TO:              Dr. Bishara Bahbah, ISEPME

FROM:           Courtney Nelson, HIID

October 1995                                                             Dear Bishara,

          You asked for a set of recommendations for possible assistance to the Ministry of Planning and International Cooperation (MPIC), starting with suggestions for immediate action, medium-term action, and longer-term action.   


Azrak, Jordan 1973


          Director General Majdi Khalde of the MPIC has identified three areas in urgent need of technical and financial support: strategic development planning, institution-building and human resource development, and scientific and technical planning. Three departments in the planning division of the MPIC are to be created for these purposes.

          While in Gaza, I drafted a proposal for technical assistance in creating an economic planning unit, which in my opinion has the highest priority of the three areas. The proposal has short and long term implications. In the long term, the proposal may be funded by an international donor and executed by an agency of the donor's choice. Alternatively, the proposed planning activities could be part of the larger proposal the ISEPME is making to the World Bank, for execution by ISEPME and HIID.

          In either case, short-term consultations are recommended in order to help the Ministry define its role in formulating economic policies and creating a planning capability. A senior economist with extensive experience in planning should visit Gaza and the West Bank in late March for two weeks, in order to determine priority tasks for a planning unit and initial human resource requirements. Local availability of qualified people should be assessed, in government and non-government institutions, and an agenda drawn up of technical assistance requirements to supplement local skills for the ensuing six to ten months, assuming it would take that long for any donor to respond to the MPIC technical assistance proposal.

          I would recommend Dr. Edgar O. Edwards for this assignment. He is currently in Nairobi and can be reached by telephone, or fax.

          Secondly, to help the MPIC establish a department of institution-building and human resource development, I would propose to return to Gaza for two weeks in March. I would work with Edwards (and probably Steve Peterson on budget) and would assist Dr. Salem al Kourd, the person invited to set up that department. Working with Dr. al Kourd, we would survey local training resources, identify donor interest in supporting training locally and abroad, and initiate a process of identifying priority training requirements of PNA agencies. First priority would go to defining training requirements of MPIC staff, but the Ministry also intends to assist other agencies to meet their training needs.

          The third immediate action recommendation is to arrange short-term training opportunities for MPIC and Ministry of Finance staff. You suggested that six or seven candidates could be supported to attend HIID workshops in such areas as public budgeting, tax administration, project appraisal and environmental economics. This idea was warmly welcomed by officials of both ministries. Brochures were left with Dr. Amin Baidoon, Director General of the International Cooperation division and temporary head of the budget process. We may need to fax him to remind of the need to submit candidates for courses.

          Dr. Baidoon also expressed great interest in training in diplomacy or negotiations. The Harvard program on conflict resolution may offer short courses or workshops that would meet MPIC immediate needs.


          In the medium term, ISEPME will want to explore funding possibilities for a program combining economic advisory services and institutional capacity-building in economic management to the PNA as a whole. The MPIC would be one important focus of such a program, as would the Ministry of Finance and the Ministry of Economy. A proposal for this program needs to be formulated and discussed with Palestinian authorities prior to offering it to the World Bank. The Bank would be invited to fund the proposal, or to assist ISEPME in arranging funding from donor resources.

          Proposal development could be advanced by the proposed March visits to Gaza by Edwards, Nelson and Peterson. Subsequent short-term consultancies should be arranged in order to maintain momentum in assisting the MPIC and Ministry of Finance to improve their functioning, and in order to shape the longer-term program to fit PNA needs and resource availability.

          A second medium-term activity would be to support the efforts of the MPIC to define long-term goals of the society as a basis for planning. The idea of appointing a commission on national goals was received with interest by Minister Nabil Shaath and his Directors General, as well as by Dr. Sari Nusseibeh, but it is unlikely to be acted upon without further elaboration and discussion. Majdi Khalde would like me to discuss this idea with a group of leading thinkers in Gaza on my next visit.

          One aspect of this goal-setting process would be consideration of alternative models or strategies for development. The ISEPME project could facilitate that process by arranging visits by people who could present successful experiences of their countries in various sectors or in overall strategies. HIID knows many of the leading economic leaders in Korea, Singapore, Indonesia, Thailand and Chile, who could make effective public presentations.

          A third medium-term activity again involves training. Depending upon how advisory work proceeds in the tax and budget areas, HIID workshops in these fields could be presented in Gaza under Ministry of Finance auspices for staff of the Ministry and of other ministries engaged in budgeting. These workshops should be part of a general effort to improve the economic management capacity of PNA agencies.


          In the long run, the ISEPME program should engage in the systematic development of economic management capacities of PNA agencies. Resource constraints will affect the choice of activities, but a good start has been made in the area of tax administration. Budgeting, economic planning, and human resource development strategies are next on the agenda. Other agencies are already at work in the areas of environmental planning and physical planning. Strengthening institutional capacities of appropriate units in the government will allow the PNA to perform more effectively.

          At the same time, the PNA will need continuing high-level advice on policy issues. An advisory council could be formed of economists from Harvard and MIT, to work with the committee of Ministers dealing with budget policy at the present time. This committee, composed of Ministers of Planning, Finance and Economy, will set the economic course of the PNA. A combined approach by ISEPME, providing periodic policy advice to the committee of Ministers and providing technical assistance and training to units in each of their Ministries, would be ideal, if it could be afforded.


          To summarize recommended actions:

Short term:

         Edgar O. Edwards for two weeks in March to help identify priority planning-unit tasks, assess available human resources, and design strategy for supplementing local skills during the six to ten months before a long term assistance program can be mounted.

         Courtney Nelson for two weeks in March to work with Edwards and to help launch a department for institution-building and human resource development in the MPIC.

         Arrange participation of six or seven PNA officials in appropriate HIID summer workshops.

         Explore availability at Harvard of workshops on negotiations and conflict resolution.

Medium term:

         Design program for economic management capacity-building and economic advisory services for the PNA as a whole, and seek funding for it.

         Support MPIC efforts to define long-term goals of the society as a basis for planning. Assist MPIC to design a process for goal-setting, and supply experienced visitors from successful Asian and Latin American countries to elucidate their successes.

         Present HIID workshops in areas such as budgeting and tax administration in Gaza.

Long term:

         Implement a two-pronged program of (1) providing high-level economic policy advice to a committee of senior PNA ministers and (2) building the economic management capacities of key units, such as those charged with tax administration, budgeting, planning, and human resource development.

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