PRIVATE SECTOR DEVELOPS RESILIENCE AND RECOVERY

UNCLAS JERUSALEM 000511 SIPDIS SENSITIVE SIPDIS NEA/IPA FOR WILLIAMS/SHAMPAINE/BELGRADE; NSC FOR ABRAMS/DORAN/WATERS; TREASURY FOR SZUBIN/LOEFFLER/NUGENT/HIRSON E.O. 12958: N/A TAGS: ECON EFIN EINV EAID PREL KWBG SUBJECT: PRIVATE SECTOR DEVELOPS RESILIENCE AND RECOVERY PLAN ¶1. (SBU) Summary: The Palestinian private sector institutions who are members of the Private Sector Development Working Group, one of the donor coordination working groups chaired by the World Bank, have drafted a Resilience and Recovery Plan, designed to aid the Palestinian private sector during the current economic crisis. The plan prioritizes an estimated USD 150-200 million of proposed projects to limit "de-development" in the Palestinian territories, to influence change in the political situation that is more favorable to private sector interests, and to advocate for freer access and movement. End Summary. -------------- Private Sector Prioritizes Programs -------------- ¶2. (SBU) Palestinian private sector institutions, under the Private Sector Coordinating Council (PSCC),came together in the fall of 2006 and developed the Resilience and Recovery Plan to prioritize assistance to the private sector during the current economic downturn. Palestinian private sector institutions sought to prioritize projects that can address private sector concerns and/or limit "de-development" in the private sector, thereby positioning the private sector for economic recovery once the political situation improves. -------------- Targeted Approach to Economic Priorities -------------- ¶3. (SBU) The plan prioritizes an estimated USD 150-200 million of proposed short-term projects to address several main facets of the Palestinian economy, including: --Financial tools and programs to enable access to credit and mitigate financial risks, --Competitiveness improvements in industry, services, and agribusiness, --Market access (global and domestic),to include countering vertical fragmentation, --Housing and municipal services funded by public-private partnerships and soft loans, and --Institutional capacity-building for private sector organizations to provide member services and advocate for change in the political and regulatory environment. ¶4. (SBU) Once the plan is finalized, the PSCC will arrange bilateral meetings with donors to identify how donor efforts can support it. -------------- Comment -------------- ¶5. (SBU) The private sector's efforts to prioritize its needs during the current economic downturn is commendable. However, few of the proposed projects actually focus on emergency assistance to the private sector; most are conventional economic development projects. The primary value of the Resilience and Recovery Plan seems to be as a mechanism to focus and coordinate donor assistance. It appears the Palestinian private sector organizations will soon use it as a "shopping list" of aid projects for donors interested in increasing their work with the private sector. WALLES