Small Businesses and Entrepreneurs in Palestine

Abstract

In spite of the political situation existence, the human development index in Palestine is a moderate as expressed by education, health and income per capita, due mainly to significance of workers’ remittances who are working abroad mainly in Arab Gulf states and Northern American which formed about 16% of the GDP (AMF, 2006, and UNCTAD, 2004). Exporting labour is considered a positive aspect due to the substantial received cash inflow from abroad. For example, the human development index in Palestine is about 0.736 and rank at 100 Electronic copy available at: http://ssrn.com/abstract=1278057 2 out of 170 states, which is higher than the average of Arab states and higher than the medium human development index and it is about the average of the world human development index. The life expectancy at birth for the Palestinian is about 72.9 years, ranking of 64 among the 170 world states; Adult literacy rate of 92.4% of rank of 48 out of 170 states. The average size of the Palestinian family is about 5.8 persons, with a number of 3.3 rooms for the average Palestinian housing unit (UNDP, 2006, UNDP, 2008 and PCBS, 2008). In addition, the Palestinian women are relatively well educated in comparison to other developing countries and has a good status compared to most of Arab states as expressed by literacy rate, education, work opportunities as well as they have a significant share in advanced profession including dentists, Journalists, lawyers, chemists, and civil engineers, while their share in self-employed business, was about 17% of the total businesses in Palestine (PCBS, 2006). The Palestinian economy is affiliated to the emerging economies but it has distinguished characteristics, which may be summarized as follows; First: The Palestinian National Authority (PNA) has no national currency; this situation resulted in using three currencies for different purposes such as exchange transactions, saving and wealth measurement. Having multi currency circulations reduces the efficiency of the Palestinian economy and denying the benefits which may be accomplished from the revenues associated with the use of national currencies such as the seigniorage process.