Private Sector Promotion Programme

Programme description

Title: Private Sector Promotion Programme
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Palestinian territories
Lead executing agency: Ministry of National Economy
Overall term: 2013 to 2017


The economic consequences of the crises and conflicts in the Palestinian territories include the weakening and closure of numerous enterprises, growing unemployment and rising poverty.

Options for economic development are severely curtailed due to the political instability in the country. For one thing, the risk of a conflict that can reignite at any time creates nervousness among those who would invest or lend money; for another, the mobility of people and goods is highly restricted in the Gaza Strip and the West Bank. In addition, development opportunities for enterprises are hampered by the poor business environment in the area controlled by the Palestinian Authority and within the formal economy.

The Palestinian private sector, more than 90% of which consists of small and medium-sized enterprises (SMEs), has proven to be fairly robust, especially when meeting local needs for construction, agriculture, trade, services and such like. So far, however, only a few solitary export-oriented businesses have managed to demonstrate their international competitiveness.


The Palestinian SME sector has been strengthened sustainably through improvements to the business environment. Existing income and employment opportunities have been secured for the medium term, while new ones have also been created.


The programme takes account of the complex problems facing SMEs at both national and local levels, and operates in accordance with the Palestinian Authority’s own development plans. It uses a multi-level approach to strengthen the self-help potential and competitiveness of the private sector (companies and their associations), particularly in terms of their lobbying and dialogue skills. It also works towards improving the regulatory, administrative and institutional conditions at both national and local levels.

To enhance support structures for SMEs, the programme is contributing to capacity development in the Ministry of National Economy and within the formal economy. In a pilot measure for the extension of German-Palestinian business relations (B2B), the programme uses targeted approaches to effect knowledge transfer and raise the international competitiveness of the Palestinian private sector.

In Gaza, the programme concentrates on initiatives with short-term impacts as the unstable political situation makes medium or long-term planning very difficult.

The project is co-financed by the Canadian International Development Agency (CIDA).

Results achieved so far

Services provided by the chambers of commerce have been harmonised, and are being introduced to the regional chambers of commerce through a centralised digital workflow system. The umbrella association of Palestinian chambers of commerce has been strengthened in its organisational structure, which is helping the association to work more effectively.

By opening regional branches, the Palestinian Ministry of National Economy has been able to move closer to its customers and significantly reduce processing times. This has been made possible by implementing a central database and archiving system that gives the branches permanent access to the database. A standardised manual of procedures has been published which addresses the provision of services by the Ministry to the private sector.

In the Bethlehem area a model for promoting local business has been developed by which initiatives designed to strengthen the region are jointly planned by representatives from the Ministry of National Economy, municipal and provincial councils, chambers of commerce and trade associations.

Across the entire territories, the IT sector and the shoe and textile industries are being supported by measures designed to internationalise enterprises and boost their exports. Such measures include facilitating appearances at trade exhibitions and encouraging direct contact with businesses in Germany and elsewhere in Europe.