Overview

Despite intensified development efforts and international assistance in the West Bank and Gaza since the signing of the Declaration of Principles in September 1993 (Oslo Agreement), the Palestinian economy is still heavily dependent on job opportunities in, and exports to and through, Israel. Therefore, it is extremely vulnerable to the security measures of the Israeli Government restricting movements of the Palestinian labour force and goods.

Following a decline in the Palestinian economy between 1994 and 1997 (25 percent drop in real per capita income), primarily as a consequence of closure policies of Israel, its GDP and GNP increased by 3 percent and 5.5 percent, respectively in 1998, resulting in a modest increase in per capita income for the first time since 1994 according to the IMF’s estimates. Also, the unemployment rate dropped to 11 percent early 2000 from 23 percent in 1996.

However, the crisis that started in October 2000 is having devastating effects on the economic and social conditions in the West Bank and Gaza. The immediate outcome of this development is the unemployment of more than 325,000 workers, representing 50 percent of the total Palestinian work force as at March 2001, according to the Palestinian Ministry of Planning and International Cooperation. The daily losses, taking into account of those of wage income, external trade and domestic production, are estimated at US$13.4 million per day.

The long-term challenge facing the Palestinian economy remains the creation of remunerative, productive and decent employment opportunities for its fast-growing young workforce.

Since the signing of the Oslo Agreement in 1993, the Palestinian Ministry of Labour (MOL) has exerted considerable efforts geared towards promoting employment and decent work and enhancing social protection within the territories. This has been further pursued following the recent crisis which emerged in the West Bank and Gaza with a view to generating employment opportunities for Palestinian workers who have been restricted from working in Israel. The Minister of Labour is H.E. Dr. Rafik Natsheh who was appointed in August 1998. Prior to becoming Minister, Dr. Rafik Natsheh (PhD) was member of Fatah and the National Palestinian Council, and member of the Legislative Council.

The Federation of Palestinian Chambers of Commerce, Industry and Agriculture (FPCCIA) was established in 1988 as a result of efforts made by private businessmen and board members of the largest individual member chambers. The ILO is currently providing technical and financial contributions ($30,000) to the emergency programme of the Federation of Palestinian Chambers of Commerce, Industry and Agriculture.

Workers’ organizations in the West Bank and Gaza are represented by the Palestinian General Federation of Trade Unions (PGFTU). The ILO is currently implementing a technical cooperation project entitled "Workers’ Vocational Education and Training Development" (Italy: $325,214), which is designed to strengthen capacities of the Federation in the field of vocational training.

With a renewed commitment to assistance to the West Bank and Gaza, ILO fielded a high level multidisciplinary mission, in February 2000, with a view to further enhancing, upgrading and expanding technical cooperation activities with the Palestinian authority and the social partners. The mission developed a coherent and cohesive programme of ILO action.

Furthermore, following the establishment, later 2000, of a task force on ILO emergency programme in the West Bank and Gaza, a mission was undertaken in March 2001 to assess the priority needs, ascertain the relevance of the ILO project proposals which were prepared as a response to the current crisis, and to explore possibilities for funding and partnership. During this mission, a package of ILO proposals was endorsed by the concerned partners as follows: employment creation and income generation through a multi-component support programme at the community level; vocational rehabilitation of disabled persons and youth with special needs; vocational training; combating child labour; employment mapping; and capacity building of social partners in response to the crisis.

The necessary action is being taken to launch, with ILO’s own financial resources ($350,000), some activities which are designed to cater for the pressing needs for employment creation and for economic and social rehabilitation. Also, efforts are intensified to secure extra budgetary resources to consolidate ILO action.

ILO implemented "Palestinian Employment Programme: A Medium-Term Strategy" (UAE: $1.5 million, operationally completed in February 2001);

ILO has been implementing "Establishment of Shaikh Khalifa Vocational Rehabilitation Centre" (Shaikh Khalifa: $2 million, on-going); and "Income Generation for Disabled Persons" (AGFUND: $100,000);

ILO proposal, "Establishment of Sheikh Fatima Bent Mubarak Vocational Rehabilitation Center in Hebron for People with Disabilities and Youth with Special Needs", was approved by Red Crescent Society in UAE ($1.0 million). Its implementation is scheduled to be launched shortly;

Technical and financial contributions were provided to a training workshop gender mainstreaming, organized by the Palestinian Ministry of Planning and International Cooperation (August 2000);

Fellowships for participation in the following Turin Centre training courses on: management of technical cooperation (March 2000); local employment initiatives (May 2000); improving the performance of private enterprises (June 2000); new trends in vocational education and training policy analysis (July 2000); collective bargaining for trade unions (October 2000).

DANIDA-funded inter-regional programme on human resources development and capacity building on occupational safety and health: training seminars (January 2000) and preparation of the profile on occupational safety and health within the framework of (the budget : $40,000).

ILO has been executing a project, "Workers’ Vocational Education and Training Development" (trade unions in the banking sector in Italy: $325,214).

Participation of the tripartite delegation in ILO/ALO Arab inter-regional seminar on social dialogue (Beirut, October 2000);

Technical and financial contributions to the emergency programme of the Palestinian Chambers of Commerce and Industry (2000-2001).