1. FOR ECONOMIC COOPERATION BETWEEN PALESTINE, TURKEY AND ISRAEL
ANKARA FORUM
FOR ECONOMIC COOPERATION BETWEEN PALESTINE, TURKEY AND ISRAEL

2. Industry for Peace Initiative
Union of Chambers and Commodity Exchanges of Turkey
tepav
Economic Policy Research Foundation of Turkey
Industry for Peace Initiative
East Jerusalem, 04 September 2007

3. TOBB Industry for Peace Initiative
Agenda
The time for speeding up and diversifying the Ankara Forum process
Progress recap for the Erez Project
Feasibility approach and results
Site selection for another industrial estate project
Conclusions & immediate steps to be taken

4. TOBB Industry for Peace Initiative
How to move from here?
There is an urgent need to diversify Ankara Forum’s activities
Political developments hampering progress on the ground: credibility is at risk.
Gaza townhouse meetings on the agenda supposedly at this stage.
Quartet’s new involvement, Blair’s appointment
Back to working with PIEFZA
How to start diversification?
Parallel project in the West Bank
TOBB-BIS to apply for at least two projects
SME development and vocational training programs in line with investment promotion activities
Any role for border crossings. PPP projects possible?

5. Ankara Forum meetings First meeting in Ankara (April 2005)
TOBB Industry for Peace Initiative
Ankara Forum meetings
First meeting in Ankara (April 2005)
Second meeting in East Jerusalem (June 2005)
Third meeting in İstanbul (September 2005)
Fourth meeting in Tel Aviv (January 2007)
Fifth meeting in Washington, DC (March 2007)
Sixth meeting in East Jerusalem (September 2007)

6. Progress with the Erez Project
TOBB Industry for Peace Initiative
Progress with the Erez Project
Ankara Forum decision (June 2005)
Pre-feasibility report completed (August 2005)
TOBB-BIS company established in Istanbul (November 2005)
MoUs signed between PNA-Turkey and Israel-Turkey (January 2006)
Engineering projects completed (February May 2006)
Investment promotion started
OECD Forum in May 2006

7. New developments Draft agreements prepared (February 2007)
TOBB Industry for Peace Initiative
New developments
Draft agreements prepared (February 2007)
Concession agreement
Security and trade facilitation protocol
Observers joined Ankara Forum (June 2007)
World Bank and the US Chambers
Feasibility report for Erez completed (July 2007)
Palestinian general manager appointed (August 2007)
Naser Jaber, former DG of PIEFZA
Company registered in Ramallah (August 2007)
Certified support from the Israeli side for tax and customs regulations (August 2007)

8. Why our project is different?
TOBB Industry for Peace Initiative
Why our project is different?
The island concept – our new approach for industrial development
Effective service delivery (infrastructure, regulatory environment)
Well secured island
Well connected island
Focus on Turkish companies diversifying their activities.
The status of Palestine in producing for US and Arab markets
Sustainability issue-not a charity project.
Business dialogue mechanism as a problem solving device

9. Feasibility concept of Erez
TOBB Industry for Peace Initiative
Feasibility concept of Erez
Scenarios based on security
Minimum security (30 guards with low wage, 3 vehicles)
Maximum security (300 guards with high wage, 16 vehicles)
Scenarios based on demand (time it takes to reach 45 medium sized tenants)
Scenario 1: 4 years
Scenario 2: 7 years
Scenario 3: 9 years

10. Feasibility results Economic return is greater than financial return
TOBB Industry for Peace Initiative
Feasibility results
Economic return is greater than financial return
Economic returns include benefits to the Palestinian economy (direct and indirect job creation)
Project is economically feasible under every scenario
This implies there is a rationale for public-private partnership
However, project is financially feasible only under minimal security scenario
This implies there is a need to compensate the security budget (PPP)

11. Economic assessment under lowest demand, maximum security
TOBB Industry for Peace Initiative
Economic assessment under lowest demand, maximum security

12. TOBB Industry for Peace Initiative
Financial assessment results under minimum security+low demand, and maximum security+high demand
negative

13. How to move forward in the West Bank?
TOBB Industry for Peace Initiative
How to move forward in the West Bank?
Conceptual framework will be similar to Erez
island concept
Need to select a site, or sites?
Two proposals from former PIEFZA plans
Jenin / Jalameh
Tarqumia / Tarqumia
Gathered some initial information, but need more thorough analysis for decision making

14. Comparision of two canditate sites
TOBB Industry for Peace Initiative
Comparision of two canditate sites
Jenin
Tarqumia
Land disputes
problematic
possible
Operational crossing
exists
Special access road
Easy, 2 km
Harder, 5 km
Off-site infrastructure No
Security conditions
Hard
Calmer
Involvement of “others”
Yes
(Germans, Italians)
Border disputes
Maybe
Palestinian control B+
B zone

15. Who should make the site selection?
TOBB Industry for Peace Initiative
Who should make the site selection?
Erez example is good
Relevant PA authorities have to provide the land for industrial estate development
To foster the decision making process of the PA authorities it might be good to have a committee to a prepare site comparison note
committee should coordinate with authorities
towards pre-feasibility
Previous pre-feasibility studies
Tarqumia by USAID
Jenin by KfW

16. TOBB Industry for Peace Initiative
Where are we now?
Erez scheme will be mostly applicable to the new project in West Bank
Private access road concept, joint security cooperation, investment promotion in Turkey
This will save us time and help us move faster
However, there are critical differences, which were not in Erez—need for donor funding.
Private land/Land ownership problems / disputes
Off-site infrastructure
Lower security considerations

17. Conclusions – Moving forward
TOBB Industry for Peace Initiative
Conclusions – Moving forward
It’s now important to increase visibility and presence of the Ankara Forum on the ground
Establishing an Ankara Forum office
Location: East Jerusalem
We need an action plan for the next 2 years
Activities in SME development, vocational training, border modernization, capacity building for chambers, youth programs
A committee to prepare the action plan
Liaison with Quartet Office and General Dayton’s team
A committee for West Bank site selection