An avenue worth pursuing

An interesting exchange took place over the past couple of weeks on the pages of the financial daily Globes.

An Israeli businessman called to establish a free-trade zone along the border with Gaza. A Palestinian businessman followed up by saying that Hamas would look positively on such an initiative and a Hamas official indeed gave cautious approval for the initiative – albeit without referring to it directly or mentioning Israel by name.

In an interview with Globes, Shlomi Fogel, chairman of the Ampa Capital holding company and chairman and CEO of Israel Shipyards, said that for some time he has been studying with Israeli, Jordanian, Egyptian, Palestinian and Gazan businessmen the possibility of setting up industrial zones and free trade areas along the Israel-Gaza border.

In response to that interview, a Gazan businessmen, Nabil Bouab, was also interviewed by Globes and said that Hamas, reeling under the pressure of the world’s highest unemployment rate and with a GDP per capita among the world’s lowest, would support such an initiative.

Just over a week later, Globes quoted Hamas Deputy Economic Minister Hatem Owida as making a guarded statement that seemed to come out in favor of the initiative. “The Ministry of Economy supports the efforts being made by some businesspeople to attract investments and develop the economy of the Gaza Strip, especially in the area of setting up industrial zones and trade incentives,” Owida reportedly said.

It isn’t the first time such an initiative has been floated and industrial zones existed along the Gaza border in the past, opening to much fanfare and great hope after the Oslo Accords, but closing intermittently amid the violence of the second intifada and remaining firmly shut after Hamas took over the Strip in 2007.

So what’s different now and why is Gaza’s economy Israel’s problem? With Gaza’s economy in ruins after three wars with Israel since Hamas came to power and years of blockade by Israel and Egypt, even Hamas realizes it has to make changes that will reduce the poverty and suffering of Gaza’s residents.

Militarily, Hamas appears deterred, for the moment at least; the past two years have been among the quietest in a long time along the border region. While it would be naive to presume that Hamas has changed its creed, an ameliorated economic situation and grassroots pressure from the tens of thousands of Gazans who would work in the zones could help maintain quiet.

As Nabil Bouab puts it: “I want there to be peace, because my interests depend on peace and quiet. I have no control over a 22-year-old person who has no hope and not a single shekel in his pocket. That’s explosive material. Why shouldn’t we have another tens of thousands of people whose interest depends on keeping the peace? There is no security without an economy.”

Fogel is not naive – he doesn’t expect Israel to engage in direct talks with Hamas. He also isn’t just spouting empty words, but is willing to put his money where his mouth is.

He already runs a free-trade zone in Jordan that employs hundreds and says that his Arab contacts would be willing to invest in the Gaza project.

What Fogel understands is that right now, business-to-business can achieve a lot more than government- to-government, that with nothing to lose Gaza will explode again and that probably the only way to defuse that ticking bomb is through economic development.

He also understands that for Israel, all there is to lose is money.

This part of the world needs more of that kind of out-of-the-box thinking, not more zero-sum conflict where everybody is a loser. The alternative is endless rounds of violence and perhaps, as Defense Minister Avigdor Liberman suggests, toppling Hamas. The risks and costs of that plan of action will be far higher.