Weekly Program Highlights
Palestinian Territories – As part of the program “Shaping
the Israeli-Palestinian Private Sector Dialogue,” the Israel/Palestine
Center for Research and Information (IPCRI) is making
significant progress in completing their business guides, which will
identify obstacles to inter-territory commerce and provide a political
foundation for advocacy. Extensive research for the movement and access
sections of the guide was conducted over the last few weeks, and several
meetings with officials in the Civil Administration and the Ministry
of Defense were held. Moreover, in preparation for the Israeli-Palestinian
Business Development Forum’s
(the precursor to IPCRI’s greater goal of establishing a bilateral
Israeli-Palestinian chamber of commerce) upcoming seminar,
IPCRI has interviewed and engaged a number of cross-boundary businesses
who have expressed enthusiasm about the prospect of a bilateral chamber
of commerce.
Palestinian Territories – As part of the program “Promoting
Transparency, Accountability, and Business Ethics in
the Palestinian PrivateSector,” the Center for Private Sector Development
(CPSD) held a workshop in Ramallah on modernizing governance
in commercial banks as part of its “Transparency and Accountability” educational
and advocacy series. A primary focus of the workshop
was on lending policies, particularly on how to move
away from the commonplace collateral-based lending policies that result
in very low credit-to-deposits ratios (around 25 percent, nearly one
third of what is common in neighboring countries). The consequence is
that the bulk of deposits into local banks (around $6 billion) is being
siphoned off for investment abroad.
Background and Overview
The Middle East and North Africa extends some 7,000 miles
from Morocco to Iran. Within this area are 19 countries
whose political and economic cultures, while not homogeneous,
share a heritage shaped by Islamic, Arab, Persian, Ottoman,
and European rule. Political and economic developments
vary greatly from country to country but also share
common features. The national economic systems in the
region are either statist or mixed economies. The political
systems run the gamut from full authoritarian regimes
to emerging democracies.
Many countries in the region suffer from weak economies,
illiteracy, and high unemployment—a situation
that particularly affects the burgeoning young population,
which feels increasingly marginalized and disillusioned
with government. While structural reforms have somewhat
lessened the role of the state in the economy, there
is a sense of unbridled and unrestricted commerce in
the region, which is often referred to as the bazaar
or souk economy. Though a number of countries are seeking
to enter the global economy by adopting market-opening
reforms, they often lack the self-correcting market
mechanisms and institutions necessary to create modern
economies.
Over the past year, an internal movement towards political,
economic, and social reform has begun throughout the
region. These reform movements are in various stages
of development. Pressure to reform, however, is not
only coming from external forces, internal intellectual
movements, or opposition parties, but also from the
reality of increasing poverty and unemployment, which
have become serious problems. In addition, conflicting
economic policies are limiting investment opportunities
throughout the region. A vision of reform exists, but
often society does not have the confidence, expertise,
or information about how to pursue it. Reformists see
political reform in the form of public participation
in policymaking as a catalyst to economic and educational
reform.
CIPE’s 2006 strategy builds upon the momentum from internal
reform efforts in the region through strategic partnerships
with business associations, economic policy institutes,
and economic journalists. Pressures to join the WTO,
engage in free trade agreements, and other international
institutions provide a platform for local business groups
to advocate for institutional reform.
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