Internal obstacles to West Bank Industrial Development: governental and private management decisions.

Abstract

Obstacles to industrial growth and development on the West Bank are various and are of different magnitudes, causes and nature, and not all are the result of the Israeli occupation. There are also constraints to West Bank industrial development that stem from the influence of internal options. The main objective of this study, that crosses qualitative and quantitative methodological approaches (in-depth interviews and a questionnaire to a statistically representative sample of the West Bank manufacturing activities), is to disclose and discuss two major internal obstacles that should receive more attention and effort from the Palestinian National Authority in order to overcome their negative impacts on local industrial competitiveness. On the one hand, hindrances caused by governmental decisions related to reduced incentives to assist local firms dealing with fund-raising issues; as well as a policy of high taxation that limits firms’ capability to face difficulties and grow by embracing new projects and investments; and the absence of a broader economic strategic policy to promote West Bank industrial development. On the other, obstacles that stem from outdated production processes associated with low technological investment in local firms, as well as from the low priority given to the quality of local production and to advertising and promotion investments.