Palestinian Investors Eye West Bank Opportunities Cautiously

By Mary C. Cook

Investment opportunities in the Israeli occupied territories are being viewed with cautious optimism by Palestinian businessmen at home and abroad. Even so, a first of-its-kind investment conference originally scheduled to take place in East Jerusalem last October was postponed. Conference organizers decided that the time was not yet ripe, and that the new Palestinian authority needs to reconsider its priorities.

There was no hesitation on the part of leading Israeli businessmen, however, who attended the second annual Jerusalem Business Conference in West Jerusalem in late October. Nor was there hesitation on the part of more than 100 Palestinian and Arab businessmen who came to address the Israeli group, as well as to explore finance and marketing opportunities with Israeli investors.

Highlighted at the West Jerusalem conference was the Salam 2000 project of Israel's Koor Industries. The purpose of the Salam 2000 project, according to Koor Industries president Benjamin Gaor, "is the establishment of industrial and infrastructure projects in the proposed Palestinian autonomous areas," including investments in transport, tourism and foodstuffs.

Clearly the Israeli business community is gearing up to take advantage of special incentives being offered to Israeli citizens investing in the territories. What makes the Koor Industries' venture unique, however, is that it is planned to have Palestinian, Arab and European components as well.

The prospective Arab business partner is said to be a Moroccan company, and its Palestinian counterpart is reported to be PLO Minister of Finance Jaweed Al Ghussain, a construction contractor who built a fortune in the Arab Gulf before assuming his PLO duties.

Such reports, according to An-Najah University economics professor Hisham Awartani, have triggered uneasy debate among Palestinians and in the Arab countries. PLO supporters have warned Palestinian businessmen to clear Palestinian/Israeli ventures through the PLO before initiating them.

In Awartani's opinion, all such ventures still are premature. Among the issues which must be clarified are import-export regulations, taxes, which legal system will be used, and where and when. "We have to start talking to the Israeli government about specifics and as equals," declared Awartani. "I'm sure they'll compromise on nearly every point." He noted that such talks will be observed carefully by businessmen everywhere.

At the Israeli business conference, Bassem Khouri, owner of a West Bank pharmaceutical company, described the need for freedom of movement of goods and capital. At present, he said, Israeli military orders restrict nearly all aspects of Palestinian business, including what can be produced, planted and transported. Also restricted is the flow of currency in and out of the occupied territories.

In a briefing at the Gaza PLO headquarters, Dr. Mahmoud Okasha, delegate to the economic talks, predicted that Palestinian businessmen will wait for conditions to improve before investing or expanding their businesses. Many residents of the occupied territories fear the Israeli government plans to keep the Palestinian economy dependent on its own.

Bir Zeit's l~vo Industrial Zones

Outside the village of Bir Zeit, in the Ramallah area, a 400-acre industrial zone is being planned by Daniel Issa, owner of Club Cola. The industrial zone is the most ambitious of its kind to date, and prominent Palestinian businessmen are recorded among its stockholders.

The project, which will cost 6 million Jordanian diners ($9 million) to construct, will include its own water, electricity, sewage and telephone systems; an exhibition hall; children's nursery; gas station; post office; and medical clinic.

Bir Zeit village already has its own 40-acre industrial zone, of which the residents are very proud. The existing smaller scale zone, planning for which began almost three years ago, boasts a pickle factory and soon will have a chemical plant.

Too Soon for Change

Restaurant owner Jad Khamashta describes a more cautious atmosphere in East Jerusalem, where Palestinian businessmen are not investing because they do not anticipate any changes in the next three or four years. Khamashta, whose own business was established in 1963, has suffered so many ups and downs, especially during the first years of the intifada, that he has no plans for expansion.

In the West Bank town of Ramallah, businessman Yusuf Abu Leil believes this is not the time for major investment, although he has been expanding his Beit Maqdes company since August. His plans, however, were made after he returned from Saudi Arabia following the Gulf war. With the help of an Israeli friend, he has been able to bypass government restrictions on Palestinians and import the necessary equipment to improve production.

Palestinian businessmen do not need anyone to give them ideas for investing in their own land, he says. They are only waiting for the political situation to improve.

Saleh Odeh, spokesperson for the Ramallah Chamber of Commerce, is equally cautious. "We need a plan," he says. "We need to know where we are going."

The PLO has made public parts of its Program for Development of the Palestinian National Economy (PDP), prepared by the PLO Economic Department. The plan calls for $11.6 billion during the next six years to rehabilitate the Palestinian economy and renew the infrastructure and public services sector.

The plan has produced grumbles on the part of businessmen in the territories who maintain that they were not consulted by the leadership. Many Palestinians contend that they were ignored because PLO Chairman Yasser Arafat wants to control the new authority's entire economic infrastructure. In response, a one-day seminar was held in the National Palace Hotel in East Jerusalem in early November to explore the role of Palestinian businessmen in the future economic system.

It is a time of change in the occupied territories, but the opportunities are viewed with both optimism and skepticism. Farmers, laborers, and businessmen all dream of improving their lives and providing a future filled with hope for their children. Some, however, compare the situation to being invited to buy a car and start driving before there is any agreement on the rules of the road.