Media coverage
Al-Sham Writers Association · 2010-07-31
The author examines public and private shareholding companies in Palestine, as well as those owned by the Palestinian National Authority, stressing their importance in economic development and job creation while arguing that the sector expanded before an adequate legal, regulatory, and cultural framework was in place. He also points to ambiguity, weak transparency and oversight, conflicts of interest, monopolies, and political and media influence surrounding some of these companies, and states that he will address issues such as monopoly rights, taxation, governance, oversight, disclosure, social responsibility, and the fate of subscribers’ funds in subsequent articles.
The author examines public and private shareholding companies in Palestine, as well as those owned by the Palestinian National Authority, stressing their importance in economic development and job creation while arguing that the sector expanded before an adequate legal, regulatory, and cultural fra…
## Shareholding Companies in Palestine ...
The Unspoken Is Far Greater Than What Is Declared (1)
Economic expert
and Chairman of PalThink for Strategic Studies, Gaza
In the coming period, and through a series of articles, I will address the field of work of public and private shareholding companies, as well as those owned by the Palestinian National Authority, with the aim of shedding light on these companies, their strengths and their shortcomings, while emphasizing the importance of the shareholding companies sector in developing the Palestinian economy, creating job opportunities, and its major contribution to bringing the Palestinian economy and society into the ranks of advanced economies.
It is well known that the Israeli occupation used to place obstacles and impossible requirements before the establishment of shareholding companies, whether public or private, with the aim of keeping the Palestinian economy small, family-based, and limited, making it easier to break and restrain its development. It also prevented Palestinians from thinking and working collectively, deprived the Palestinian economy of benefiting from the modest savings that might be available in the hands of ordinary citizens, and likewise restrained Palestinians in the diaspora from investing part of their money inside Palestine.
With the establishment of the Palestinian National Authority in 1994, a fever for establishing shareholding companies spread, whether private or public, across all fields of investment, led by businessmen who possessed sufficient experience and knowledge of this type of company as a result of their work around the world, especially in the Gulf, and who hurried, in rapid steps, to establish private and public shareholding companies. These companies were established with the aim of filling the vacuum that was expected to result from the partial disengagement of the Palestinian economy from the Israeli economy, and as an application of the import substitution policy that was beginning to take shape among Palestinians with the aim of strengthening their economic independence. But because of the newness of the Palestinian National Authority’s experience, and that of Palestinian society in all its components—political forces, civil society, and trade union institutions—in this field, and also because they were all preoccupied with the political concern of completing institution-building, they were not sufficiently qualified to deal with these new entities with their largely unfamiliar legal forms. Small enterprises owned by one individual or a limited number of individuals were the prevailing pattern at that time. Large shareholding companies were established, and huge economic sectors were privatized, such as telecommunications, energy, and gas in the Gaza Sea, and banks, banking institutions, insurance companies, and mortgage companies were established before the completion of the legal and legislative infrastructure regulating the work of these companies, and before social and cultural awareness of them had matured.
## Is It Absence or Deliberate Exclusion from the Picture
The sector of private and public shareholding companies still needs further discussion in a way that enhances transparency and official and popular oversight, especially since the focus in past years by local and international civil society institutions was concentrated, to a great extent, on the performance of the Palestinian National Authority, which was the focus of many local and international reports that confirmed the existence of suspicions regarding the spread of corruption, favoritism, and poor administrative performance. Meanwhile, the field of shareholding companies was not addressed to the same degree despite its importance. Therefore, the sector of private and public shareholding companies is dominated by a great deal of ambiguity, lack of transparency, and low levels of official and popular oversight, despite the annual reports these companies publish on their websites.
The relationship of some shareholding companies with official and societal oversight institutions is characterized by favoritism, courtesy, and conflicts of interest ... which has made them, to a large extent, distant from follow-up and scrutiny. Some companies, especially monopolistic ones, also enjoy a great deal of influence at the political and media levels. Many researchers and interested observers have encountered refusals by some local newspapers and news websites to publish any viewpoint or article that addresses these companies critically or questions them and their role, because these outlets depend heavily in their funding on paid advertisements from these companies. It is also noted that some of these companies follow an unprofessional hiring policy in that they take non-objective criteria into account, such as family affiliation, political affiliation, and social status. Therefore, from time to time, there circulates in people’s minds serious and deep discussion about these companies, repeatedly in public and even more often in private, whether those owned by individuals or those affiliated with the Palestinian National Authority, such as the Palestine Investment Fund, the Palestinian National Authority’s shares in many companies such as the telecommunications company, the power generation station in Gaza, the gas fields discovered in the Gaza Sea, and the monopolistic contracts signed by the National Authority in the early years of its existence, as well as the fate of some international aid funds or private funds that were looted under the name of fictitious companies that had no existence except on paper. Everyone remembers that the first Palestinian Legislative Council had previously opened the files of many of these companies. The current Attorney General also stated, upon assuming office years ago, that there were corruption files worth more than $700 million. After several years have passed since then, we are still waiting!!! These are files proposed to the Anti-Illicit Gains Commission, which was recently established....
In view of the great importance of the private shareholding companies sector, or those owned by the National Authority—“which are the funds of the Palestinian people”—and because of the multiplicity of issues raised about them, I will address in a series of successive articles some important aspects related to this sector. With the reminder that the Palestinian people, who suffer poverty and need in the Gaza Strip, dependence on donors in the West Bank, and poverty and dispersion in the refugee camps and along the borders, have every right not only to knowledge, but also to enjoy their funds and resources.
Some of these issues will be addressed in the following articles:-
1.
How the right of monopoly is granted to certain companies and not others in a given field ... and when does the monopoly end!!.
2.
The nature of the agreements signed with these companies and the extent to which they are monitored by oversight institutions.
3.
The extent of these companies’ compliance with paying the taxes due from them.
4.
The extent of the Authority’s oversight, and that of its institutions, over these companies in terms of wage levels, the level of service provided
to the public, and the standards for evaluating it!!!
5.
How members of the board of directors are selected, and the extent to which professionalism is applied and social and political favoritism is avoided.
6.
Some individuals hold membership in numerous companies at the same time, which generates enormous income for them and leads to courtesy and hypocrisy in order to preserve the membership that brings huge income with hardly any effort.
7.
The huge bonuses received by members of boards of directors in return for attending board meetings.
8.
The political influence enjoyed by some shareholders and members of boards of directors.
9.
Oversight of these companies’ accounts by the official institutions authorized to do so.
10. The extent
of the powers granted to the Palestinian National Authority and its institutions in some of these companies’ strategic decisions, such as dismissing dozens of employees without prior notice or closing branches, etc.
11. The percentage of funds that these companies employ in investments within the الوطن and in which fields, and those they employ outside it.
12. The extent of these companies’ commitment to disclosing the results of their annual operations as required by the Basic Law.
13. The extent of these companies’ cooperation with researchers wishing to study and evaluate these companies, and the making available of financial and administrative statements for public review through their websites or in discussion sessions and public dialogues, as required by law.
14. The extent of these companies’ contribution to social development under what is called the “Social Responsibility Fund,” as is the case in countries around the world, and how it is distributed across the الوطن’s different regions.
15. The fate of the subscribers’ funds in companies that have not operated despite the passage of years since their establishment.
In the hope of generating a serious discussion around the field of shareholding companies, whether private, public, or governmental. It is also a call to the Palestinian government headed by Dr. Salam Fayyad to look into the situation of these companies in a way that enhances the transparency and institutionalism it seeks, and also a call to oversight institutions, universities, and civil society organizations to pay attention to this field of work. Stressing that the talk here is not general and does not include الجميع, as there are many shareholding companies that have played and continue to play an important role in national development, and they are a good example that we hope those shareholding companies will follow that still deal with Palestine as though it were merely an investment opportunity that must be exploited, and quickly, only.
Text © Al-Sham Writers Association — archived here with attribution to the source. — Machine translation for archival reference. — Original source