The Palestinian pound, abolished in 1951 soon after the British mandate to govern the region, could possibly be revived thanks to research in the UK.
Jacoub Sleibi, a Palestinian masters student at the University of Bradford’s School of Management, has just completed a dissertation he hopes will lay the foundation of a currency for the territory recently recognised as an “observer state” by the UN.
When did he decide to research the effect of currencies on Palestine?
Mr Sleibi, from Bethlehem on the West Bank, became interested in the topic when he was aged about 14.
“My dad was giving me pocket money in Israeli shekels, but he was paid in Jordanian dinars and others were paid in US dollars. How do we live with three currencies? I could not answer this question.”
A computer science graduate, he has recently finished his MSc in global finance and banking.
Why did he choose Bradford?
There were several reasons, he says. The dean of Mr Sleibi’s previous university, the University of Bethlehem, studied at Bradford.
Mr Sleibi was also eager to carry out research, rather than just be taught.
It took Mr Sleibi two days each time he went to Bradford. His journey involved travelling through checkpoints, over the bridge to Jordan, with a flight from Amman connecting via Frankfurt to Manchester.
What did he learn?
The MSc enriched his knowledge about global financial markets, financial intermediaries and the economics of banking. One of the most important things, he says, is to be confident when using statistical computing, a confidence he gained through his research using econometric tools. Being able to put these tools into practice, as well as being taught the theory, was extremely beneficial.
What does he hope to achieve with his research?
Mr Sleibi hopes his research will be of help in stabilising the economic climate in Palestine.
Palestine, he says, depends heavily on foreign aid, usually received in dollars, while most professionals are paid in Jordanian dinars. But because the Palestinian state’s borders are still controlled by Israel, many shops deal in shekels.
His research, completed in August, finds that changing exchange rates affect the economy in different and unexpected ways. Paying for an item in one currency means that the salesman will charge a higher exchange rate. “You lose money in every transaction,” he says.
“In Palestine, when one exchange rate pushes up the economy another pushes it down. It’s like I push you right and the other guy pushes you left. If we had one Palestinian currency pegged to another currency, GDP would be higher than it is now.”
The logical choice would be to peg to the dinar, he says. This could also help keep inflation down. The Palestinian Authority, the largest employer, cannot afford to increase salaries in line with price rises in Israel. This undermines economic growth, he adds.
How is the research being used?
Dr Jihad al Wazir, governor of the Palestinian Monetary Authority, the precursor to a central bank, is using Mr Sleibi’s research in plans to establish a Palestinian currency. Mr Sleibi says that naming the currency the pound would be “perfect”.
“It is related to history. It is a good name and the British pound is very strong.”
What will he do now?
“The most important thing is to work in Palestine. Some students apply for jobs in the UK. I don’t think this is possible for me. The UK is not in need of people like me. Palestine really needs talented, educated people. I would love to contribute to my homeland.”