Economic Peace: It’s just business...and personal

A growing number of bold Palestinian entrepreneurs are willing to do business with Israel – but not out in the open.

By RON FRIEDMAN
August 13, 2010 16:25
EIVAL GILADY

EIVAL GILADY 311. (photo credit: Courtesy)

On Monday morning a group of Israeli businessmen gathered at the Dan Panorama hotel in Tel Aviv to have breakfast and hear a lecture by a prominent Palestinian business leader with political aspirations. The meeting was hosted by the Israeli-Palestinian chambers of commerce and the lecture was about investment opportunities in a major Palestinian city.

Though he was confident enough to hold a lecture before an Israeli audience, the speaker refused to be interviewed by The Jerusalem Post, fearing that exposure in the Israeli media would harm him politically. He also refused to have his name or city of residence published.

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Though nothing that was said in the address was particularly novel or controversial, for the most part the speaker spoke about “the difficulties of doing business under the Israeli occupation” and boasted about the high quality of university graduates in his city and a handful of new initiatives promoted by the Palestinian Authority.

The forum for the lecture, the Israeli-Palestinian Chambers of Commerce (IPCC), was established in October 2008 as a non-profit NGO by leading Israeli business people and economic organizations who sought to enhance bilateral trade and investments between Israel and the Palestinian Authority. According to Eival Gilady, the IPCC’s chairman and a retired Brigadier General, business ties between Israelis and Palestinians exist and have even strengthened in the recent months, but there is a major fear on the Palestinian street of exposing those ties publicly – a fear of the appearance of normal ties between the two sides.

“I think the fear exists on two levels.

On one hand there are those who avoid doing business with Israelis so they don’t appear to be collaborating with the occupation.

But there is another level, which goes undeclared, but which I identify, which is people who don’t fear to do business, but fear to be exposed as doing so,” said Gilady.



“With time we have come to respect that attitude. In the beginning it was really important for us to highlight our achievements, but we came to realize that it was more important for accomplishments to happen than for us to be able to tell the world about them. If the cost is letting them operate on a low profile, without them having to pay a price for their exposure, we are willing to sacrifice the publicity in favor of actual progress.”

Under the radar, the IPCC, together with its parent bodies, the Peres Center for Peace and the Portland Trust, of which Gilady is the CEO, has been hard at work at creating opportunities for greater cooperation between Israeli and Palestinian business people.

“We believe that it is in our interest that the Palestinian economy function in a proper fashion, that normal daily routines become entrenched, that people wake up in the morning, send their children to school and go to work and earn a decent income.

This is an interest that serves both the economical and security interests of Israel,” said Gilady. “I don’t fear competition. If anybody tells you that Palestinian success threatens Israel, it’s ridiculous. The Palestinian economy is about four percent of the size of the Israeli economy. We are a giant economy compared to them.”

THE ACTIVITIES of the IPCC include identifying likely investors for Palestinian companies, bringing business people together to create cooperations and solving specific problems that come up with the authorities on both sides.

According to Gilady, there is no national Palestinian- Israeli Chambers of Commerce on the other side for the IPCC to work with, and the IPCC works with local or regional chambers of commerce instead. “We have ties with the chambers of commerce of Ramallah, Hebron or Jenin, but as of yet no national body has been formed,” he said. “I do believe that such an agency will be created in the future and have discussed it with Palestinian Prime Minister Fayyad, but we are waiting for the conditions to ripen. The hesitancy, as far as I can tell, is due to fear on the Palestinian side that such a move will play into the hands of Prime Minister Netanyahu’s initiative for economic peace, which they see as a way of avoiding progress on the political front.”

The fact that Palestinians do business with Israelis is unavoidable. Israel is the Palestinian Authority’s largest trade partner. Palestinians import roughly $3 billion worth of Israeli goods and export $400 million worth of goods to Israel every year. “Without Israel, the Palestinian economy would crumble. I’d like to see all those who say we should not do business with Israel survive for one day if the borders were to be closed off,” said ‘K’, a Palestinian businessman who deals in manufactured goods. “On any given day, if you go to the market neighborhood in Tel Aviv, you will see hundreds of Palestinian merchants offloading goods. Everybody works with Israelis. Everybody knows that people work with Israelis only some talk about it and some don’t. But even those who don’t talk about it, you can be sure that their family, their neighbors and their customers know about it.”

‘K’ said that in the past few decades he has seen ups and downs in the business ties between Palestinians and Israelis, but that through it all, the goods have gone through. “In Gaza there is virtually no choice but to work with Israelis. Palestinians there are totally dependent on Israelis. In the West Bank they are at least partially self sufficient, in Gaza that is not an option,” said ‘K’.

According to ‘K’, Gaza merchants are even dependent on Israel for imported goods.

“Because of the situation in Gaza, it is better for merchants to buy the goods from Israeli importers and pay the extra fees, than attempt to import the goods themselves.

Chances are good that the shipments will get stuck at the port for months or even years.”

“People know that I do business with Israelis, but so far nobody has said anything critical about it to me. In truth, it is impossible to try and hide it and therefore pointless. I go to Israel for a few days every month and have never been refused a travel permit either by the Israelis or the Palestinians.

On the surface, there is pressure by the government to restrict business dealings.

The government wants to present itself as being strong and self-sufficient, but it’s all political. If the borders were closed tomorrow, everybody would be shouting for help,” said ‘K’.

Yoav Stern, Director of the Business & Economics Department at the Peres Center for Peace, said that the attitude towards doing business with Israel varied depending on the industry.

“In the hi-tech sector for example, it is considered politically incorrect for Palestinians to do business with Israelis. In other sectors however, the links are unavoidable and less emphasis is stressed on preventing business ties.”

Both Stern and Gilady said that they had recently identified a new trend of boldness and openness among Palestinian businessmen, people that are pragmatic enough to realize that in order to advance economically the Palestinians will need to continue to cooperate with Israel and proud to be taking part in the national effort towards independence.

“Palestinian business people tell me that if, up until a few years ago, they didn’t want to expose their business ties because of the negative picture it paints; after all how could they continue to do business and prosper while there are people living in refugee camps, today they realize that in order to establish a sustainable state, a prospering business sector is required. They realize that the business they do is not only legal and proper, but that it also serves Palestinian society,” said Gilady.


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