The Role of Fisical Policy in Increasing Labor Absorptive Capacity for the Palestinian Economy

Discussion Committee: 
Dr. Atef Alawneh
Shadi Mohammed Ibraheem Othman
This study aimed at acquainting with the role of the financial policy adopted be the Palestinian authority in increasing the comprehendible capability for the Palestinian economy. The study started in limiting the comprehendible capability of the Palestinian economy on the whole level during the period (1968-2001) so that it was divided into three periods like the following: (1968-1987), (1978-1996), (1996-2001). The study referred to the decrease of the comprehendible capability volume, where it reached during the three mentioned periods respectively to 20.7%, 75.7%, 58.7%, of the acting labor forces volume in the same period. The study returned the cause of comprehend dibble cop ability decrease volume to the rise of growth average of the work in a uniform manner faster than its demand growth and that led to the rise of gap volume between the capability and the acting forces volume, where as volume of that gap during the three periods respectively reached to 24%, 34.4%, 33%, of the acting forces volume. Then the role of tax policy was analyzed in increasing the comprehendible capabilities to the Palestinian economy through studying aims and directions of the tax policy and a group of policies and measures which the policies and measures which the Palestinian followed to influence the Palestinian tax system, and the extent of its applicability to achieve the aim of comprehendible capability increase to the Palestinian economy. The study showed that the tax policy adopted by the Palestinian Authority was applicable for encouraging the private sector to invest in Palestine. But the study showed the influencing the comprehendible capability volume to the Palestinian economy and whole investment volume because of the reiterate and security laxity of the political and security atmosphere which limited the hopeful role the tax policy may play in encourages and motivating the in and out investments that negatively affected its capability on widening the local production base of the Palestinian economy. After that the role of public expenses in increasing the comprehendible Palestinian economy was analyzed through studying the aims and directions of public expenses of the Palestinian authority. And the study also showed that the policy of public expenses the Palestinian authority followed was suitable for increasing the comprehendible capability. Whereas expenditure of the infrastructure removed various obstacles before the investment, and the volume of capital formation reached to 37.7% of the whole local income. This was because of the increase of public investment importance as the public investment rate rose to the public expenditure volume from 16% in 1996 to 20% in 2001, in comprehending great volume employment in the Palestinian economy during 1996-2001. And in spite of this the Palestinian authority remained limited in the field of public expenditure because of the limits imposed by the temporary stage agreements from one side and measured of occupation of the other.
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