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Sat 6 Jan 2018 10:29 AM

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Palestine: Business beyond the wall

Jerusalem might be in the news again, but the impact of the occupation of the West Bank and Gaza on daily life rarely makes the headlines. Palestinians, though, have long proved they can conduct business in the toughest of environments

Palestine: Business beyond the wall
One project that is meant to attract investment to the region is the newly built $1.4bn Rawabi city (which means “hills” in Arabic), located in the West Bank, north of Ramallah.

Palestine has an economy. There are many opportunities, just like any other country. Despite the challenges, life goes on. There are people living here. There is life in Palestine.”

It’s often easy for outsiders to overlook Samer Al Sharif’s description of the territories under occupation for the last 50 years, where a people rendered stateless since the 1967 Six-Day War have been fighting for self-determination on shrinking portions of land in the West Bank, the Gaza Strip and the increasingly isolated East Jerusalem.

Life in general and commerce in particular are subject to checkpoints and permits, impassable roads and curfews, army incursions and, of course, the concrete wall that snakes its way deep into land owned and farmed by Palestinians. In Gaza, two million people live in a sliver of land 40km long and five to 11km wide. As for the West Bank, 60 percent remains inaccessible to Palestinians.

Amid the ongoing challenges, the political landscape can shift in moments. The recent decision by US President Donald Trump to recognise Jerusalem as Israel’s capital threatens the territory’s stability. The UN considers the move illegal, constituting a recognition of the annexation of the eastern part of the city captured from Jordan in 1967, as well as being opposed to the spirit of the Oslo Accords, in which the city’s future could only be determined by bilateral negotiation.

The Ruwwad initiative mentors young entrepreneurs

“Corporations are afraid that the political situation could be going through a rough time and they believe it will have an effect on planning their businesses,” says Murad Tahboub, partner and managing director at West Bank firm ASAL Technologies. But he argues that business on the ground has not yet been affected by the decision. “Maybe the retail side has suffered due to disturbances and protests against Trump, but on a corporate level the industry is the same,” he says.

Working around the problems
Conducting business in these circumstances, whether exporting goods or accessing natural resources such as the water aquifers, remains extremely complex, not least with a political situation that discourages investors. But businesses still find a way to prosper; from farms that rely on crops that need little water such as olives and almonds, to small banks that support small- and medium-sized enterprises, and a growing tech sector that uses the internet – a means of communication Israel has yet to find a way to curtail.

It is one of Samer Al Sharif’s jobs to help set up some of these businesses. He is a project manager at non-profit, private-sector empowerment initiative Ruwwad (Arabic for “pioneers”), which was established by Aramex founder and venture capitalist Fadi Ghandour. The organisation, which focuses on assisting disenfranchised communities in Palestine, Jordan, Lebanon and Egypt, engages 65 youngsters every year through education scholarship funds in exchange for community service hours, equipping them with the right skills to ultimately find jobs or launch start-ups.

Despite the challenges, life in Palestine remains vibrant

It runs its programmes in four villages with high rates of youth unemployment: Qibya, Shiqba, Ni’lin and Der Qiddis, all located in the Zone C, the area of the West Bank most heavily interlaced with settlement blocs and, as such, where many families have lost land and businesses. According to the Palestinian Central Bureau of Statistics, unemployment in the West Bank stood at 18 percent in 2016. The figure is much higher in Gaza, where it is closer to 42 percent, while unemployment among young people is a worrying 58 percent. Furthermore, the average daily wage for workers in the West Bank was $25 compared to just $15 in the Gaza Strip.

Al Sharif worries about the long-term effect of the occupation on the next generation of Palestinians. “It pushes them to travel outside, and they can’t plan for a future unless they accept Israeli policies, such as starting a company within the Israeli financial market or economy,” he says.

Daily routines are also severely restricted, and movement is the biggest issue. Thanks to numerous checkpoints, journeys that would normally take 20 minutes extend beyond an hour. “Most of the time, I don’t know how long I’ll spend at a checkpoint. Sometimes they hold you for 10 minutes, sometimes for an hour, sometimes longer,” he says.

It is these logistical issues that prevent businesses from working within the area. One of them is Dubai-based fashion label Palestyle, which employs Palestinian women in refugee camps in Jordan and Lebanon to create embroidered designs for luxury bags. Co-founder Ahmed Abou Chaaban, originally Palestinian, says exporting products from Palestine is “almost impossible”.

Roadblocks, checkpoints and settler-only roads create logistical challenges

“We don’t operate in Palestine purely for logistical reasons. It’s very difficult to pay women in Palestine, and we have to be careful that every charity we work with is legitimate. We have to be onsite. And we can’t do that,” he says.

Abou Chaaban, along with his sister Zeina, has found other ways to give back to his homeland. One of them includes a project with the Arab Group for the Protection of Nature, where they plant an olive tree with every Palestyle Glam clutch sold. With the help of Bloomingdale’s in Dubai, it has sold 200 clutches, which has helped provide more than 300 jobs, as well as an olive harvest to create additional income.

Tech to the rescue
According to ASAL Technologies’ Murad Tahboub, the technology sector is one of the most promising in the local economy because it is the most resilient to politics. “All you need is a telephone line and electricity, and we always have those. Despite the situation, we can deliver. We can get clients’ needs in delivery times and also innovate and create our own IT products and services that would put Palestine on the global high-tech radar,” he says.

ASAL Technologies is the largest software developer in the territories, with services ranging from software development to outsourcing. But Tahboub says it is not enough. While thousands of high tech engineers graduate from 11 universities in the territories each year, only 40 to 50 percent are recruited into their sector, while the others work in different fields or remain unemployed.

Agriculture is a key part of the Palestinian economy

“These young, talented engineers are an under-utilised national asset,” he insists. “We need to engage them with the international market. Our company has been working with Microsoft, Cisco, Volvo, and has proved that Palestinian engineers are in the calibre of the international market and are capable of handling large-scale projects and high-tech tasks.”

His solution? Bringing regional Arab investment to Palestine. “It is something that should be done. It has nothing to do with the political situation. It is a matter of doing business and also, helping your Arab colleagues,” Tahboub says.

According to Tahboub, Palestine is a good investment due to its immature market and lack of competition. While challenges arise due to restrictions, which he concedes make business much more difficult, he insists many Arabs and foreigners who put their money into Palestine get good returns on investment.

But he argues that business in the territories has a more important silver lining. “You get good returns, but you also do good socially. You can do business all around the world, but you can do business and do something good for the region in Palestine,” he says.

Entrepreneurship new and established: Ahmed Abou Chaaban

He also encourages young Palestinians to remain in the area. “There is hope in Palestine and there is potential. If we can create our own products and services, be able to connect to the Arab and international world by exporting some of those products and services, there is a lot of room for improvement.”

New horizons
One project that is meant to attract investment to the region is the newly built $1.4bn Rawabi city (which means “hills” in Arabic), located in the West Bank, north of Ramallah. Planned by Palestinian-American developer Bashar Masri, it took 10 years to construct thanks to Israeli restrictions and criticism from Palestinians, who argued the complex is aimed at privileged Palestinians living abroad and out of reach for those living in the territories, where poverty remains widespread.

So far, it constitutes wide boulevards, international fashion brands, a sports centre, a 15,000 seat Roman-style amphitheatre and a cinema under construction. While only 3,000 people currently reside in city, the first built by Palestinians in the area, it is hoped that 40,000 residents will eventually move in.

Despite facing backlash, Masri argues there is demand for the apartments, which range in price from $70,000 to $180,000. “Who decides what Palestinians want? Is it the occupation? The world? We decide for ourselves what we want and not all of us want the same thing. Palestinians deserve a better life. We should not be oppressed because we live under occupation,” he says, adding that while he cannot guarantee it will make money, he is content with the fact that building cities such as Rawabi can help empower Palestinians as they fight to have a state of their own.

Entrepreneurship new and established: Munib Al Masri

Industrialist Munib Al Masri, Bashar’s uncle, and widely regarded as the richest man in Palestine with an estimated net worth of $1.5bn, has a similar vision for the state-in-waiting. The businessman has built a number of manufacturing, agricultural and telecom companies through the Palestinian Development and Investment Company (PADIC) and also founded the highly successful Jordan-based oil services and contracting firm Engineering and Development Group (EDGO).

In more recent years, Al Masri has dedicated most of his time to advocating unity among Palestinians, who follow one of either governing authorities Hamas in Gaza and Fatah in the West Bank. The most vital key to an economically prosperous Palestine is unity, he says.

“We have the same cause, the right cause, and we have been fighting for it through 50 years of occupation. This is the most important thing,” he says. But Al Masri is also urging Arabs across the region to help the struggling nation. “You have to understand that the Palestinians are very resilient people and they can be businessmen, even under the toughest of situations. Palestinians in the West Bank and Gaza are living in a prison, but you see them starting businesses. They know how to deal with the pressure. They learn methods under pressure.

“We are fighting for independence and we have proven we can survive through anything,” he continues. “We need to work with other countries to convince them that Palestine is a good investment. We do not have a magic stick to orchestrate this, but we have plans, and we are ready.”

Accelerators and venture capitalists in Palestine

Gaza Sky Geeks (GSG)
This was launched in 2011 in collaboration with Google and international NGO Mercy Corps to help entrepreneurs establish start-ups, mostly in high-tech industries. It also acts as a platform for freelancers to learn, innovate and share ideas.

Sadara Ventures
Founded by former Microsoft engineer Saed Nashef, this initiative also targets the tech sector and is backed by the likes of Cisco, the Google Foundation and the European Investment Fund. It finances six companies including online booking website Yamsafer.

Meaning “innovation” in Arabic, Ibtikar is a fund that invests in early stage start-ups, beginning at seed level and continuing into series A investments. Its aim is to close the critical funding gap between acceleration, VC and other later-stage investors.

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