefiting from a degree of support and supervision can encourage and allow for the optimal utilization of FDI in the particular situations of a post conflict economy. The paper then focuses on the case of the Palestinian economy, and benefits from the author's field experience in the West Bank, and offers results from a qualitative survey conducted among businesspersons and investors there. Despite being classified by some as a 'low-intensity conflict', Palestine nevertheless displays the characteristics of a post-conflict country. However, its unique situation and the specific existing hurdles - primarily political - means that unusual policies and means need be deployed. Other Middle-Eastern conflictual situations (such as the Sudan and Iraq) will also be discussed, in less details. And a separate section covering the case of the Sudan will most likely be included, pending an expected research mission to North and South Sudan in the next months.

Paper presenter: Mahmoud Dodeen (PhD Researcher, Free University of Brussels, Belgium), “To What Extent Are The Listing Rules Efficient for The Palestine Securities Exchange?”
This paper is designed to examine the efficiency of the securities admission rules applicable to the capital market in the occupied Palestinian territories, through an exploration of the theoretical and empirical aspects of the theme. The Palestine securities exchange (PSE) is compared to the London Stock Exchanges and the relevant EU Directives, and envisages the priorities and features of the Palestinian comprehensive economic environment. Given the predominance of SME’s and family-owned enterprises in the West bank and Gaza Strip economy, there are only 38 listed companies thus far and the potential for new applicants appears limited. The PSE is thinly traded and the index is relatively high and very volatile, which could potentially amplify economic shocks. In fact, the regulations of the PSE are controversial and discouraging, mainly because of the domination of businessmen elite on the decisions making position. This power comes from the fragility of the political prestige and economic status of the Palestinian Authority, where most investors dominate on the most investment sectors in the Palestinian territories. This fact has created a distorted regulatory regime, in terms of the legal structure of the securities sector. Prior to the issuance of the securities law in 2004, the PSE was working through agreement with the ministry of finance, and the transactions were not regulated. The securities law has been formulated in such a way to serve the interests of the PSE, so that the Exchange has been given the power to enact the rules control the whole circulation process. The legislative role of the Capital Market Authority (CMA) is limited; by contrast, to ratification of those rules, not setting them, as it is standard in most countries. Actually, the CMA has approved the all rules enacted by the Exchange without reservation. Article (103) of the securities law provides that all existing public shareholding companies shall submit an application to list with the Securities Exchange. In spite of that, the majority of the public shareholding companies did not respond to this provision, and there was no penalty imposed, although the CMA was established in the third quarter of 2005.To achieve the research goals, the study combines more than one recognised academic approach. It relies on descriptive, analytical and inductive approaches. To ensure access to scientific conclusions, the study also adopts an objective, critical methodology. Additionally, it uses the comparative method in presenting and analyzing the content. As a result of that, the researcher try to determine the image and the particular legislative framework of the listing system in the PSE, in order to facilitate the process of developing legislation so as to ensure the proper functioning of investment in securities. The research aims also to develop the mentioned rules to be able to promote efficiency and productive investments; because the capital markets become critical to development in an open economy. It must encourage productive investments to enhance economic growth through using the domestic savings and attracting the foreign wealth. It believed that the outcome of the study will be a specialized material that helps researchers and decision makers, and guide them to the best legal solutions, and fills an important gap in the Palestinian and Arab Libraries.