Afternoon Tea in Jerusalem Blog

In addition to my work as a business coach, one of my interests is blogging about life in Israel. This is a country full of contrasts – over eight million citizens living in an area the size of Wales. You can see snow and the lowest place on the globe in the same day. Although surrounded by geopolitical extremes, Israel has achieved a decade of high economic growth. My work brings me in contact with an array of new companies, exciting technologies and dynamic characters. Sitting back with a relaxing cup of strong tea (with milk), you realise just how much there is to appreciate in the Holyland. Large or small operations, private sector or non profit, my clients provide experiences from which others can learn and benefit.

So the Palestinians and the Israelis are due to meet today in Washington to begin talks about talks.

One of the issues that always annoys me is the way the Palestinian economy is reported and analysed. The standard retort is that the economy is in a mess – eg unemployment at over 25% – because of Israeli restrictions on the freedom of movement.

Well that specific stat is agreed upon by most sources. And it cannot be denied that Israeli security measures by definition must inhibit economic development. However, there is a flip side. For example, before the violence of the Intifada and up to 1999, the World Bank has stated that Palestinian economy grew by 5.5% annually for over two decades. And what about the implications of the violence on the Israeli side, which demands that resources are directed towards defence rather than structural growth?

So,let’s try to move away from the spin and the meaningless of politically correct statements. I often like to hear what Palestinians are saying about their own economy.

Last week, the Palestinian Monetary Authority released the latest figures on the state of the business environment. “In general, the overall index indicates that recovery in economic activity that took place during the past months of 2013 was back on the track in July, as a result of improvement in some industrial sectors such as food industries (index increased from 0.37 to 1.97) and furniture (from 0.24 to 1.75).”

The figures were especially encouraging for the West Bank region. It can be no coincidence that the Swedish furniture multinational, IKEA, has confirmed that it is holding discussions to open a new outlet in Ramallah in the coming year.

Despite the hypocritical howls of the BDS movement, cooperation with Israeli authorities continues. One notable example is the annual seminar held for farmers from Gaza. This year, around 50 people attended. Last month, a new industrial complex was inaugurated in Jericho with the open support of Israel, Jordan and Japan. And there is increasing speculation that discoveries of energy resources in the Eastern Mediterranean and its forthcoming development will also bring the two sides together.

The down side at the moment for the Palestinian economy can be traced to events in Egypt. Seasoned Middle East observer Tom Gross cites a report from AP from 24th July. “Egypt’s new government has imposed the toughest border restrictions on the Hamas-run Gaza Strip in years, sealing smuggling tunnels, blocking most passenger traffic and causing millions of dollars in economic losses.”

This was not a one-off comment. Egypt controls around 70% of the power supply into Gaza. And Al-Monitor headlined that Gaza fishermen can no longer ship out into Egyptian waters, which will have a clear negative impact on a major local industry. Gross observes these are blatant restrictions of economic movement, but there is no international outcry. Why?

So what does this all this mean for Mr Kerry has he brings the two sides together over a very wide negotiating table?

As these pictures illustrate (even if I do no agree with the flavour of the website), there are many aspects of affluence in the Palestinian territories. However, the population as a whole deserves better. And here’s the catch.

Instead of blaming Israel for their poverty, Palestinians can do more to resolve their own issues. A simple but obvious start would be to divert their limited resources from activities which generate hatred against Israel. They can be moved towards fostering internal structural growth for the civilian population.

The question remains if this potential of increased economic wealth for the Palestinians is a priority for their own leadership during the peace process?

1 comments

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