Question

Please suggest a topic for a seminar that has a relationship with accounting and is interesting and has a relationship with the private or public sector in Palestine

---------------

Thank's
Abdul-Rahim Taysir

Answer 1

TOPIC:

"Strengthening the Palestinian business and investment climate"

This seminar would reflects the very specific conditions in the business environment, where the application of commonly used business climate development tools, advice and working methods need significant adjustments or fully different approaches. Indeed, the Palestinian economy is characterised by particular challenges such as a fragmented market due to restrictions on the movement of goods, capital and people; limited control over economic policy, trade and customs; volatility of public revenues; and heavy dependence on external budgetary support. This is compounded by political and geographical fragmentation and volatility. This situation leads to low levels of domestic and foreign investment confidence, distorted markets, low productivity, lack of employment and entrepreneurship opportunities and external aid turned towards humanitarian needs. At the same time, the Palestinian economy also benefits from active private sector associations, an energetic entrepreneurship ecosystem, a promising diaspora willing to invest if conditions strengthen, and nascent initiatives to improve the business climate, including a draft companies law and a registry of moveable assets underpinned by a secured transactions law. Adapted and consensual strategies, policies, tools and advice are needed to move the reform agenda in this fragile context.

The structure of the summary follows the two main themes of the workshop (i.e. the investment policy framework and entrepreneurship support) and other themes that emerged from the discussions. It takes the form of key recommendations and proposals for improvement.

Participants should mentioned the need to:

* Better link trade and investment in governmental strategies.

Investment in PA is strongly linked to access to markets. Enhancing the investment and trade nexus would entail exploring the potentialities of global and regional value chains for the Palestinian economy; identifying promising sectors (for example IT and digital business); and furthering quality and certification to enhance exports potential.

* Monitor investment incentives.

Incentives are offered to investors in the general regime under the investment law, but also through economic zones and sectoral legislation. Results may not be the expected ones in terms of fiscal efficiency and incentives may not always target the businesses that most need it. Discretionary administration in allocation of incentives was identified as a potential issue. This situation calls for a better analysis of the cost and benefits of incentives and for a transparent administration, in view of a more targeted approach, e.g. towards smaller businesses, young and female entrepreneurs, and a thorough monitoring.

* Assess the impact of economic zones as a tool for investment promotion and business developments.

Numerous zones have been created and provide for one-stop shops and business development services. Sectoral clusters also emerged. A thorough assessment of their impact, mirroring the local business conditions, could be conducted to enhance usefulness and impact, but also unify a possible scattered approach to EZs and related donors support.

* Enhance risk mitigation tools and diaspora investments.

Businesses and investment policies should be adapted to the fragile and locked context. Risk insurance mechanisms could be further developed and expanded with diversification of providers. Innovative solutions to, and partnerships for, risk management could also be explored. The large Palestinian diaspora (same number of Palestinian people, i.e. approximatively 6 million, leave inside and outside the Palestinian territories) should be encouraged to conduct productive investment – not only in real estate – and use innovative partnerships involving foreign private investments and the public authorities.

* Improve conditions for access to finance.

Would-be entrepreneurs and established firms continue to face major obstacles for obtaining loans to create and/or growth their business, in particular due to lack of collateral, e.g. land ownership is not sufficiently guaranteed. Best practice on lending and leasing of land from other countries should be considered (for instance, the leasing system in Lebanon was mentioned).

* Strengthen the public-private dialogue and business integrity.

The resilience force of the private sector should be backed with stronger trust in the public sector, enhanced transparency and government efficiency. Enhanced use of public-private dialogues would be relevant to move the business reform agenda. In addition, promoting business integrity and corporate social responsibility (or responsible business conduct as per the OECD Guidelines for Multinational Enterprises) should be on the policy agenda as a means to promote sustainable business.