The Palestinian economy is one of the many, but less often discussed,
victims of Israeli military aggression on Palestinian towns, cities, villages and
refugee camps. Before Israeli prime minister Ariel Sharon was elected, the
Palestinian economy was engaged in an internationally acknowledged
pattern of growth. This growth started to be realized despite the fact that
during the first several years after Oslo, Palestinian standard of living actually
decreased because of Israeli closures and land appropriation for illegal
settlement building. The Office of the United Nations Special Coordinator in
the Occupied Territories (UNSCO) reported, "In the spring of 2000, the
International Monetary Fund (IMF) and the Palestinian Authority (PA)
Ministry of Finance projected that the Palestinian economy would continue
to grow as it had since 1997 and that real growth rates for GDP and GNP for
the Palestinian territory would reach 5 and 6 percent respectively." Today
the Palestinian economy is in shambles.
Israeli war propaganda, which the US administration has blindly adopted,
proclaims that Palestinians and the Palestinian Authority initiated a
campaign of terror against Israel by 'creating' the Palestinian Intifada. This
myth is the most naked form of misinformation and media spin aimed to
cover Israel's war crimes against Palestinian civilians. Both the numbers
themselves as well as US contractors working for with The United States
Agency for International Development (USAID), which has worked side-by-
side Palestinians for years in both public and private economic sectors, can
attest to the falsity of this myth.
In the midst of the current backdrop of political, economical and social chaos
it may be hard to imagine that an economic development component has
remained active in the Palestinian Authority areas of the West Bank and
Gaza Strip throughout the past 19 months. Since Prime Minister Sharon
was elected, Palestinian cities have been under a choking military and
economic blockade. Domestic travel and trade have been made nearly
impossible, and Israeli state assassinations have had 3 million Palestinians
living in constant fear. During these 19 months, over 1000 Palestinian have
been killed at the hands of Israel. This latest Israeli onslaught is only another
chapter in Israel's attempt to destroy the emerging State of Palestine.
However, the tanks have yet to withdraw and the Israeli actions have
backfired. Now the world can see what Palestinians have endured for the
past thirty-five years.
The international media has so far preferred to focus on those Palestinians
that have fled the indiscriminate Israeli shelling and Israeli assassination
campaigns to relocate in the West or other Arab countries. However, to
understand the resilience of the Palestinian community is to take a more
detailed-albeit less dramatic-look at what is happening on the ground behind
the bleak daily headlines.
Economic development projects are being built, investments are being made
and efforts continue to be exerted to forge the difficult path toward
development. The resilient Palestinian business community views the
deteriorating situation on the ground as yet another, although major,
business challenge toward economic independence, one that business
communities in the US, UK or UAE will never face. Nevertheless, building an
independent economy is part and parcel of this Intifada.
Palestinian investors entered the Palestinian economy in full-force following
the 1993 Oslo Peace Accords. At the time, three major investment groups
were created, mainly by Palestinian Diaspora and Palestinian Authority
funds. The Palestine Development and Investment Company
(www.PADICO.com) is a $200 million holding firm with 12 subsidiaries. The
Arab Palestinian Investment Company (www.APIC-PAL.com) is a $100
million holding firm with 11 subsidiaries. The Palestinian Commercial
Services Company (www.PCSC-PALESTINE.com) is a $300 million
government owned private sector engaged holding firm. In total, these three
investment companies employ and feed over 20,000 Palestinian mouths. All
three of these companies, as well as many other smaller ones, still exist and
await an Israeli military withdrawal to pick up the pieces and continue to
build Palestine's economy, despite disastrous ramifications to their business
feasibility because of Israeli military and economic domination.
In addition to making available the investment funds necessary for state
building, these firms along with other locally active Palestinian economic
players recruited a mini-army of Palestinian Diaspora technocrats that were
employed to transfer the necessary knowledge to local businesses. Israel's
current aggression is clearly an attempt to scare them off and thus
implement a long-term Israeli strategy of 'voluntary transfer' - where
Palestinians leave Palestine on their own will, thus creating a third
Palestinian exodus: this time away from the media cameras.
One project waiting for the tanks to roll out of Ramallah so work can proceed
is the first chain of modern shopping plazas in the Palestinian Authority
areas. This is the company that I manage. The Arab Palestinian Shopping
Centers (APSC) broke ground for its first plaza in the Palestinian City of Al-
Bireh, 8 km North of Jerusalem, on April 1, 1999. April Fool's Day was a
coincidence but could not have been a better choice given the difficulties that
the firm has had to face.
On September 28, 2000, Israeli prime minister made his infamous and
provocative visit to desecrate Jerusalem's holiest Moslem site. On the same
day, APSC was being traded for the first time ever on the Palestine
Securities Exchange (www.P-S-E.com). I was in Tel Aviv that day at the
COMDEX Information Technology Exhibition. It was the first time ever that
the Palestinian information technology community, led by the Palestinian
Information Technology Association (www.pita-palestine.org), set up a wing
in an Israeli exhibition to show off the emerging Palestinian knowledge
industry - software firms, communication firms, research and development
firms and Internet firms. Those days proved to be yet another calendar
coincidence that had much more hidden than any of us could have imagined.
On September 29, 2000, the second Palestinian Intifada (Uprising) against
Israeli military occupation began.
Another project that I have had the honor of being involved with was the
founding of the first Palestinian private sector telecommunications company.
When the Palestinians took over their own telecommunications sector after
Oslo, it was a 400-person operation with an ailing infrastructure. Today, the
Palestine Telecommunications Company (www.PALTEL.net) is a blue chip
Palestinian firm employing over 2,000 Palestinian men and women who
operate a state-of-the-art network. It has turned a profit every year. Paltel,
too, is waiting for Israeli tanks to roll out of Palestinian towns to repair the
damage and move on toward statehood.
Over the last eight years the Palestinian Authority has been enthusiastically
preparing for industrial zones to be built on the border with Israel in hopes
that joint Israeli-Palestinian economic projects would help cement a lasting
peace. Palestinian President Yasir Arafat created an entire organization
within the Palestinian Authority to make this effort succeed, The Palestinian
Industrial Estates and Free Zones Authority (www.piefza.org). USAID
provided funding to start the capital-intensive development process and many
Palestinian private sector entities were aligned to realize the project. Today
many of these industrial estates lie in ruins, victims of Israeli tanks and
Many, including myself, warned the Palestinian Authority and Palestinian
private sector that premature linking of the emerging Palestinian economy
with the much more developed and politically motivated Israeli economy
would weaken any future political negotiations. Their reply was that Israeli
business concerns being involved with Palestinians would safeguard any
projects. Unfortunately their view has not been borne out. Today, Israeli
foreign minister Shimon Peres, who was a leading voice promoting
Palestinians to link their economy with Israel and Israeli investors, is now
openly part of the Israeli leadership that is systematically destroying, not
only the Palestinian economy, but everything that was accomplished since
Palestinian President Yasir Arafat signed on the dotted line on the White
House lawn in 1993.
Any resolution to the current impasse short of a full end to all forms of the
illegal Israeli occupation and the creation of a viable Palestinian state allows
Israel to maintain the facet handles on Palestinian economic development.
This time around, however, Palestinian business leaders will not have any
illusions about the motivations of their Israeli neighbors.
Before relocating to Al-Bireh Palestine from Youngstown Ohio, I hung in my
office a poster from an unknown author. The current business environment in
the West Bank, Gaza Strip and East Jerusalem has led me to recreate the
poster and hang it once again, this time with a surreal sense of reality. It
reads, "Build for Eternity and Be Ready to Move in 24 Hours." With its
remarkable capacity for regeneration, the Palestinian business community
has done just that.
April 9, 2002
The writer is a Palestinian-American information and communications
technology consultant (www.AIM-PALESTINE.com) and General Manager of
the Arab Palestinian Shopping Centers (www.apic-pal.com/html/news.html)
being built in the besieged City of Al-Bireh/Ramallah. He can be reached at
email@example.com. Also, please note that some websites mentioned in
this article have been disabled by the Israeli military and will be operational
again upon the Israeli withdrawal.