Afternoon Tea in Jerusalem Blog

Life in Israel

tea
Israeli commercial life and society

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.

Search

Subscribe via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Archives

Palestinian economy; and the good news is…….

The World Bank’s latest report on the Palestinian economy points describes 2% growth rate in Gaza, trying to support an unemployment rate of over 40%. Clearly this is unsustainable. What can be done?

The recent moves of reconciliation between Hamas and  the Palestinian Authority (PA) offer some hope. According to Doron Peskin from Concordmena, The agreement should lead to an extra US$165 m of support from the UAE. This will be in addition to the current annual payments of:

  • US$140 m from Iran
  • US$120m from the PA, primarily for salaries and electricity
  • US$100m from Qatar
  • US$50m from Turkey

Tax revenues are rarely revealed but Hamas leaders clearly find a way to finance their own lavish life styles, assumedly from willing local contributions.

Clearly all of these amounts are fickle. For example, the UAE contribution is apparently dependent on former Gaza bully and aspiring successor to President Abbas, Mohammed Dahlan, being handed some level of power in the territory. So, what other revenue sources can emerge?

One possibility is the extraction of the estimated 32 billion cubic meters of national gas just off its coast line. There are rumours that an agreement has been signed with a Greek developer and a contractor called CCC. However, concrete details remain sketchy.

A second source of relief could come from “impact investing“. For example:

A project to produce tablets for schoolchildren and their parents, a company that reduces the need for pesticides, an IT development centre in a crisis-ridden location and a bond to fight type 2 diabetes….They are all cited by investors and entrepreneurs as examples of impact investments in Israel and the Palestinian territories.

Yet again, the question remains if political stability will allow enough such entrepreneurs to come forth? There are already reports of the PA arresting Hamas representatives.

Another angle could be a hoped for relaxation of central control of the Palestinian economy. One small indication of change is entrance of a second mobile provider in Gaza. The hope is that prices will drop, service will improve, and thus improved corporate taxation will allow the exchequer to benefit.

The reality is that Gaza needs open borders with its neighbours. This is unlikely to happen so long as Hamas considers Israel to be a pariah state and wages war against it. This policy was most clearly indicated last week, when the Israeli army destroyed a tunnel from Gaza. Those Palestinian soldiers killed had crossed the border, underground. (It should also be noted that it takes considerable investment and raw materials to construct such tunnels.)

The unfortunate bottom line is that the Palestinian leaderships can always blame Israel for their woes. With a willing international community and a supportive set of UN institutions, this stance absolves them from any form of responsibility. Hoorah!

And meanwhile most people in Gaza will continue to be dependent on handouts.

Comments (0)

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>