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Source: World Bank
31 March 2000

Vocational Education and Training Reform:
Matching Skills to Markets and Budgets

A Joint Study of
The World Bank
The International Labour Office
Edited by:
Indermit S. Gill
Fred Fluitman
Amit Dar
Published for the World Bank by
Oxford University Press

Part III: Low-Growth Economies

17. West Bank and Gaza Strip
Fred Fluitman

THE WEST BANK, including East Jerusalem, and the Gaza Strip are Palestinian territories that have been occupied by Israel since the Israeli-Arab War of 1967. Following the Middle East peace process in 1993, limited self-rule by a Palestinian Authority in West Bank and Gaza was agreed upon. The Palestinian Authority has, in accordance with what was agreed, assumed responsibility in the autonomous areas of the West Bank and the Gaza Strip, for labor and social welfare, health, education (including training) and culture, tourism, agriculture, energy, statistics, and taxation. Things are far from settled, however, and the future is extremely uncertain. Important spheres of jurisdiction have so far remained under Israeli control, notably external security, foreign affairs, and exports and imports. Opponents of the peace process have repeatedly succeeded in frustrating it by resorting to violence. As a result, punitive measures have been taken, which, in turn, have worsened the situation on the ground.

The economy of the occupied territories is essentially underdeveloped and fragile, vulnerable to unpredictable external shocks and subject to massive constraints. Agriculture (mostly small-scale, low-tech, and family-based) contributed between 25 and 35 percent of gross domestic product (GDP) in 1995, and it remains the major productive sector. However, agricultural development is hampered by problems of access to land, water, and markets. Manufacturing (around 8 percent of GDP) has remained based in small-scale enterprises: 90 percent of enterprises have fewer than 10 workers and 72 percent have fewer than 5 workers. The domestic construction sector (13 to 17 percent of GDP in 1995) depends largely on savings from income earned in Israel-most of it by construction workers. However, there has been a "building boom" in parts of the territories since the beginning of the peace process.

More than 85 percent of the territories' foreign trade is with Israel. A structural deficit on the balance of goods and a surplus on account of services, mostly wages earned in Israel, illustrate the dependence of the territories on the Israeli economy. Following a major drop in merchandise imports from Israel in 1988, at the start of the intifada, the value of such imports increased rapidly to reach US$1,340 million in 1995, according to the Bank of Israel. Exports of goods to Israel, in contrast, never recovered from their collapse in 1988-89; they were worth only US$205 million in 1995. Since Palestinians of the territories are increasingly prevented from working "across the green line," the ever-growing deficit on account of goods is no longer largely made up for by wages earned in Israel. Annual wage receipts by Palestinian workers in Israel plummeted from a record US$930 million in 1992 to US$252 million in 1995.

Data provided by the Israeli Bureau of Statistics suggest that economic growth in the territories has been low since 1987. Per capita gross national product reached almost US$2,500 in the West Bank (21 percent from work in Israel) and US$1,600 in Gaza (29 percent from work in Israel) in 1992. However, average incomes have collapsed since then. By 1995 the territories' gross national product had decreased by close to 10 percent per capita as a result of a 52 percent reduction in workers' remittances. Growth has not picked up substantially since. The Labor Market

There are no reliable census data about the population of the occupied territories. According to estimates made by the Palestinian Central Bureau of Statistics, the territories had a Palestinian population of almost 2.5 million by the end of 1995, 53 percent of them 15 years of age or older. By 1992 there were, in addition to those in the territories, around 1 million Palestinian refugees in Jordan and around 300,000 each in Syria and Lebanon. In total, an estimated 3.5 million Palestinians lived outside the West Bank and Gaza in 1995. The first labor force survey undertaken by the Palestinian Central Bureau of Statistics suggests a 1995 labor force participation rate of 39 percent for the territories as a whole (PCBS 1996). With an estimated 1.3 million Palestinians 15 years of age and older, the size of the labor force was around half a million. Labor force participation was found to be higher in the West Bank than in the Gaza Strip and significantly lower for women, particularly so in Gaza (table 17-1). Participation rates were particularly low (14 percent) for those without education and relatively high (63 percent) for those who had completed more than 12 years in school.

With a labor force growing at an annual rate of between 3 and 4 percent, 20,000 new job seekers (net) enter the market every year. If the government were to decide to do something for the tens of thousands of unemployed persons, it would have to identify, if not create, 30,000 or perhaps 40,000 new jobs year after year for years to come - a daunting challenge. Employment in the Occupied Territories and Israel Less than half of the labor force are wage employees; the others are mostly self-employed in agriculture or in small shops. There are also sizable numbers of unpaid family workers and unemployed people. Many of the people who work for wages depend on jobs in Israel. While job growth within the territories has been remarkable in recent years, it could not entirely make up for a massive decline in employment of Palestinians in Israel. The growth of employment within the territories after 1992 has certainly been significant, but it is unlikely to continue at current rates. Most of the new jobs were associated with the establishment of a Palestinian public service and with a building boom. In view of budget constraints facing the Palestinian Authority, doubts are justified about any further increase in the number of public servants, estimated in 1994 at around 65,000. Moreover, the construction sector is not expected to contribute to further large-scale job growth. New and lasting jobs created as a result of massive external investments (for example, in the much talked about industrial parks) have yet to materialize and may not unless a fundamental climate change occurs. Employment growth within the territories is most severely compromised by repeated and prolonged closures and other punitive measures restricting or preventing, at great expense, the movement of people and produce across and inside the green line. Imports of essential inputs, including flour and fuel, are frequently halted, and exports are prevented from leaving. As production falters, so does consumption, and incomes and jobs evaporate.

For more than 25 years, tens of thousands of Palestinians (at times more than 40 percent of the labor force, mainly construction workers and farm hands) have been working in Israel because there were no jobs for them within the occupied territories. In 1992, on normal days, almost 120,000 registered workers and - in spite of strict controls - an estimated 30,000 to 40,000 unregistered workers crossed the green line to earn a living. These days are over, or so it appears. For a long time there had been periods during which the borders were closed for all or some, usually but not always in the wake of terrorist activities. But closure became the rule rather than the exception in March 1993. Since that time the maximum numbers allowed back in have decreased. Consider the case in Gaza. Although an average of 43,000 daily workers came to work in Israel in 1992, this number had declined to below 12,000 by 1996. In order to make up for the many Palestinian workers prevented from coming to their jobs, Israeli employers have been steadily replacing them with foreigners. By the end of 1995, more than 70,000 foreign contract workers were legally employed in Israel, most of them construction workers from Rumania, Thailand, Turkey, and China. Unemployment in the Occupied Territories Unemployment and underemployment have become serious problems. In 1993-94 unemployment varied between 17 and 33 percent in Gaza and between 11 and 30 percent in the West Bank, depending on whether workers had access to jobs in Israel (ILO 1995, p. 15). According to a September-October 1995 survey by the Palestinian Central Bureau of Statistics, 18 percent of the labor force of the occupied territories was unemployed that is, 14 percent in the West Bank and 29 percent in the Gaza Strip (PCBS 1996). Results of the second round of the Labor Force Survey (April/May 1996) suggest a dramatic surge in unemployment to 29 percent (24 percent in the West Bank and a record 39 percent in the Gaza Strip). These estimates imply that unemployment is now likely to affect more than 140,000 Palestinian workers and their families. The Education and Training System In the West Bank compulsory basic schooling lasts ten years; after that students can opt for two years of secondary education, either general (with a scientific track and a literary track) or vocational. In Gaza compulsory education consists of six years of elementary schooling plus three years of preparatory schooling; secondary schools (general only) last three years. Since the Palestinian Authority assumed control of the education sector in 1994, steps have been taken to unify the system. The first secondary school examination (Tawjihi) under Palestinian supervision took place at the end of the 1994-95 school year. Well over half a million Palestinian children, 48 percent of them girls, received basic education in the territories in 1994-95 (table 17-2). There were 45,359 pupils (45 percent female) in secondary schools, including a small proportion in vocational secondary schools. Almost all of secondary education is provided by the authority.

Enrollments in vocational education are small compared with general education enrollments. The Palestinian Ministry of Education and Higher Education reports that there were 18 vocational schools in the West Bank and Gaza in 1995. These included vocational (or industrial) secondary schools following the Jordanian curriculum, all of them in the West Bank, as well as certain commercial, agricultural, and nursing schools. Ten of these schools were said to be governmental; the others included schools run by the Arab Development Society, the Salesian Brothers, and the Lutheran Church. According to the Education Statistics Yearbook (PCBS 1995), fewer than 1,300 students, mostly men, were enrolled in vocational secondary schools in 1995 (table 17-3); only 77 of these students went to such schools in Gaza. Upon completing the two-year program, about half of which is devoted to practical work, graduates may seek employment or pursue their education at the tertiary level in one of 17 community colleges that offer two-year technician-level courses. Graduates of general secondary schools may also enter these colleges.
Four of these community (or technical) colleges were administered by the Ministry of Education, 3 of them were with the United Nations Refugee Welfare Association, and 10 were private institutions. Together they enrolled 4,110 students, more than half women, and two out of three in the 19-to-21-year-old age bracket. Graduates of community colleges could, in principle, continue their education at a university.

In 1995 there were eight universities in the occupied territories: six in the West Bank (including an open university) and two in Gaza. Between 1992 and 1995, enrollments almost doubled to reach about 30,000 students; almost 45 percent of these students were women. A large share of the university students (27 percent) had opted to study education; other apparently attractive specializations were arts and letters (17 percent), science and technology (16 percent), economics and business (16 percent), and religious studies (12 percent).

In 1994, 21 vocational training centers (with an enrollment of 4,000) trained school leavers to become semiskilled or skilled workers. Since 1995 the Palestinian Ministry of Labor has been responsible for 13 of these centers (namely, the ones set up and previously administered by Israeli authorities, primarily to prepare Palestinian workers for jobs available in Israel). These centers continue to offer short-term courses (5 to 12 months) in 24 occupations; around 75 percent of the time is devoted to practical work and 25 percent to theoretical training. Trainees must be at least 16 years of age and, depending on the course, have completed 6 to 10 years of basic education. In fact, many of the trainees are school dropouts. Fewer than 3,000 students were enrolled in the centers under the Ministry of Labor in 1994 (table 17-4).

Most of the women were enrolled in sewing classes; the remainder were in hairdressing or secretarial courses. Most of the men took courses related to either motor vehicle repair or the construction sector. The Ministry of Labor has taken steps to develop an "efficient, effective, and relevant national vocational training system" (Ministry of Labor 1996), including a review of these institutions. Its evaluation report alludes to a range of weaknesses with regard to coverage, curriculum, training methods, the qualificationsof trainers, the state of facilities and equipment, and links with the world of work. The report points out that 63 percent of operating expenses in running these training centers was spent on salaries and 19 percent on trainee stipends. Thus less than 20 percent of operating expenses got spent on teaching and learning materials. Costs per course varied between US$500 and US$1,300 per student per year. Extra-budgetary resources, notably funds granted by external donor agencies, paid for special projects, including the "expert team on vocational training" that assists the directorate in formulating policy, in developing curricula, and in training staff.

In addition to the Ministry of Labor, the United Nations Refugee Welfare Association is providing vocational training in two large centers-one in Kalandia, just North of Jerusalem, and one in Gaza. In the mid-1990s the combined enrollment in both schools was about 1,100 students. The United Nations Refugee Welfare Association courses last two years; Students begin them after completion of basic education. Additional vocational training is provided in six private centers with an estimated enrollment of around 500 trainees. Private centers are operated by the Al Bir Society, the Young Men's Christian Association, and the Near East Council of Churches; most of their courses last three years. Details concerning their operations and costs are unknown by the Ministry of Labor.

A fairly extensive informal network of nongovernmental organizations in the occupied territories offers additional opportunities for adults to acquire or improve certain skills. Such nonformal education and training was provided in 1994 to 13,898 students enrolled in 426 courses offered in 108 "cultural centers" (PCBS 1995). Two-thirds of the students were 19 years of age or older; almost half of the students were women. One-third of all courses were computer courses. Little information is known about the costs of training in these institutions.

The Palestinian training system is small. Presumably, most workers who need specific skills acquire them on the job - that is, by copying others or by trial and error - rather than as a result of structured learning. However, there is little data concerning organized training or skill upgrading by Palestinian employers for their employees. It may be assumed that private sector establishments in the territories do not provide much training either, given the nature and size distribution of enterprises and the fact, well-established elsewhere, that small enterprises do not usually train their workers.

Reform of Vocational Education and Training

Soon after being established in the mid- 1990s, the Ministry of Labor took an active interest in vocational training. The ministry explicitly recognized the weaknesses of the system it had inherited and "the importance of supporting and developing the system of vocational preparation . . . in particular the importance of defining clear objectives and establishing the necessary bodies." It stressed the urgent need for a "common vision of the priorities for developing the vocational training system" (Ministry of Labor 1996). It proposed (a) enhancing coordination among vocational education and training providers, (b) involving industry in the design of training policies, in the assessment of training needs, and in the provision of training, and (c) creating what is referred to as a "catalyst." This would be a body equipped to ensure the continuous adjustment and development of the training system by being aware of the labor market and of new training methods, and by training trainers and training managers.

To achieve its overall objective of developing an "efficient, effective, relevant, and sustainable" training system, the ministry decided to attach an expert team to its General Directorate for Vocational Training. It also set up the Advisory Council on Vocational Training, which has representatives of the ministries of Labor and Education and of the United Nations Refugee Welfare Association. There are additional seats for other ministries, for representatives of private training providers, for representatives of employers' and workers' organizations, and for the head of the expert team. The council advises the Ministry of Labor on training policies and on legislation or other forms of regulation. It coordinates all those involved in vocational training, and it directs and reviews the work of the expert team.

The technical arm of the Advisory Council, the expert team is a semiautonomous body based in the Ministry of Labor and financially supported by an external donor. Its objectives are to foster a flexible, demand-driven, and sustainable Palestinian training system, to become a platform for a continuous exchange of information and experience, and to develop the human and material resources for the new training system. The team is involved in data collection and policy analysis, curriculum development, and the training of trainers and training system managers.

In its efforts to develop a training policy framework, the team addressed numerous issues, such as the Palestinian economy and labor market, alternative modes of skill development, the division of training responsibilities, and the financing of training. A Palestinian training system, according to the team's recommendations, should

• Handle (in several years) up to 30 percent of the relevant age group
• Focus on the training needs of the local market
• Be as flexible as possible and modular in form
• Serve adults as well as youngsters
• Provide basic training as well as skills upgrading and retraining opportunities
• Lead to an occupational certificate and regained access to the general education system
• Ask those who can afford to pay for their training to do so.

At this stage the government should provide training in all fields, but particularly in strategic areas, and its role should move gradually toward policy formulation, curriculum development, training of trainers, and the setting of standards and certification. With regard to vocational training and vocational education, there is simply no one right system. It would be wrong to phase out completely any of the existing systems at this time. Establishing multipurpose training schools or centers might be an excellent way of experimenting with methods to find a harmonious combination (Ministry of Labor 1996).

The Ministry of Labor and its expert team have begun to implement a comprehensive plan of action to ensure the transition to a new Palestinian training system. The plan presents a series of distinct but related donor-funded projects covering the expansion of the system, administration, staff development, curriculum development, financial planning, the upgrading of certain facilities, and the improvement of links with industry.

Constraints to Reform

Reforming training policy in the West Bank and Gaza Strip, because of their unique circumstances, is particularly difficult. Having decided that such constraints are no excuse for inaction, Palestinian authorities have embarked upon reforms that promise to be gradual but substantive and innovative. Success is likely to depend on the ability to obtain adequate information and to reach goals that are clearly stated and shared.

In 1995 no more than 5 percent of the relevant age group had ever been enrolled in formal VET programs. As stated above, the Ministry of Labor is striving for 30 percent. Whether the system will be able to attract significantly more students is another matter, especially given its current internal and external efficiency. Concerns about dilapidated facilities, outdated curricula, obsolete or unavailable equipment, and unqualified trainers are widespread. The Young Men's Christian Association conducted a tracer study of about 25 percent of the 1992 graduates of all West Bank VET institutions. This study suggested that half of them found work in their field of study, 7 percent in related fields, 22 percent in unrelated occupations; 20 percent were unemployed. In Palestinian society more young people are enrolled in Palestinian universities than in VET programs. There is a clear preference for an academic education. Finally, and probably most importantly, the issue of financing a significant increase in VET enrollments has to be carefully studied. This will prove to be a daunting task particularly because of the lack of information on unit costs of training.

However small, the Palestinian training system is a "patchwork of formats and sponsors" (de Moura Castro 1994). Although the Advisory Council is intended to coordinate vocational education and training activities, numerous actors, including foreign donors, have entered the scene, each with its own view of what is to be done and how. There may be certain benefits in diversity, but it will be important for the Advisory Council to manage these often conflicting priorities.

A final issue to be considered concerns training providers' resistance to change in the occupied territories. Most of these providers have been doing an admirable job for years in difficult circumstances; now that the circumstances are supposed to get better, they should not be expected to unquestioningly abide by the directives of a new and largely inexperienced training authority. In other words, the willingness of certain key actors to play their part may be compromised either by their particular terms of reference or by their divergent views on the nature of change.


de Moura Castro, Claudio. 1994. "Training in Palestine." In Mazen Hashweh, ed., Training in Transition: Review of Issues and Options in Vocational Education and Training in Occupied Palestinian Territories. Jerusalem.
ILO (International Labour Office). 1995. "Report of the Director General, Appendix. "International Labour Conference, 82d Session, Geneva.
Ministry of Labor. 1995. Towards an Efficient, Effective, and Relevant National Vocational Training System in Palestine. Jerusalem: Society for Austro-Arab Relations.
----------. 1996. Meeting the Challenge-Vocational Training: Current Status and Future Perspective. Jerusalem: Swiss Agency for Development and Cooperation.
PCBS (Palestinian Central Bureau of Statistics). 1995. Education Statistics Yearbook, 1994-95, No. 1. Ramallah: Ministry of Education and Higher Education.
----------. 1996. "Labor Force Survey: Main Findings (September-October 1995 Round)." Ramallah.

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