1. © Jerusalem Policy Forum 2007 1 Towards Economic Development in East Jerusalem Now A Strategic Approach by the Jerusalem Policy Forum

2. Map Model Elements Request 2 Increasing Poverty Middle Class Flight Income Inequality Isolation from natural market Marginalized by Palestinians And Israelis Deterioration of institutions; Increasingly asymmetric capacities Limited Tax Base; structural budget deficit Context – Where we are going? Raed

3. Map Model Elements Request 3 …Where we want to go…  Improved and sustained economic activity that is beneficial to both Palestinians and Israelis  Stable Employment – Jobs and Income  Economic Growth and Opportunity  Change the priorities for governance… FROM Politics and Security TO Economics and Investment Raed

4. Map Model Elements Request 4 Taking the Right Approach…  Economic Activity  Strengthen economic interdependence  “Rebrand” Jerusalem as an internationally- recognized economic area  Sustainability  Build on competitive competencies  Institute a fair and equitable tax structure and services  Preserve and protect of private property Raed

5. Map Model Elements Request 5 …Will Require the Capacity to Act Strategically… PoliciesProgramsProjects Fairness Sustained Efforts Opportunity Employers Jobs Incomes Capacity Capacity to Plan and Act on a Sustained Basis Quality of Life Steve

6. Map Model Elements Request 6 Key Recommendation: Build Capacity, Set Direction, and Ensure Accountability… Symptoms  Many organizations  Mix of agendas, geography, & leadership  Competing for scarce resources Symptoms  Many organizations  Mix of agendas, geography, & leadership  Competing for scarce resources Causes  No professional economic development staff  No focused economic development strategy  Limited public consensus about development Causes  No professional economic development staff  No focused economic development strategy  Limited public consensus about development Initiatives  Jerusalem Economic Forum  Economic development strategy  Secure International 3 rd Party to Monitor Implementation Initiatives  Jerusalem Economic Forum  Economic development strategy  Secure International 3 rd Party to Monitor Implementation Organization & Strategy R

7. Map Model Elements Request 7 Detail: Jerusalem Economic Forum Mission  guide strategy development  Manage project development and implementation  monitor strategy implementation Composition  Reps from leading sectors (e.g. tourism, health, education, retail, etc.)  Palestinian/East Jerusalemites Management & Organization  Professional staff  Leverage partnerships with “existing” organizations (e.g. Chamber of Commerce, JPF, etc.) Tasks and Activities  Evaluate the market situation & identify short and long term market opportunities  Develop consensus on economic development policies and programs;  Identify priority projects in the economic development strategy  Manage the preparation and implementation of the economic development strategy  Work with public and private developers in formulating, planning, and implementing economic development projects  Track economic development projects and monitor economic development progress. Steve

8. Map Model Elements Request 8 Detail: 3 rd Party Monitoring Mission  To ensure implementation of the economic strategy, including policies, programs, and projects Composition  Reps from international bodies with a supporting in the economic strategy Tasks and Activities  Establish benchmarks for performance  Collect data about outcomes  Report on monitoring efforts Steve

9. Map Model Elements Request 9 Examples of Policy Initiatives Symptoms  Uncompetitive tax situation  Limited public services available to business and communities Symptoms  Uncompetitive tax situation  Limited public services available to business and communities Causes  High tax burden on real estate  Unfair tax burden on certain industries compared to competitive locations Causes  High tax burden on real estate  Unfair tax burden on certain industries compared to competitive locations Initiatives  Evaluate the equity and application of business, property, and personal income taxes  Recommend policies for tax equalization to ensure competitive industry Initiatives  Evaluate the equity and application of business, property, and personal income taxes  Recommend policies for tax equalization to ensure competitive industry Taxes Raed

10. Map Model Elements Request 10 Examples of Policy Initiatives Symptoms  Limited building development activity  Limited investment activity Symptoms  Limited building development activity  Limited investment activity Causes  Building permit unapproved for development in East Jerusalem  Incentives unavailable and/or unsuited for E. Jerusalem Causes  Building permit unapproved for development in East Jerusalem  Incentives unavailable and/or unsuited for E. Jerusalem Initiatives  Enforce development laws  Permitting  Incentives Initiatives  Enforce development laws  Permitting  Incentives “Favorable” Enforcement Raed

11. Map Model Elements Request 11 Examples of Program Initiatives Symptoms  International business not locating in Jerusalem  Declining key sectors, such as Tourism Symptoms  International business not locating in Jerusalem  Declining key sectors, such as Tourism Causes  Uncompetitive trade policies with international markets  Stigmatized location by international organizations Causes  Uncompetitive trade policies with international markets  Stigmatized location by international organizations Initiatives  Target recruitment  Capital Improvement Program to Enhance “Jerusalem Brand”  Regional co-marketing initiative for Tourism industry Initiatives  Target recruitment  Capital Improvement Program to Enhance “Jerusalem Brand”  Regional co-marketing initiative for Tourism industry Business Development Raed

12. Map Model Elements Request 12 Examples of Project Initiatives Symptoms  Declining key sectors, such as Tourism Symptoms Causes  Lack of capital investment in Hotel room supply  Reduced tourist activity  Available incentive programs not geared to East Jerusalem Hotels and owners Causes  Lack of capital investment in Hotel room supply  Reduced tourist activity  Available incentive programs not geared to East Jerusalem Hotels and owners Initiatives  Rehabilitate hotel room to enhance regional marketing and tourism activity Initiatives Key Industry Development Raed

13. Map Model Elements Request 13 Example: Rehabilitate Hotel Rooms Proposal  Capital investment in underutilized hotel room supply in E. J. Rationale  Shorten time to market  reduce capital cost Partners  Hotel owners and operators in E Jerusalem Cost  $30M  long term secured financing Outcomes  1000 rooms  increased tourist penetration into E. Jerusalem  increased overall capacity in Jerusalem Raed

14. Map Model Elements Request 14 What We Need…Now  Consensus and international support for the approach  Support the costs of establishing and operating the Jerusalem Economic Development Forum for 3 years  Support the costs of identifying, recruiting, and hiring a professional economic development staff  Intent to support and leverage others to support priority economic development programs and projects. Raed

15. Map Model Elements Request 15 End

16. Map Model Elements Request 16 Examples of Project Initiatives Symptoms  No air access to East Jerusalem region  Air Access needed for Tourism sector and international business  No free access; all access controlled by Israel Symptoms  No air access to East Jerusalem region  Air Access needed for Tourism sector and international business  No free access; all access controlled by Israel Causes  Difficulty securing air corridor around Jerusalem  May compete with B-G for international travel Causes  Difficulty securing air corridor around Jerusalem  May compete with B-G for international travel Initiatives  Evaluate the financial and security issues for opening the Qalandia Airport; prepare and implement a plan for the airport Initiatives Access Steve

17. Map Model Elements Request 17 Examples of Project Initiatives Symptoms  Deteriorating business districts  Limited services available to local residents  Low quality public spaces Symptoms  Deteriorating business districts  Limited services available to local residents  Low quality public spaces Causes  Limited funding for public spaces  No coordinated plans for neighborhoods  Underperforming businesses in neighborhood business districts Causes  Limited funding for public spaces  No coordinated plans for neighborhoods  Underperforming businesses in neighborhood business districts Initiatives  Identify plans for the redevelopment of neighborhood business district throughout East Jerusalem, including public improvements, business development, and financing options Initiatives Business Districts Raed

18. Map Model Elements Request 18 Examples of Project Initiatives Symptoms  Little or no investment by International business community  Few relocations and/or expansions Symptoms  Little or no investment by International business community  Few relocations and/or expansions Causes  Jerusalem is stigmatized as “disputed” territory; unclear what jurisdiction and benefits may apply  Few high quality sites and buildings “ready to go” Causes  Jerusalem is stigmatized as “disputed” territory; unclear what jurisdiction and benefits may apply  Few high quality sites and buildings “ready to go” Initiatives  Model for an International District in Jerusalem  “Ready” sites and buildings to house business interested in East Jerusalem locations Initiatives  Model for an International District in Jerusalem  “Ready” sites and buildings to house business interested in East Jerusalem locations International District Raed

19. Map Model Elements Request 19 Detail: International District Proposal  Create globally-competitive international business zones in the Jerusalem region Rationale  International business require “conflict free” development areas  Create stable areas where Israelis, Palestinians, and International business can work together Partners  Jerusalem Development Authority  Palestine Investment Fund Outcomes  Benchmarks for district performance  Model of legal, financial, infrastructure, development, and governance issues  Alternative implementation strategies Steve

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