December 3rd, 2013
10:45 AM GMT
Iran's six month agreement with P5 + 1, Egypt's transition after the ouster of Mohammed Morsy and Syria's long and catastrophic civil war have nudged a plan to revitalize the Palestinian Territories right off the global agenda.
I was in the room when U.S. Secretary of State John Kerry unveiled, on the evening of May 26, what he saw as an ambitious plan to deliver hope to Palestinians by jump-starting investment. His speech closing out the World Economic Forum regional meeting at the Dead Sea in Jordan was met with a heavy dose of skepticism because it lacked specifics.
Kerry presented an economic road-map, calling for $4 billion of private investment covering eight sectors from agriculture to tourism. If you build the right framework, according to the top U.S. diplomat, investors will come. The goal is to boost the economies of the West Bank and Gaza by up to 50% in just three years.
While no one can really argue with the spirit of the economic initiative, the reality on the factory floor, whether it is light manufacturing or in telecommunications, is very different. Palestinian businessmen suggest it is time to be more holistic in the approach. One cannot divorce the peace process from business.
In the West Bank city of Hebron, I met the founder of New Tossetti shoes Shaker Syaj, who over Arabic coffee in his boardroom gathered half of the 30 family members involved in the ageing, but active three story factory.
Syaj is a true survivor of uncertainty, having opened the operation a half century ago. The company makes 12,000 pairs of shoes a day, but with low interest loans and export promotion by government, he says the company could boost sales by 30% in the first year alone.
Business in the West Bank is in a word complex. Whatever work is generated seems to be derailed by the stalemate in peace talks and sporadic violence. New Tossetti used to export 200 thousand pairs of shoes a year to Germany until the second intifada or uprising against Israel in 2001.
"When the intifada started our German partner stopped importing our product, because they were afraid of the risk to their business due to the political situation." said the operations manager and nephew of the founder, Omar Syaj.
But the shoemaker fits the profile of the type of company U.S. Secretary of State John Kerry wants to see expand under his Palestinian economic blueprint.
Businessmen suggest inbound investment is not enough. Restrictions need to be lifted as well to send a signal to the outside world, that it is an even playing field for business regardless of which side a company sits on of the giant security wall that divides Israelis and Palestinians.
For New Tossetti these restrictions mean some chemicals used as adhesives are banned for import. Israel fears certain compounds could be used in bomb making.
Third and fourth generation mobile technology has been blocked and there are the more obvious barriers to trade such as checkpoints which slow down the flow of hard goods.
After spending the morning on the factory floor and experiencing the worn out infrastructure in the West Bank, the team and I went to technology networking event in Ramallah.
The talk was of leap-frogging those barriers and thinking big through e-commerce. The goal is to link start up companies with investors. The chairman of Arabreneur and co-founder of the event Abdulmalek Al-Jaber said this effort was driven by a lack of any progress despite many attempts in the last decade.
"We tried to industrial zones it failed, we tried to do projects like hotels and resorts, it failed because these kind of projects are very dependent on the peace process," said Al-Jaber in between business presentations.
This impacts tourists and their spending as well. There's a steady stream of visitors at the Church of the Nativity in Bethlehem. But the West Bank economy is not seeing the full benefits of all this traffic.
"These people come in and spend a day in Bethlehem. We receive 2.3 million tourists a year out of which 1.8 million don't spend the night in a Palestinian hotel. What is the reason? access and movement," Fadi Kattan, Director General of ACA Travel and Tourism told me over coffee just outside the church grounds.
And free movement Palestinians say cannot be tackled without a peace agreement and that after a week on the ground seems more contentious than ever.
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