1. Development context: The economy of the occupied Palestinian territory continued to perform well below potential in 2009. There were signs of improvement in GDP growth and other indicators, but these need to be interpreted cautiously in view of the wider context. Territorial fragmentation, inequalities and welfare divergence continued to grow, aid dependence deepened, and access to natural and economic resources shrank. Private investment continued to be hampered by mobility restrictions as well as by the risk of new restrictions being introduced at any moment. While direct damage incurred by the 2008–2009 Israeli military occupation in Gaza is estimated at one third of the economy’s output in 2006, before Gaza’s blockade, the indirect cost of the war has been greater. The economic and humanitarian situation in Gaza has continued to worsen. Despite funds being allocated for economic rehabilitation and reconstruction, the blockade and closures imposed on the occupied Palestinian territory have ensured that these funds have not had a sufficiently tangible economic impact.
2. Objectives/features: UNCTAD, in close coordination with international development agencies, is assisting the Palestinian Authority not only to address the immediate needs but also to support building the economic institutions. The programme involves quantitative and qualitative research work in search of innovative solutions to the unique problems facing the Palestinian economy. UNCTAD’s programme of technical assistance to the Palestinian people draws on the results of the secretariat’s research and policy analysis and on the international experience of the secretariat as a whole. The programme aims at addressing the economy’s emerging needs under four clusters: (a) development strategies and trade policy; (b) trade facilitation and logistics; (c) public finance modernization and reform; and (d) enterprise, investment and competition policy. UNCTAD’s work is guided by the United Nations Strategic Framework for 2010–2011; paragraph 44 of the Accra Accord; paragraph 35 of São Paulo Consensus; paragraph 167 of the Bangkok Plan of Action; and General Assembly resolutions 56/111 (paras. 6 and 7) and 43/178 (para. 9).
3. Output: UNCTAD technical assistance activities in the area of trade facilitation registered a number of tangible achievements under the ASYCUDA customs modernization project. The ASYCUDA World system has been introduced to – and is now being used in – all customs offices in the West Bank. This places the Palestinian Authority among the first 10 customs authorities in the world to adopt this system. Key achievements also include an expanded and well-trained team of Palestinian customs experts; establishing a community of customs experts in the private sector; and designing and delivering tailor-made training manuals for present and future use by Palestinian Customs. The secretariat has also been supporting the Palestinian Shippers’ Council (http://www.psc.ps) through advisory services to assist the Council in launching new products to address the emerging needs of its members and the Palestinian community of importers and exporters at large. Furthermore, in cooperation with UN-ESCWA, UNCTAD is finalizing a survey-based policy paper for guiding Palestinian capacity-development efforts.
4. The secretariat has also achieved progress in the area of development strategies and trade policy within the context of a project to promote subregional growth-oriented economic and trade policies towards achieving the Millennium Development Goals (MDGs) in selected Arab countries. In 2009, project activities brought together a group of policymakers, experts, and representatives of civil society institutions from the occupied Palestinian territory and four Arab countries to discuss, assess and recommend measures related to the impact of macroeconomic and trade policies policy on achieving MDG 1 (poverty reduction) and MDG 8 (regional integration).
5. However, programme sustainability in the volatile field conditions is also undermined by the lack of predictable extrabudgetary resources. To date, and despite the secretariat’s appeals to the donor community, several projects remain unfunded. This shortfall has obliged the secretariat to put on hold planned project activities in the area of investment and enterprise development. This includes activities under the EMPRETEC Palestine programme, especially Phase II which involves extending the programme to Gaza, as well as activities involving building the Palestinian Investment Promotion Agency’s capacity to launch an aftercare programme for existing investors.
6. Results: The relevance and responsiveness of UNCTAD’s work is reflected in the endorsement of its annual report on assistance to the Palestinian people, presented to the fifty-sixth session of the Trade and Development Board, by almost all members. UNCTAD’s analysis of the economic crisis in the occupied Palestinian territory was also appreciated by the United Nations heads of agencies in the field, who incorporated the secretariat’s assessments in their work. Furthermore, UNCTAD studies and reports on the war-torn Palestinian economy were cited in specialized and academic publications, and received wide coverage from all types of global media (agencies, press, radio and internet). The secretariat has also received and responded to several enquires by donors (particularly the EC) regarding specific technical interventions in the occupied Palestinian territory. As a result of UNCTAD technical assistance activities, the Palestinian Authority is empowered to exercise the full range of customs functions from day one following its assumption of control over external borders; the Palestinian shippers are benefiting from tailor-made services; the occupied Palestinian territory is a member of an emerging regional knowledge network, which would elevate the debate on pro-poor strategies for regional integration in the region.