Economic hopes were boosted by this week’s Palestine Investment Conference
The Palestinian Authority this week attempted to defy sceptics by presenting the West Bank as a land of business opportunity during a three-day investment conference in Bethlehem aimed at giving an international boost to the moribund economy.
“You don’t have to be crazy” to invest in the Palestinian private sector, said Mohammed Shtayyeh, director of the Palestinian Economic Council for
Development and Reconstruction.
And this is despite World Bank forecasts of zero economic growth in the West Bank in real terms during 2008; the division between Gaza and the West Bank; and PA President Mahmoud Abbas’s warnings that Israeli and Palestinian negotiators are still far from an agreement.
The main factor in the gloomy forecast are Israeli checkpoints and movement restrictions, which Israel says are needed to thwart Palestinian attacks.
“We don’t deny the fact that we are under occupation, that there are 612 military checkpoints, that we can’t reach Jerusalem, that Gaza is under siege and that the situation is unusual,” Mr Shtayyeh said. “But business itself is unusual. There can be business in very unusual situations.
“There are people who can make money out of war and people who can make money out of peace and I am sure there are people who can make money out of our situation,” he added. He said he expected property and telecommunications to be the sectors that elicited the most interest at the three-day meeting that began on Wednesday, attended by hundreds of businessmen and representatives of 15 countries.
Israeli foreign ministry spokesman Arye Mekel called the conference “a positive development. We hope it will succeed.”
Khaled Osaily, the mayor of Hebron, said that the projects for which he hoped to elicit investment included an industrial zone south of the city and Hebron’s first multi-storey car park.
He characterised the local economy as being “filled with threats and opportunities”. The Palestinians, he said, can offer foreign investors relatively cheap salary costs for well-educated employees.
“Employing a newly graduated engineer will cost less than a quarter here compared with the US and Europe,” he said, adding that companies should think about getting a foothold now to be in place when a peace agreement with Israel is reached.
But Samir Barghouthi, director of the Ramallah-based Arab Centre for Economic Development, cited recent reports of Palestinian Authority president Mahmoud Abbas threatening to resign within six months and the Israeli strictures on movement of goods and people as making it difficult to persuade people to invest.
“Businessmen may come to the conference and give promises and good speeches, but when they return home they probably will look at the situation and decide it is too difficult,” he said. He cited the example of the Qatari-owned Wataniya Telecommunications Company, which has been poised since March 2007 to invest $600m (£300m) to become the second Palestinian mobile-phone company, but has been unable to launch because of a delay in Israel granting the frequencies it needs. Israeli officials have said there were differences over how much spectrum to grant the Palestinians.
The international peacemaking quartet’s envoy, Tony Blair, said last week that Israel had agreed to grant the frequencies. But Wataniya CEO Alan Richardson said he was waiting for confirmation of this in writing.
How Palestine's economy is growing
A NEW TOWN
5,000 houses are planned in the new town of Rawabi, to accommodate 25,000 people. They will be priced at $40-80k. From a $300m investment.
The Palestine Investment Fund has launched a $1.5 bn scheme to provide 30,000 homes for low- and middle-income families over the next five years.
Guest stays in the PA’s 82 hotels doubled from 2006 to 07. Some 10,000 new hotel rooms are planned in E Jerusalem, Bethlehem and Jericho over three years, worth £300m.