2015/2016 Developing relations with the European Bank for Reconstruction and Development (EBRD)
NIR was given a mandate from the Palestinian Steering Committee (supported by the Israeli Steering Committee, which was important as Israel is a founding member of EBRD) to facilitate contacts with EBRD. A Palestinian private sector delegation travelled to London and had meetings at EBRD. This resulted in the Ministry of National Economy engaging with the issue and applied for membership, which in turn has led to a process which now is moving towards an EBRD office in Palestine and establishing a special mechanism for Palestine. EBRD visited Palestine twice, and PIBF facilitated meetings with the Palestinian private sector. The potential benefits are large if Palestine gains access to the credit facilities of EBRD.
PIBF in 2016 commissioned and presented an update of the 2007 report on economic development. The study was done in cooperation with the Office of the Quartet. The study updated its recommendations to the current political and economic context – particularly the stalemate of the peace process as well as by adding new aspects that take into consideration the absence of negotiations and using this report as an advocacy tool to stimulate the negotiations.
Palestinian/Israeli economic relations are at a cross road. Economic growth in the West Bank has been declining steadily since 2008, after the large injection
of foreign aid, which became the main engine of growth in the economy. With the decline in aid and no alternative source of growth, we are now in declining per capita income territory with rising unemployment and poverty. The status quo is unsustainable. The report demonstrates that both economic viability and fiscal sustainability have been lost. A paradigm shift is necessary. Investors need positive perceptions, clarity and predictability. They need a ten year horizon of lifting economic restrictions, rolling back the occupation, and culminating with a sovereign Palestinian State. However, there are different ways of getting to the end point. What makes this study different from other reports is that it explores sets of constructive measures during a transition period, while still under occupation.
In December 2007, PIBF released a research paper on “Future Economic Relations between the Palestinian and Israeli Economies: A Private Sector Perspective. Impact of the Possible Trade Scenarios” with a proposal for a free trade area between Israel and Palestine as a joint recommendation. The research paper was developed by joint team composed by twenty Palestinian, Israeli and European experts. Together with about thirty Israeli and Palestinian business people via PIBF, and with the participation of another 150 – mainly from the selected sectors of tourism, agriculture, construction materials and fast moving consumer goods – it analysed the full potential of trade relationships between Israel and Palestine, and assessed their impact on both economies. PIBF organised a full-day event to present and discuss the findings of the study. The study showed that the two economies would gain up to $25 billion in combined exports and income, as well as more than one million new jobs between them under the condition of an FTA Plus arrangement. Furthermore, and adding to this value, developed economic cooperation between the Palestinian and Israeli economies based on equal conditions could bring about a more peaceful environment, which ultimately will enhance business climate and cooperation in the region. The report was circulated to over 1,000 key actors, stakeholders and institutions in the region, the EU, UN institutions as well as governments and NGOs internationally. It came to be referred to at several significant occasions in Israel, Palestine and the EU, and was, amongst others, used in the negotiations between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas in 2008. The study was an approved reference document in the agreements reached on the economic issues in the 2007-2008 negotiations.