Will Separating Industry from Commercial Chambers Lead to Economic Growth or a Decline Towards Division?

As the Palestinian economy faces unprecedented challenges, a heated debate has resurfaced regarding the future representation of industry in Palestine. Some believe that establishing an independent Chamber of Industry could be a gateway to developing local production and enhancing competitiveness, while others warn that this step might open the door to division within the private sector and scatter efforts at a moment when the country needs a unified economic stance. The question posed is: Do we need new institutions, or do we need to reshape the roles and expand the powers of existing ones?

Why now?

The establishment of the Ministry of Industry marked an important shift, as it provided a clear governmental address for industrial policies and encouraged thinking about more specialized representative frameworks. With rising production costs and difficulties accessing markets under Israeli constraints, industrialists are seeking more effective representation mechanisms. Additionally, some international support programs condition engagement with specialized sector institutions, reinforcing the idea of having an independent industrial body capable of attracting direct funding.

Between the General Union of Palestinian Industries and the Proposed Chamber

The General Union of Palestinian Industries plays a national role in policy formulation and represents industrialists before official bodies. In contrast, the proposed Chamber of Industry could provide direct operational services, such as issuing certificates of origin, organizing exhibitions, and training personnel. However, the success of this separation requires a clear definition of powers to avoid role duplication.

Political and Economic Dimensions

Opponents of the separation view the idea as a reflection of power struggles within the private sector more than as an institutional reform, while supporters point to the weak representation of industrialists in some chambers—sometimes not exceeding 1%—as evidence of the need for a new structure that gives them a stronger voice.

Government Role and Strategic Plan
The absence of a clear governmental plan leaves the door open for individual interpretations. The plan should be based on:

Choosing a clear representation model, whether by enhancing industrial committees within chambers or implementing an organized separation.

Aligning institutional roles between commercial chambers, the union, and any new entity.

Linking institutional reform to industrial development policies, such as developing industrial zones and facilitating market access.

Having a declared governmental vision ensures that any amendment serves the supreme goal: stimulating industrial growth and enhancing the resilience of the national economy.

Restructuring Roles Instead of Creating New Bodies
It is difficult to justify the establishment of a new chamber to perform a secondary role that the General Union of Industries could conduct by expanding its functions and granting it executive and service powers alongside its strategic role. This pathway preserves the unity of the private sector and prevents dual representation.

Concise Lessons from Around the World

Turkey and Jordan: Independent industrial chambers with close coordination with commercial chambers.

Germany: A unified chamber for industry and commerce with strong industrial committees.

The United States and Japan: Institutional integration without complete separation, with active sector associations.

Integration or Separation?

In the Palestinian context, the small market size and weak industrial base support the choice of institutional integration over separation, with enhanced industrial representation within existing structures. Separation can be reconsidered in the future if production expands and resources increase.

Conclusion

Separating industry from commercial chambers could be a constructive step if it comes as part of a comprehensive reform, but it might deepen division if implemented without consensus. The priority now is to build effective integration among private sector institutions, with the government adopting a clear strategic plan that outlines the features of the next phase.