Posted on May 23, 1994 in Washington Watch

Palestinian police have entered Gaza and Jericho to the jubilant welcome of Palestinian residents. The transfer of authority having taken place, the first phase of Palestinian self rule is set to begin.

The Palestinian National Authority faces difficult responsibilities in the days and months ahead, and it must design and implement major projects to repair the damage incurred under 27 years of harsh and brutal occupation. World Bank and AID projects have been proposed for major infrastructural developments in housing, road building, electrification, sanitation, etc. A master plan must be shaped that will prioritize projects and set timetables for their implementation.

But while such three to five year plans are being developed, there is a need to address some short-term needs as well. One’s vision must not be so broad or so focused on the future that immediate needs are ignored.

Unemployment in Gaza is staggeringly high, the physical environment is a mess, and for thousands of young people the only organized activities have been demonstrating and throwing stones at the Israeli military.

Resolving needs such as these will not wait for major infrastructural projects to be developed. Immediate steps must be taken to bring the unemployment problem down to a manageable level, improve the quality of life, get people invested in nation-building, and organize and direct youthful energy. Without such steps, the region will not become stable enough to allow for a peaceful transition to self rule.

There is an oft-stated aversion to public sector job creation; and most development agencies cite the well-worn mantra of “sustainable development” as the criteria for project approval. While it is true that private sector development is the key to long-term economic growth, the environment must be hospitable for such activity.

So as the long-term projects are being developed and ground is being broken for infrastructure work, and while the foreign private sector capital seeks out long-term investment opportunities in the territories, let me propose some immediate and admittedly humble public sector and public-private sector cooperative projects that would contribute to solving short-term problems and creating a more stable and hospitable environment in Gaza and Jericho.

1) The Creation of a Gaza Environmental Corps

Both the problem of unemployment and the need to clean the surface environment of Gaza could be tackled by the creation of a Gaza Environmental Corps (GEC). This entity could function somewhat like the U.S. Civilian Conservation Corps (CCC) of the 1930’s – an emergency public works job creation program. The CCC was designed primarily to offset the massive unemployment left in the wake of the great depression, but also worked well to tackle the very serious environmental degradation in the American Midwest. But the rate of unemployment in Gaza is higher than in the U.S. at the peak of the depression, and the environmental problems are more serious.

By recruiting up to 2,000 young Palestinians, the GEC would absorb a significant number of the unemployed. It would provide them with uniforms and training to organize environmental cleanup, waste disposal, and other small clean-up projects throughout the Gaza Strip.

In addition to gainful employment (with the multiplier effect that would have on the local economy) and a cleaner, more hospitable area, this GEC would enable the residents of Gaza to restore a pride in their land and some immediate sense of improvement in their environment.

A program like the GEC must from the outset be defined as a short-term project to be replaced by whatever public works entity is created by the Palestinian National Authority. It can be assumed that within six months construction and other major infrastructure projects could be underway which will create more needed jobs.

2) Gaza-West Bank Soccer League

One of the major challenges facing the Palestinian leadership and Palestinian society in general is the absence of organized youth activities in Gaza and the West Bank. For many young people the activity of the intifada filled a void. And even now, for many, gathering in groups and throwing stones at Israeli settlers and soldiers remains their only outlet for youthful energy.

As the occupation slowly recedes, the need for organized youth activity will become even more apparent. One Palestinian academic noted, “Our children need to be given a chance to be children again. They need to go back to school and back to play.”

One of the best ways to provide that opportunity for the children of the West Bank and Gaza is to create a national West Bank-Gaza soccer league. Such an organized youth program would operate in every town and village and provide leagues and teams for different age groups. The teams would compete on their local level and in inter-community matches as well.

A proposal has been developed to provide fields, uniforms, shoes and balls for eight such community-based leagues, which would create an organized recreational program for up to 6,000 young people.

3) Creation of a Micro-Investment Fund

While major investment projects for the West Bank and Gaza have been designed by international agencies and foreign investors, the Palestinian economy as it now exists is comprised primarily of very small establishments. Of the 3,688 industrial enterprises in the West Bank and Gaza, 60% employ fewer than four workers, and only 7.5% employ more than 10 workers.

As small as they may be, these establishments are creative and dynamic and make a significant contribution to the economy of the territories. They have been able to adapt to a harsh occupation and not only succeed, but in many instances to diversify and grow. It is important, then, that as plans are developed to expand the Palestinian economy, the strength of these small-scale enterprises not be ignored. Failing to support these businesses would be detrimental not only to the economy of the West Bank and Gaza, but to the social fabric of Palestinian society as well. If Palestinians were to lose their small business sector, such a loss would negatively affect the individual entrepreneurs and initiative so important at any stage in development.

Not all of those small businesses can or will grow, but those that can require access to relatively small amounts of capital to purchase raw materials, take on additional employees, improve their product or gain access to new markets.

The local craft industry is a case in point. Long recognized as an important component of the Palestinian economy as well as in the social and cultural fabric of Palestinian society, the craft industry has fallen on hard times. In 1967 there were 3,000 individuals employed in the commercial sector of the craft industry making items from olive wood, mother of pearl, glass, etc. Today there are reportedly less than 300 so employed.

It is expected that with stability and peace there will be an increase in tourism. This, along with the new opportunities for Palestinians to export their products, will provide expanded markets for the craft industry.

To enable growth, to meet these new opportunities, and to meet the expected increased demand for their products, the small workshops that produce handicrafts need access to small amounts of capital to purchase the materials required to increase production and to bring workers back into the craft.

A micro-investment fund that would provide small, low-interest loans (or no-interest loans with payback based on the sale of the final product) would greatly enhance the prospects for this significant sector of the economy (and an important vehicle for the preservation of Palestinian history and culture) to expand and prosper.

Such a revolving micro-investment fund would play a critical role in assisting all export-related industries in Gaza and the West Bank, including the agricultural sector, where it has been estimated that a revolving fund of four million dollars could help support the export of over $25 million in agricultural exports annually.

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Projects such as these are not intended to replace the larger and more dramatic high-impact undertakings that are envisioned by the World Bank, the Palestinian National Authority and individual Palestinian entrepreneurs. But ground-breaking for those projects is still months away – and the needs in Gaza and the West Bank are immediate.

Implementing short-term, low-cost and small-scale projects will help address realities on the ground while those larger projects are being planned, making it possible to bring the fruits of peace more quickly to thousands of Palestinians in the newly autonomous areas of Gaza and Jericho. Such projects will have an immediate impact in improving the environment, helping to create the stable and hospitable situation needed for major investors to operate in the area with confidence.

Providing opportunities for the indigenous private sector to grow will also contribute to preserving the structure of Palestinian society and give the Palestinians of Gaza and Jericho a direct personal investment in ensuring the success of the nation-building now underway.

For comments or information, contact jzogby@aaiusa.org

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