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Thoughts on IMEMC Article “Study Shows Palestinian Businessmen Invested $2.5 B In Israeli Settlements In 2010”

Posted in Palestinian Situation with tags , , , , , on November 21, 2011 by miragabi

Few friends have been sharing this article on Facebook today. while seemingly alarming (it kinda is) here are some thoughts (below the article).

Study Shows Palestinian Businessmen Invested $2.5 B In Israeli Settlements In 2010

http://www.imemc.org/article/62529

Saturday November 19, 2011 05:44 by Saed Bannoura – IMEMC & Agencies

An academic study conducted by a Palestinian researcher from the West Bank city of Bethlehem, revealed that the amount of investments by Palestinian businessmen in Israeli settlements and in Israel itself, amounted to $2.5 Billion in 2010.

Palestinian PM Salaam Fayyad Burning Settlement Prodcuts - Image Arabs48

The study was conducted by Issa Smeirat, 43, as part of his M.A Degree. This is the first study of its kind, and its results surprised Palestinian and Israeli officials, Israeli Daily, Haaretz, reported.

Haaretz said that should these investments have been conducted in the West Bank, they could have created at least 213,000 jobs.

According to the study over 16,000 Palestinian businessmen from the West Bank, who hold permanent permits from Israel to enter the country, established businesses and firms inside Israel and its settlements. This includes establishing several factories and companies, many of which have numerous branches, all paying taxes to Israel.

Smeirat also studied the motives that pushed those Palestinian investors to invest in Israel and its illegal settlements, especially since the issue is very sensitive and more Palestinian organizations, activists and officials are calling for boycotting of Israel and its settlement products.

Talking to Haaretz, the researcher said that the sensitivity of this issue prevents the publishing of the identities of the investors, adding that while conducting his research, the Palestinian National Economy Ministry in the West Bank -the same ministry that launched the campaign to boycott settlement products- stated that the Paris Agreement does not prohibit investing in settlements.

He was referring to the Protocol on Economic Relations, which came as an annex to the Gaza-Jericho Agreement, the first peace agreement signed between Israel and the Palestinian Liberation Organization on May 4 1994.

The agreement incorporated the relations between the two parties, and was then incorporated and suppressed by Oslo II Agreement, and became known as the Interim Agreement on the West Bank and the Gaza Strip of 24 and 28 September 1995.

The study by Smeirat was presented at the end of this past summer at the Al-Quds University. He obtained detailed information from Palestinian Commerce and Industry Offices about Palestinian investors in Israel and its settlements.

He managed to contact 540 investors, and distributed 420 surveys to others, but only 374 of them filled in and returned the surveys. He also managed to conduct face-to-face interviews with over one-hundred investors.

His study revealed that most of the investors are fluent in Hebrew, and more than half of them are aged forty years or more. This shows that those businessmen worked in Israel before it began closing its borders to the Palestinians in the early nineties.

Approximately 23% of them worked as labourers in Israel before they established their firms and businesses, less than 1% of them speak no Hebrew.

One-fifth of the investors stated that their businesses are in Israel, Israeli settlements, the West Bank and abroad, while another one-fifth said that their investments are only in Israel and its settlements.

Approximately 90% of them said that their first ever experience in investments was conducted in Israel.

The researcher said that he believes that the main motive that encourages Palestinian investors to invest in Israel and its settlements is attributed to the limited capacity of Palestinian investments, especially since Israel controls 60% of the occupied West Bank. They also control most natural resources, especially water, in addition to Israel’s restrictions on the freedom of movement of the people and the goods, especially since its controls all border terminals in the West Bank, and has closed Israeli markets to Palestinian products.

The Israeli restrictions caused a sharp increase in production costs in the West Bank, comparing to production costs in Israel.

This is besides the sharp increases in prices of Palestinian lands (for sale and for lease), and the increase in the costs of water, power, and not to mention the lengthy wait that investors have to bear when importing raw materials. These factors increase cost production by approximately 30%.

The capital of 16,000 Palestinian investors in the Palestinian Authority areas are distributed as the following: 3,300 investors in Hebron; 3,100 in Ramallah; 3,000 in Nablus; 2,000 in Bethlehem; and 1,000 in Nablus.

Palestinian investments, according to Smeirat, are around 7 Billion U.S. Dollars; approximately $5 Billion of these investments are not in Israel and its settlements, as they are mainly invested abroad, either in projects or stocks, an issue that poses a significant challenge to investment opportunities within the West Bank.

Now I am not the best in economics but here are some observations;

First of all I dont think there exists a merchant or businessman in the whole of historical Palestine that doesnt deal directly or indirectly with Israeli authorities/businesses/investors, mediators -or they call mukhaliseen – At the end of the day everything that enters our market goes through them and we pay taxes and shit and Israeli border control/customs/port authorities they all benefit from this .. think how many Israeli stations/ stops each product has to go through before they get to the Palestinian market.
Our Palestinian economy as you know is FAR far from being even remotely independent .. but here I am more curious to understand those results in much more details than just those brief conclusions and numbers because when they say “investor” they make it sound as if its someone who has a significant capital and wants to make profit out of this capital by choosing to invest in some project or another. I personally have a hard time believing that its the case especially when they talk about 3300 in hebron , 3000 ramallah , 3000 in nablus ..etc etc. ya3ni if its such big numbers of investors then our economy would look completely different .. other than shops & services I rarely ever see in Nablus, I tend to think that this might include even owners of small businesses esp when they say many of those are people who were workers in Israel .. ya3ni frankly who are the workers in Israel ? they are among the poorest or some of the poorer people in our society ..so when one of those manages to save some money to start a project or invest in some project then not sure how big can it be? Therefore its interesting more to see the nature of those investments or “investors “.
Not to defend anyone because of course there are many greedy people who dont care about anything other than making money but in principle (and I am thinking of the several investment conferences that Fayyad organized in the west bank esp. Bethlehem in the last couple of years – most of the time didnt result in anything) even Palestinian really rich businessmen who live abroad fear to invest inside why because the first rule for any investment is to have stability and ability to sustain & expand in our case this doesnt exist and obviously Israel doesnt give permits even for factories or anything in B & C so this leaves only A areas that might be able to host such businesses/ industrial establishments. The question is to what extent is there a capacity for that in A areas? in this case the alternative -and the Israelis got it right here – is to invest in Israeli areas .. makes a lot of sense economically but politically bashes any effort to divest or disengage from Israeli economy but hey isnt the case anyhow?!

In my very opinion this is SO related to a discussion I recently had with some friends on how having the choice to boycott or to divest comes from a position of privalage because in actuality often times in Palestine we dont have that possibility and we are ” normalizing ” even when we dont want to , when we turn the light on we are .. when we demand our stolen water we are , when we buy fruits & vegetables we kinda are  .. So Israel perhaps figured that a PA & end of military administrations inside of Palestinian cities and replacing them with ministries & Palestinian DCO’s kinda changes the value of  what a civil disobedience movement  could look like ..

sorry for the bad writing .. tired :S