Public-Private Partnership The Palestinian Experience

Introduction The Palestinian National Authority’s (PNA) Position on Public- Private Partnership (PPP): We, the Palestinian National Authority, believe that the Palestinian private sector is “the engine for economic development” which is reflected in the adoption of the public private partnership (PPP) as a major foundation for a strong economy and enabling business and investment environment. The Importance of PPP: In practice this means that the private sector has accepted its leading role in economic development and hence standards of living. Necessarily, efforts focused on creating and strengthening Partnership mechanisms between the two parties. Current Impediments and the Future of the PPP in Palestine The PNA is aware of the current impediments facing the relationship between public and private sector, but it is also strongly determined to reach the ultimate partnership goals such as reflection of the private sector’s development needs in the policy-making process, as well as the provision of inputs of the private sector in the reform of the legal and regulatory framework.

Historical background The role and participation of the Private Sector in the process of economic policy-making surfaced from the time of the establishment of the PNA through the emergence of the capacity, by the Government, to devise independent economic policies (monetary, industrial, financial, trade, tourism, agriculture... Etc.). Several attempts have passed through various stages in the past years. The National Trade Dialogue Program (NTDP): The Palestinian private and public sectors jointly initiated and adopted the first National Trade Dialogue Program (NTDP I) in 1999, and the second (NTDP II) in 2002.

Historical background The National Economic Dialogue Program (NEDP): In 2008, building on the awareness both the public and private sector gained in NTDP I & NEDP II, both of them gave tribute to the fact that the impediments facing the Private Sector can best be solved by positive voluntary cooperation between the Private and Public Sectors; both sides launched the NEDP in in fact, many of the impediments facing the private sector have been overcome through direct cooperation between both bodies. The Agenda presented by the private sector: The Private Sector prepared its agenda, needs and recommendations through the following Analytical studies concentrating on the following: The partnership between the Public and Private Sectors The Israeli obstacles and the requirements of the private sector under the current situation Organizing the importation process to benefit the Palestinian producer and consumer The problems and needs of the private sector in Gaza under the current situation The state of division and its impact on the banking and insurance sectors The legal framework for the Palestinian Economy Land registration and the legal framework organizing it.

Historical background Jericho Announcement 15/10/2008: Following the private sector’s Agenda, The Palestinian Prime Minister Dr. Salam Fayyad initiated the Jericho Announcement acknowledging the Private Sector’s requests and needs. This announcement manifested the following: Upgrading the regulations and procedures needed to promote the competitiveness of national economy in which the private sector’s investments could be increased. Drafting well-structured framework between public and private sectors that reflects the integrated and cooperative relation to be conducted regularly at various levels. Enhancing the public sector’s capacity to endorse the private sector's requirements in regards to the doing business related services. Enhancing the openness of the private sector’s relations on a regional and international levels. Empowering the institutions of the private sector to best advocate the needs and providing services to its members. Set up the needed legal and organizing framework to establish the Palestinian competitiveness council.

Existing Private Sector Institutions The private sector is represented by a number of specialized institutions which are governed by elected boards of directors chosen by general assemblies of the members. These institutions carry the responsibility of representing their members’ needs on the administrative, technical and advocacy levels. For this purpose, these institutions have formed a Private Sector Coordination Council (PSCC), which includes within its membership the major Private Sector institutions: Federation of Palestinian Chambers of Commerce, Industry and Agriculture (FPCCIA) Palestinian Federation of Industries (PFI). Palestine Trade Centre (PAL-TRADE). Palestinian Federation of Businessmen’s Associations (PALBA). Palestinian Information Technology Association of Companies (PITA). Palestinian Banking Association (PBA). Palestinian Contractors Union (PCU). Union of Insurance Companies (UIC). Administrative Services for Tourism Industry (ASTAP). Shipper’s Council (SC).

How PSCC Functions The PSCC is chaired by a rotating secretariat between the first four members every 6 months which are: Federation of Palestinian Chambers of Commerce, Industry and Agriculture (FPCCIA), Palestinian Federation of Industries (PFI) Palestine Trade Centre – PALTRADE, Palestinian Federation of Businessmen’s Associations (PALBA) A Council which includes all members of the PSCC and a number of representative of other special sectors, as well as representatives of large companies, was formed in order to achieve the highest levels of representation. PSCCASTAPUICPBAPALBAPFIFPCCIA PAL- TRADE PITAPCUSC The four main Rotating Members to chair the PSCC every 6 months

The Mechanism of the PPP In Palestine: The Jericho Announcement introduced the following organizational mechanism for the Palestinian Public Private Partnership. The Mechanism will regulate the partnership between the Ministerial Committee and the representatives of the Private Sector, their meetings and responsibilities on an executive level.

The Mechanism of the PPP In Palestine: The Executive Level a. On the Ministry Level: Each ministry assign one high ranking official to follow up and be responsible for all issues relevant to his/her ministry and to coordinate with the Secretariat of the Council of ministers. b. The executive level is formed from the ministerial officials and the Technical Unit of the PSCC. Responsibilities of the Executive Level a. Follow up on results of meetings and recommendations with the Council of Ministers’ Secretariat to ensure implementation. b. Review of the technical and administrative issue for implementation and finding resolutions c. Meets once a month to prepare for meetings in the future and follow up on past meetings d. The documentation of the PPP shall be kept at the Secretariat of the Council of Ministers and PSCC Secretariat

The Euro-Med Charter for Enterprise Best Practice on the Public Private Dialogue A best practice on the PPP was manifested in H.E. Dr. Salam Fayyad’s prolonged dialogue with all the Palestinian society spectra introducing his new Tax Reform Update in The Palestinian Cabinet and the Coordination Council of the Private Sector have reached an understanding, as part of the National Dialogue on the financial crisis, on income and corporation tax reform. The private sector has agreed to postpone tax breaks for investors for two years. This resulted in an important achieved deal as a compromise between the government and the private sector. Strong business associations

Example’s on PPP: All These institutions are governed by boards of directors which are partly formed from the private sector and from governmental institutions or ministries: 1. Palestinian Investment promotion Agency “PIPA”. 2. Palestinian Standards Institution “PSA”. 3. Palestinian Industrial Estate and Free Zone Authority “PIEFZA” 4. Palestine Monetary Authority. 5. Palestine Capital Market Authority.

Palestinian Investment Promotion Agency “PIPA” P.O. Box 1984, Ramallah, Palestine Tel: /2 Fax: Thank you