June 4th, 2010
11:48 AM GMT
(Abu Dhabi) On our program, Marketplace Middle East, we have a special segment called “Bright Sparks” that features the rising stars of the next generation, those that are coming up with bright ideas that create companies, jobs and fulfil dreams.
The flotilla attack not only amounted to another real setback for long-term peace, but also a major setback of economic activity.
Prior to this week’s negative turn of events in the Palestinian Territories, investors have commented about the relative stability leading to real growth in the West Bank. They spoke to soon.
Last year, economic growth surged 8.5 percent riding on the back of government aid pledges, sizable private investment from the Arab region and an incredibly active Diaspora.
In 2010 alone, donor governments are contributing $100 million of direct budget support.
A back-of-the-envelope tally indicates that some $2 billion have been poured into the West Bank and Gaza in the past five years. That is a huge sum of money for a population of less than four million people.
This investment translates into a flotilla full political and business goodwill for a community that is known for its survival, especially its entrepreneurs – the Bright Sparks that want to make things happen.
Dubai-based private equity group Abraaj Capital launched a $50 million Palestinian fund for small and medium-sized enterprises in January at Davos, part of a broader $1 billion initiative to support SMEs. Small business in any corner of the world usually generate 90 percent of employment.
In his office at the Dubai International Financial Center, the founder of Abraaj, Arif Naqvi said the first response to the flotilla attack has to be an emotional one, since we are witnessing another lost opportunity.
Naqvi is not part of the Palestinian Diaspora, but of Pakistani descent. He does however make up what we can call the choir of investors who believe that economic activity and opportunity will be the best recipe for stability.
Investors like Naqvi have been attempting to look at the Territories in their entirety, but the reality is quite different.
In the West Bank where Prime Minister Salam Fayyad has introduced another reform and development programme, commerce not dependent on the free movement goods is burgeoning - financial services, telecom operators and outsourcing.
Many want to see road blocks removed and the start of the predictable movement of goods so that internal trade can take hold. It is difficult to ship perishable items if you don’t know the roadblock will last 20 minutes or 20 hours.
In Gaza, the situation has been described as a humanitarian crisis - and the numbers reflect such. According to the United Nations, unemployment is at 44 percent; 70 percent of the population is living on $1 a day; 80 percent is dependent on aid. The people of the territories are cut from the same cloth, but are treated very differently.
The attacks on the aid flotilla coincided with the Palestinian Investment Conference in Bethlehem. If there is one gathering to illustrate external government, NGO and business support for the territories, this was it. Palestinian Authority President Mahmoud Abbas renamed the meeting the "Freedom Conference" in light of this week’s confrontation at sea.
This could translate on the ground to freedom of aid to reach Gaza, but also for the Bright Sparks who need lasting stability to prosper.
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