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Over 30 years in Israel, but this Gaza war………

30 July 2014
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Categories: Afternoon Tea in Jerusalem, Israel, Jerusalem, Palestinians

I have been living in Israel since 1982. I write about Israeli society and the economy. For all the battles and bloodshed, I never seen a war like this one in Gaza.

I live in a country, where nobody agrees on anything. Nearly 80% Jewish, there is an old Yiddish joke – in a conversation with 2 Jews, there will be 3 opinions. There are frequently demonstrations against government policies – any government, on any policy. Even now, the army has called the fight with Hamas “Operation Protective Edge” while the Israeli media labels it a war.

But this war…….Surveys reveal that 90% of the public supports it fully. Talk to just about anyone and they are saying the same thing. Despite the heavy price of soldiers’ lives, the hit on the economy, the roaring uncertainty of Kassam missiles, Israelis are in favour (for now) of continuing the fight.

In over three decades, I have never seen such a commitment to unity and for so long. What has changed? How can this be explained to an outsider, who is primarily exposed to the harrowing pictures from CNN, BBC and SKY?

Israelis do not ignore the fact that Gaza is such a tiny strip of sand. I have read off-line witness accounts from journalists, and I am sure they are not exaggerating about the amount of destruction left after the fighting. The near constant Israeli gunfire must be horrendous to live with. Whatever the numbers, and we know they are exaggerated, even one innocent killed is one too many.

So what is it that unifies the Israeli consensus? Why does Israel, which sends aid to the Philippines, Haiti and to elsewhere, find itself going to war? Why should this country sacrifice tens of its best youngsters in the army? Why does my client plead in front of his bank manager as clientele are staying at home, yet he is in favour of the war?

Please understand that the answer does not lie in some hatred of Palestinians. I long for the days when I used to buy in Bethlehem. Neither is it because of some subconscious militaristic drive in Israelis. Our neighbourhood alone is replete with parents petrified about what is happening to their beloved ones at the front. And while I am no big fan of our Prime Minister, I refuse to accept the pathetic accusations how he has launched a personal crusade for future glory.

Four very obvious buttons have been pressed at once, which the mega media channels, Ms S Gomez, Mr M Ali, Ms P Cruz  and other celebs prefer to ignore, for all their state of politically correct ignorance

First – Hamas war crimes will no longer be accepted by Israel: Since Israel left Gaza in 2005, Hamas and its allies have launched thousands of rockets against civilian populations centres in Israel. If the US, UK et al can send troops to Afghanistan and Iraq, Israel has a right to defend itself militarily, and that includes from within Gaza.

To put it bluntly, Hamas built a network of tunnels, deep into Israel, designed to attack, maim, kill, kidnap and destroy. Which country in the world would accept that from a neighbour without a military response? No more.

Second – Israel is refuting and rejecting actively the inhumanity of Hamas: It was the shouting antics of Condeleezza Rice, who twisted Israel’s arm to withdraw from Gaza. In turn, Hamas threw out Fatah a year later. UNRWA schools, funded by Western taxpayers have become military establishments, which teach hatred. Having rejected at least 5 ceasefires, Hamas armaments are killing their own children. It slays opponents without due recourse to law. Hamas admits to exploiting human shields. Israel is saying a big NO to this way of life, both in a military manner and, in parallel, by providing medical supplies to Gazans.

Third –  Israel is no longer prepared to accept the malicious rhetoric of Hamas. The proponents of Hamas argue that the inhabitants are densely caged into a narrow strip of land. Yet, every day including during the war, hundreds of trucks cross into Gaza from Israel. It is the border with Egypt that is sealed hermetically. And anyway, the wealthy yet tiny Singapore is far more congested. It is clear that Hamas has attacked and will continue to attack for reasons of pure hatred.

Fourth, and potentially the straw that broke the camel’s back, Israel has watched as the West has repeatedly failed to keep moral commitments. In 2014 alone, tens of thousands have died in Syria, Iraq and elsewhere. Compared to the diplomatic noise over Gaza, politicians and civil servants have been pathetically inactive. Even while Israel has been forced to destroy the military prowess of Hamas, the 60,000 ancient Christian community in Mosul, Iraq, has been wiped out.

Take all of these points together and you can understand why Israelis, even though the government has accepted ceasefires, are very wary of laying down their weapons so quickly. For example, the Druze commander of the Golani brigade, which has seen some of the worst fighting, was injured yet publicly announced his determination to return to the frontline a.s.a.p..

And while we are talking about it, what is a humanitarian ceasefire, as opposed to any other truce? And If Hamas are so worried about its people, why has it not stopped fighting long ago?

This war started back in early July. The 4th of July is noted in Israel to recall the Entebbe raid of 1976. An elite Israeli crack unit rescued those stranded in Africa because of their religion, their nationality. Led by Yoni Netanyahu, Bibi’s brother and the only fatality during the action, Yoni famously addressed his troops before departing. “If we do not do this, nobody else will”.

Let me repeat that: “If we do not do this – get rid of those tunnels, rockets, hate –  nobody else will”. Thanks to Hamas, this Gaza war has never made the Israeli public so united in decades.

Gaza and Israel – the economies after the war

25 July 2014
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Call it a war or an operation. Support whichever side you want. What cannot be denied is that the lives of hundreds of thousands of people on both sides of the Gaza-Israel divide have been shattered.

In Gaza, one estimate is that barely 100,000 people had employment with a regular salary. As most of that was in the government sector, the number could be about to drop sharply. Today, whole neighbourhoods are deserted.  700 hundred have died to date and around 5,000 are wounded. (To give that some perspective, approximately half those numbers are assumed to be men in arms. And in Syria, this week,  700 were slaughtered in two days.)

France, the USA, the UK, the UAE and others have all promised initial aid for Gaza. However, something more substantial will be needed.

Over in Israel, the international press cannot (thankfully) report such casualty figures. And yet, for years around 1.5 million people in the south of the country have lived in daily fear of their lives from Kassam rockets. Understandably, yet again, many have fled northwards this July. Reports from the retail sector and other businesses in these districts report a 30% drop in revenues. Tourism across the country is also down by around 30%. At least four significant offerings planned by Israeli companies on the USA stock markets have been postponed. And now that 50,000 reservists have been called up, small businesses are bound to suffer.

There are some bright spots. The Israeli shekel has actually improved its position against other leading currencies. The Tel Aviv Stock Exchange has hauled back the sharp losses felt at the start of the battles. The Bank of Israel has described the economy overall as “resilient“.

In Gaza, there is not too much hope. The Hamas economy was dependent to the tune of billions on smuggling tunnels, which Egypt had blocked months ago. Daily aid still comes through from Israel. The private wealth and homes of Khaled Mishaal, Haniyeh and other leaders has not been obviously touched, while the average citizen has to wait for a new dawn.

Moving forward, historically Israel’s economy has tended to emerge from wars in an improved position. Simply put, the pick up afterwards helps to generate a mini boom. And the IMF deputy spokesman William Murray explained how he expects this phenomenon to continue: “However, we need to make clear that once the conflict ends, we expect growth in Israel to rebound relatively quickly”.

Meanwhile, the Hamas has already made it perfectly clear that it expects to be bailed out by the international community. In a fascinating comparison, CNBC financial news summarized that:

Just since 2001, Israel’s GDP has grown 1,000 percent and its economy is now larger than Egypt’s economy despite the fact that Egypt has 10 times Israel’s population. At the same time, the Palestinian Authority and Hamas have received billions of dollars in foreign aid and support. But instead of joining in Israel’s modern economic boom and encouraging partnerships, the political leaders have clearly invested in rocket launchers and terror tunnels instead.

Where to now, especially for Gaza? They cannot blame the so-called Israeli blockade, because goods come through, yet not from Egypt. They cannot complain about the density of the population, because places like Singapore have shown how this can be turned to an advantage.

I was struck by three developments this week, which possibly indicate how the respective governments will seek to look after their peoples after the guns have stopped firing. As noted by the Ma’an news agency, the Israeli army set up a field hospital in Gaza to treat the wounded. Further north in Jerusalem, a brand new centre was opened to treat people with Alzheimer’s, whatever their ethnic background. Third, no such equivalent initiatives could be found from the leaders of Gaza.

 

The economics of the Gaza-Israel fighting – Part 2

14 July 2014
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Two days ago, I questioned  what would have happened if Hamas had invested its capital from the tunnel economy in human resources and social infrastructure rather than in military might. Where would the Gaza economy stand today and would Hamas still thus feel the need to support the frightening cycle of violence?

By way of a follow up, I spied two headlines almost side-by-side in yesterday’s newspaper. The first questioned how Israel will find the money to pay for the additional costs of war. This is expected to top 3 billion shekels or close to a billion dollars. By way of comparison, the annual budget of the Ministry of Defense, the heaviest in the country, already stands at 51 billion shekels.

Now we know that Israel is no longer a third world country. Outside the EU and America, it is one of the UK’s leading trading partners. Many of the world’s high-tech leaders, such as HP and Microsoft, have set up r&d centres in the Holy Land. The Prime Minister, Netanyahu, owns properties in Jerusalem and in Caesarea.

Compare that to the second article, which considered the growing riches of the Hamas leadership. Proportionally, it appears that the Palestinian Prime Minister in Gaza, Ismail Haniyeh, can match the largess of his Israeli counterpart. Back in 2010, Haniyeh purchased a 2,500 sq meter property for around 4 million dollars.

It is not that I am trying to preach a stringent form of Communism. However, we are talking here about Haniyeh, who claims that Gaza is a financial backwater that demands Western taxpayers to support his flagging economy. Haniyeh practices his Islamic religion on his sleeve, branding himself as a man of modest means. And Haniyeh is one of the key leaders of Hamas, which ousted the corrupt fatcats of Fatah from Gaza.

I detect a whiff of deceitful disconnect. You may call it the triumphal return of the pigs from Animal Farm.

For several years, there has been a growing amount of evidence that the Gaza economy can only be explained in a bipolar manner; the poor who have remained desperately poor and the nouveau riche, many of whom have ties with Hamas. There are now hundreds of millionaires in the Gaza Strip. Palestinian commentators have long looked at “the new class of rich“. New cars have been readily available, at least while Egypt kept the tunnels open.

It appears that Haniyeh is not alone in benefitting from the poverty of his electorate. Khaled Mashal is thought to have stashed away over US2.5 billion, according to Egyptian analyst, Dr Ahmed Karima. Chairman Arafat was no friend of Hamas, but the fundamentalists have clearly studied his financial techniques. Arafat took his fortune with him to the grave, and I suspect that the Hamas leaders are also not interested in sharing their gains with their constituency.

The Gabble from Gaza focuses on the numbers of rockets launched or how many people are displaced. Both, from whatever side of the border you come from, are a tragedy. The truth is that not far behind the bloody headlines are pecuniary considerations and personal interests that Hamas is bound to protect, even at the cost of the suffering of its own people.

The economics of the Gaza-Israel fighting

13 July 2014
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

As Israel and Hamas slug it out yet again and as thousands are traumatised, killed, displaced, it strikes me how these two tiny bits of land can afford to keep bombing each other? Together, they are barely bigger than the size of Wales, either in land mass or numbers of inhabitants.

The question is particularly pertinent because resonating through the ‘Gaza Gabble” is one Palestinian argument that repeats itself; Israel’s response is disproportionate. (For the record, when discussing causes of war years ago in school, I do not recall anybody in history saying “we will not fight them because they might retaliate heavily and that would be awfully unfair). So, what allows Hamas to join the fight with Israel?

As I have repeatedly pointed out, until the onset of the Intifada in 2000, the World Bank identified the Palestinian economy under Israeli supervision as one of the fastest growing global economies over three decades. Once Hamas had secured its regime by 2007 and thrown out the former Fatah corrupt figures, the Gaza economy slowly began to make up some lost ground.

The previous economic infrastructure, such as greenhouses abandoned by Israel, was rejected. Instead, the focus was on the underground economy, literally. According to Doron Peskin from Info-Prod and quoted in the Hebrew paper “The Calcalist”, the contraband tunnel economy was worth around US$200m per month for the Hamas treasury. Jazeera says US$700m a year. Peskin cites an Egyptian source that estimates the sums at 9 billion dollars annually!

Either way, this is certainly enough to pay for 15,000 Hamas fighters, finance new shopping malls, encourage the import of luxury items, and see hundreds on new millionaires. Maybe only a top elite could afford this new economy. However, factor in how the cement is provided for free by Israel, and it is not difficult to understand how Hamas could afford to invest in factories that manufacture thousands of missiles that are then lobbed in to and all over the Holy Land.

For the record, Peskin believes these production lines are not very sophisticated, especially as the missiles are not smart devices. (After all, they have also landed in Bethlehem, Hebron and the outskirts of Ramallah). They cost about US$500 each. Accordingly, smugglers may demand about ten times that for an anti-aircraft Sam trajectory.

Last year, the new Egyptian ruler, Sisi, shut down the tunnel economy, flat and simple. Despite the severe financial hardships and even though the Sinai border is now also closed, Hamas does not attack Egypt. This leaves it with a problem – to find a way to pay for its 50,00 employees.

On the other side of the border, the Israeli economy is very proud of its achievements since 1986. Then bankrupt and suffering from hyper-inflation, today the country is a member of the OECD and has a first class stock exchange. Annual growth has rarely dipped below 3% since 2001.

Israel’s exports are led by the world of high-tech (eg Intel), diamonds, and military technology. And as the country has invested in these areas, it has found the resources (just) to create bomb shelters for much of the country and hospitals for most people. The electricity plant in Ashkelon also supplies Gaza, as could the new desalination plant, although both are currently under attack from Kassam.

Undoubtedly, the fragile Gaza economy is taking a hammering. It is still dependent on supplies from Israel, which keep coming despite the hostilities. Back in Israel, the commercial sector continues as best it can, and much depends on proximity to the Kassam launch pads. The stock market, which dropped initially, has rebounded. The shekel is fairly steady. Over the past decade of military campaigns, it has been the small business sector  that has suffered, as owners have been called up to the reserves.

So my question is this? If Hamas had invested its capital in human resources and social infrastructure, as its neighbour has done, where would the Gaza economy stand today and would it need to support this frightening cycle of violence?

Human suffering in Gaza, and elsewhere?

11 July 2014
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Categories: Afternoon Tea in Jerusalem, Israel, Jerusalem, Palestinians

The current bout of fighting between Israel and Gaza raises old issues of the economic poverty amongst the Palestinians.

And now this week’s bombing, which has resulted in tens of lost lives, makes it easy for outside news agencies to highlight these woes. Sky TV has reported the suffering from a local hospital. The BBC has shown ample footage of the wounded being carried around and other collateral damage. The NGOs are have issued a string of complaints regarding Israel’s actions.

Also this week, at least 50 bodies were found in Iraq. The UN reported that civilian casualties in Afghanistan are up 17%. And the Ebola epidemic in Africa is slaying hundreds. So, if these issues barely rank a mention amongst the educated world media, I begun to wonder if the ‘gabble from Gaza’ had also succeeded in hiding a secondary level of suffering far closer to home.

However good reporters are, we know that they cannot portray a complete story in a two and a half minute clip. Sky omitted to mention that Gaza children continue to be accepted and treated in Israeli hospitals. The BBC has been forced to admit that in its rush to put out stories, facts have become distorted in places. And not for the first time, the NGOs have accepted the sanctimonious rhetoric of the ‘underdog’ in their rush to condemn Israel without due concern for the facts. Again, is there another story?

Lets us accept for now the stats of the Palestinian Ministry of Health that tens have been killed, including women and children. It is not clear to me, how they died.  Do these same figures include Hamas soldiers killed in their own tunnels or taken out by Israeli gunfire? As for the bombings, by whom? It is known fact that up to a third of all Kassam rockets do not make it out of Gaza, falling back on the same population that launched them.  Is that not a crime against humanity?

Next, if the population of Gaza is around 3 million, there are just over 8 million in Israel, of which about 75% is Jewish. Now, the improved Kassam missiles can reach about 80% of the population in the Holy Land. Actually, one landed last night in Beitunia, close to the house of President Abbas!

This means that by attacking Israel, Hamas is waging war against nearly three times the numbers of people in its own territory, highly disproportionate. (And these people have between 15 to 90 seconds to take cover before the rocket lands.) Further, as Hamas leaders boast, the Kassams are directed at civilians, where as Israel is aiming at military targets. Another crime that the International Court of Justice prefers to ignore?

As I wrote last week, Gaza is suffering. While Hamas invested in a large underground (literally) military infrastructure, the leadership has lacked the money to pay its own followers. Resources have been channeled into weapons that kill rather than towards the creation and protection of life. If a different path had been chosen, then

Palestinian firms could be natural partners for Israeli companies – and others – looking to export to the larger Arab markets, notably Saudi Arabia, Egypt and Iraq. The nascent Palestinian technology sector would find an experienced and willing partner in next-door Israel, with its highly developed technology industry. Israeli venture capital firms could provide much-needed financing, support, and know-how to export-oriented Palestinian entrepreneurs.

Hamas has chosen a separate path, wrecking havoc on everyone, starting with its own. This is not a story about fighting in Gaza. This is a war inflicted on civilians of all religions by an Islamic leadership whose human values are deformed, putrid and vile.

The fact that the greater media refuses or is unable to recognise this wider picture concerns me. Ben Cohen has written how the Palestinians have hijacked the language of Auschwitz “to maintain their position in the Western conscience as the world’s most downtrodden nation“. Howard Jacobson observes that Israel’s critics have adopted the language of anti-semites without even realizing it. He defines this as the “gradual habituation to the language of loathing. Passed from the culpable to the unwary and back again. And soon, before you know it…….”

Gaza is suffering? Yes, and because of Hamas. And that misery is passed on in disproportional numbers to its neighbours. If only the Palestinians had a leadership that genuinely cared about human morals. And the world press has a duty to all to find a way to convey that message.

Can the IMF alone find economic relief for Gaza?

5 July 2014
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

The past week has seen heightened violence between Gaza and Israel. While the timing seems odd, in parallel, the IMF issued its latest survey of the economy under Hamas rule in the territory. Summarising the conclusion, Israel is responsible for a situation of high unemployment and stunted growth.

You cannot fault the logic. Israel does not let workers from Gaza come into Israel. The traffic of goods between the two is carefully monitored. Ergo, Israel is to blame for the demise of the Gaza economy, no?

I did wonder if the IMF wrote similar things about Afghanistan or Iraq – withdraw the troops, which seek to protect the peace, and the economy will boom (sic?).

Leaving sarcasm to one side, jump back a few years and recall how Hamas started out. It was a neighbourhood organisation that provided social services to the poor. It deliberately fed on the nepotism and corruption of the Fatah strongmen led by Mohammed Dahlan. When Hamas violently ousted Fatah from Gaza nearly a decade ago, there was little crying amongst the locals.

Initially, the Hamas economy prospered. While the commercially successful greenhouses left by Israel became military training bases. Gaza thrived via the tunnel economy. Hamas built them, controlled the contraband, and ran the finances as taught by ‘Professor Al Capone’. Shopping malls opened. Car imports soared. Unemployment began to drop.

So why in July 2014 is Hamas apparently so interested in a fight with Israel? I understand that until Thursday, most of the shelling from Gaza towards Israel came from more fanatical groups like the Islamic Jihad factions.

First, remember that President Sisi of Egypt has spent a year closing down the Sinai entrances to the tunnels. If there were around 300 operating at the time of former President Morsi, today barely a dozen are left. There goes the tax collection.

Power supplies, 30% of which comes via Egypt and much of the rest was financed by Qatar. Well, the money from the Gulf ran out some time ago. This week, the region was almost plunged into darkness before President Abbas assured Israel that it would be paid for new fuel supplies.

As for wages, there are reports that 50,000 Hamas workers have not been paid their salaries for about seven months. Given the size of the average family, that lack of liquidity probably impacts on about a third of the Gaza population.

It is difficult to argue that these financial restrictions apply to ‘those at the top’. Corruption and the siphoning off of foreign aid remains endemic. The granddaughter of the Hamas Prime Minister was treated in an Israeli hospital. There are estimated to be over 1,700 millionaires in the area.

So, it appears that the fizz has gone out of the Gaza economic dream. And this deeply restricts the ability of Hamas to care for the poor, its home constituency. When you factor in the growing influence of the Islamic Jihad and Salafists, what is left for the local leadership to do, but to attack Israel?

The Hamas military machine probably includes tens of thousands of trained soldiers. It is assessed that the arsenal contains tens of thousands of Kassam missiles. In other words, Hamas has invested singularly and heavily in military prowess as opposed to the development of human capital.

The IMF targeted Israel for Gaza’s economic woes. Yet have we not just found the missing billions that the IMF has failed to write about……………and why are these brilliant economists so quiet about it?

Look who is investing in Israel – June 2014

27 June 2014
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

My daughter asked me the other day why the Presbyterian Church voted to divest from Israel. The question was pertinent when you think just who is coming to Israel at the moment.

  • On 19th June, the Hebrew paper “Calcalist” reported that Coca Cola will invest a further US$0.5 m in Israeli start ups. That will make about 10 young companies in total.
  • A few days later, the German specialty chemicals group Altana announced that it will take a minority stake in Landa Digital Printing to the value of US$135m.
  • Final, a rather anonymous company from Herzylia that ‘dabbles’ in algo-trading, is rumoured to be considering a buy out offer, valued at US$4 billion, give or take a dollar.
  • In the past six months, six Israeli companies have raised a combined US$500 million  in share offerings in America. Next to join the list will be Cyber-Ark looking to bring in US$75million.

In other words, at a commercial level, 99% of global commercial leaders are ignoring the calls of Presbyterians and their fellow thinkers.

In other walks of life, the pattern is similar. I mentioned earlier this month how Palestinian leaders take advantage of Israel’s medical services. To that commentary, I could add the story about the Palestinian child, treated in Tel Aviv, at the very time when Hamas had cruelly kidnapped three Israeli teenagers.

In the field of music, no BDS fuss blocked the brilliant appearance this month of the Rolling Stones in Tel Aviv. Hip-hop artist Epicc has just spent a week in the Holy Land and released a special clip to celebrate. Ceelo. Green, Neil Young, and Kylie Minogue are a few of the artists booked to feature over the summer months.

I did mention to my daughter that the Presbyterian Church had been hijacked by a powerful anti-semitic minority. We discussed the stupidity of the boycott; for example, HP has been targeted, because its hardware prints the permit entries for Palestinians coming into Israel. We noted that while Israel is the only democratic country in the Middle East, the Church had been deafeningly silent in its condemnation of abuses against Christians in the region.

However you cut it, once you remove the spin of the BDS movement, two items remain. First, its basic traits and demands and targets have disturbingly similarities with Nazi laws of the 1930s. Second, Israel’s drive towards globilisation remains unhalted, thus ironically ensuring that those who hate the country end up benefitting from its capabilities.

Who kidnapped Israeli society?

17 June 2014
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem, Palestinians

Last week was a busy one, even by the bewildering standards of the Middle East. Sunni militants (ISIS) launched a violent offensive in Iraq against the government, slaughtering civilians who objected. America and the UK initiated a bizarre rapprochement with Iran. And on Thursday night, three Israeli teenagers were kidnapped, assumedly by Hamas supporters.

Measuring the posts of the international media, the Israeli story is the least important. In fact, SKY News believes that the key crisis in the Holy Land is not the immoral act of the kidnappers, but the inappropriate reaction of the Israeli authorities.

I believe that the reporters have missed a trick. If they were to focus on Israel, they will be able to appreciate with greater clarity what is happening around the oil wells in the sand dunes. Here’s what I mean.

1) Israel’s economy: Despite on-going geopolitical uncertainty, the economy grew by 2.7% in the first quarter of 2014.  And yes, that includes increasing trade between Israel and Palestinian firms.

2) Hightech: Israel’s start up economy has not stopped forging new links. Russian billionaire and owner of Chelsea FC Roman Abramovich has just invested $10 million in StoreDot, an Israeli startup developing electronics based on bio-organic materials. A Jerusalem-based company is (ironically?) developing an app to help prevent kidnapping. And CellBuddy is set to create a consumer revolution which should slash the prices of mobile phone calls.

3) Health care: The medical sector is short of cash, doctors, nurses and more. However, it must be doing something correct. Hundreds of Syrian civilians, wounded in the civil war, have been treated in Israeli hospitals. The granddaughter of the Hamas PM has been operated on in a Tel Aviv hospital. Even the wife of Palestinian President is now recuperating in a private clinic near Tel Aviv.

4) Tourism: Only yesterday, Masada, a World Heritage Centre in the desert, rocked to the sounds of La Traviata. Hundreds of tourists flew in especially for the event. Concurrently, the City of Jerusalem is running its annual Light Festival, which spectacularly winds its way around the different ethnic quarters of the Old City.

No country is perfect and that includes Israel. Yet, for all the threats surrounding it and for the morose horror of the kidnapping of the school children, Israel continues to thrive though a policy of inclusion and pluralism where possible. You have to ask: Why is this theme so hidden by the media giants?

The boys have disappeared, feared murdered, and their families are helpless. Unlike the poor girls in Nigeria, Michelle Obama has not published a post in support of the three missing religious Israeli teenagers. Catherine Ashton, EU foreign affair supremo, has yet to find time to comment on the matter.

And what else has been kidnapped? The openness and success of Israeli society, which should be promoted to serve as a light to the Iraqs and Irans of his world. Where has the world media hidden these triumphs and why?

The house of the hill – in Brussels and in Ramallah

16 April 2014
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinian Society, Palestinians

Why has Europe begun to question its role in the Palestinian financial system?

A recent diplomatic conference highlighted the problems of the Palestinian economy; strikes, corruption, high unemployment, and more. The event was hosted in Prague and since  1991, the European Union – through its taxpayers – has been arguably the principal monetary supporter of the Palestinian territories, directly and through organization such as UNRWA.

The flow of these billions is set to continue, at least to the end of the decade. Yet throughout this period, there have always been three key ‘misfits’, enveloping these subsidies.

  1. Why has the Palestinian cause earned such large fiscal attention, when others in Africa and elsewhere have missed out? It is a decade ago since Nigel Roberts, former ranking World Bank representative in the region surmised global financial support for Palestinians as “the highest per capita aid transfer in the history of foreign aid anywhere”.
  2. Why has the Arab League, for all its wealth, never matched the contributions of the Europeans?
  3. Why is Palestinian poverty highlighted and blamed solely on the Israelis, when a World Bank report noted that the Palestinian economy grew under Israeli control by 5.5% annually up to 1999? That is a phenomenal performance, absolutely and relatively.

Something does not add up.

Back in 2003, the European Union investigated claims of fraudulent use of its resources by the Palestinians. The report under Christopher Patten was never released. (Interestingly, Patten went on to run the BBC and was famed for burying reports there). In parallel, The Funding for Peace Coalition was active for many years on these same issues. As the website poses: Where has all this money disappeared to?

These are contribution paid for by farmers in Greece, small businesses in Germany or even the owner of a pub in Putney, London What has been achieved through their generosity? Specifically, as Alarabiya News questioned regarding Suha Arafat, how did the wife of the former Palestinian Chairman amass such wealth? Should people be concerned? I believe so and for three separate reasons:

First, it is an issue of good governance. A taxpayer expects his representative to take responsibility. He has a fundamental right to know where his money ends up and that it is for a reasonable purpose. It is difficult to find any other subject, where such sums – billions – were and still are transferred with relatively little transparency and accountability.

Second, as reported above, there are a lot of poor Palestinians. No argument. They deserve better. It is staggering to consider that the financial transfers from the European Union have not made a more lasting and significant positive contribution on the Palestinian economy. It is even more amazing when you compare this failure to the World Bank analysis, noted above, about how the economy had previously leapt forward when Israel had full control of the territories.

Third, there is considerable evidence, which suggests that not only have funds been diverted for the benefit of an autocracy, both in Hamas and in the Palestinian Authority. Monies have ended up in the hands of terrorists. As admitted in the House of Commons in London, by a minister at the Foreign Office, Mr Hugh Robertson, “UK officials raised the issue of payments to Palestinian prisoners in Israeli jails with the Palestinian Authority (PA) most recently in March 2014. The International Development Committee also received information on this issue from the Minister of Finance during their visit in March.” In the same vein and possibly even more bewildering was the question raised in the European Parliament by Michal Kaminski.

It is a well-known fact that the Palestinian Authority proudly owns up to illegally spending over 6% of its budget — donated by, among others, the EU, where funding terrorism is against the law — on salaries for terrorists in Israeli prisons and pensions for the families of suicide bombers. The Palestinian Prisoner Affairs Minister, Issa Qarake, has admitted on television that the salaries are directly proportional to the terrorists’ sentences and the number of Jews they have killed……What is the Commission’s strategy to stop EU funds being used to pay salaries to terrorists in Israeli prisons?

And the response:

The EU is aware that the Palestinian Authority has a system of allowances in place for Palestinian prisoners, their families and ex-detainees. This scheme is not and has never been financed by the EU.

Maybe………..BUT how did the PA have enough money in the first place to distribute such payments?

For the record, there is also growing disapproval of some of the actions of UNRWA, to which Europe pays hundreds of millions of Euros annually. Not only does this billion dollar organisation have no external auditing procedures. It prints and distributes textbooks in its schools that appear to promote violent incitement against Israelis.

So where to now? The current round of peace talks is precariously balanced. The Palestinians are fuming about the non-release of terrorists by Israelis. In turn, Jerusalem feels that President Abbas has deliberately instigated the crisis, just like at the beginning of the Intifada in 2000. In response, Prime Minister Netanyahu is forcing the Ramallah government to pay up on extensive debts, which sounds ironic in light of the above discussion.

There is some hope. On the ground, individual Palestinian entrepreneurs are trying to work with Israelis. And Israel is actively seeking to open up commerce for its Arab population. It is also very welcome to see the read of the approach of Michael Theurer, chairman of the European Parliament’s Committee on Budgetary Control. Writing in the Wall Street Journal, he observed how in December 2013,”the European Court of Auditors revealed major dysfunctions in the management of EU financial support to the Palestinian Authority, and called for a serious overhaul of the funding mechanism.” He continued:

The report from the European Court of Auditors is a wake-up call on the need for stricter supervision of how EU funding to the Palestinian Authority is spent……A useful next step would be the imposition of clear benchmarks and conditions that the Palestinian Authority would have to meet in order to receive additional EU funds. These should include improving the state of human rights in the West Bank, cracking down on corruption and cutting off subsidies to convicted Palestinian terrorists.

Until then? The sad fact is that as long as Palestinian and European decision makers remain safely ensconced on their hilltops in Ramallah and in Brussels, Palestinian and Israeli civilians alike will continue to suffer, as will the bank accounts of European taxpayers.

Why Europe is encouraging financial investment partnerships from Israel

16 March 2014
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

For over two decades, Israel has been parading itself as the start up centre of the Middle East, encouraging overseas players to invest in technology, stocks and infrastructure in the Holy Land. For example, “foreign  investments in companies traded on the Tel Aviv Stock Exchange more than  tripled from 2012 to 2013″ to US$1.5 billion.

Yet it was the visit to Israel last week of the UK Prime Minister, David Cameron, which alerted observers to a more balanced flow of financial trade, especially with Europe.

Yes, Cameron won over many friends with his clever speech to Israel’s Parliament, the Kenesset. He also pledged a series of aid measures for the Palestinians. This included yet more UK taxpayers’ money to be channeled through UNRWA, a billion dollar a year project with no external audit.

What was new was the 70 million of investment into the UK pledged by Israeli private enterprise. The investment, which will create hundreds of UK jobs, including:

A £50 million commitment by Israel’s Noy Infrastructure and Energy Investment Fund to the UK’s renewable energy sector.

A £12 million investment by Israeli pharma company Teva in clinical development in the UK.

A £10 million investment by Israel-based AposTherapy in the UK in the next three years, creating hundreds of UK jobs.

As the two countries noted: “These announcements are testament to how the UK and Israel work successfully together. UK exports have grown steadily and we are now the third largest exporter to Israel and there are now over 250 Israeli companies operating in the UK.”

These are not isolated moves by Israeli companies. It was reported last month that “Israel’s institutional investors have sharply increased their holdings in overseas markets, which now represent 22% of assets under management at the end of last year, up from just 15% three years ago….. Among other foreign investments favored by Israeli institutionals were ETNs tracking European stocks and shares in emerging markets.”

So where has this paradigm shift come from? The fact is that while Israel’s economy has its problems, it is considered strong and solid. Through a stable banking system, it rode the global credit meltdown more successfully than most. It is developing an offshore energy industry. Add to that the financial benefits of Israel’s propensity to come up with great start ups, and you end up with a lot of new capital looking for a base overseas.

And that is why Europe is increasingly looking to tap into Israel’s emerging abilities in the money markets. Hundreds of millions stand to benefit from this new source of wealth in the Middle East.

Palestinian economy – A story of ‘if only’?

7 February 2014
1 Comment
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinian Society, Palestinians

Palestinians have long blamed Israel and the ‘occupation’ for its economic woes.  For example, using selective quotes from the World Bank, they cite that if Israel ended its restrictions on Palestinian businesses and farms operating in “Area C” – 61 percent of the occupied West Bank – “this would add as much as 35 percent to the Palestinian GDP.”

And yet, as I have pointed out several times, until the Intifada, the World Bank had also observed how the Palestinians had one of the fastest growing economies on the global map. So where do we go from here?

Palestinian news agencies will seemingly report with near glee how their economy is in trouble. Strikes, not enough money to pay for the ever- growing number of civil servants, extreme weather, etc are just some of the disaster stories. There are a few bright spots, such as possible gas exploration and fleeting high-tech successes.

What some supporters of Israel may find surprising is that it has been the EU that recently pointed a way forward for the Palestinian economy. Now remember, depending on how you calculate it, the EU, directly, through member countries and through UNRWA etc contributes over one billion dollars annually to the Palestinians. As reported by Al Jazeera, “European officials recently warned the Palestinians that European countries were suffering from “donor fatigue” after spending billions of dollars in aid with limited results in achieving a lasting peace with the Israelis.”

Over what is written in the article,there is a greater concern, that of corruption. Evidently, the EU is concerned that billions has been ‘lost’ in the system. This was confirmed by a senior research assistant at Chatham House, a leading research institute in London. Entitled “Middle East peace – it’s not the economy stupid”, the paper considers that:

Corruption and inequality in the Palestinian territories are a significant factor behind public scepticism and cynicism about economic plans. Palestinians are well aware of corruption in business, and their negative views are exacerbated by socioeconomic divisions.

These “self-inflicted wounds” to borrow another commentator’s phrase simply damage the hopes and aspirations of Palestinians, who deserve better. The culture of corruption that was allowed and encouraged and utilized by Chairman Arafat continues way beyond his death.

“Al-Shabaka is an independent non-profit organization whose mission is to educate and foster public debate on Palestinian human rights and self-determination within the framework of international law.” It argued in a research paper  how “while most Palestinians living under Israeli occupation are struggling to survive, a powerful group of Palestinian capitalists is thriving and growing in political, economic, and social influence.”

The report provides examples of the retail, banking and building sectors, where Palestinian capitalists have made huge profits. the centralization of economic power has come at the expense of millions, who are left to complain about the exploitation by Israelis. This is ironic in a week, when a leading official of Oxfam, one of England’s leading charities, called for Palestinians to stop working in Israeli factories, even though they earn much better wages there.

There is another route. The Israeli government has made great efforts in recent years to ensure that venture capital is increasingly available for the minority sector. Is it enough? Probably not? Does this provide an excellent start, leading to jobs and the creation of wealth for more? Seemingly so.

Effectively, what the EU and Al Shakaba are asking is: If only the Palestinian leadership had been able to demonstrate better financial leadership over decades, how much better off would millions of people have become today? And how would that have impacted on the peace process?

Israeli entrepreneurs that you do not hear about outside Israel, because…..

4 February 2014
3 Comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

There is much talk these days of the potential of a widening boycott against Israeli businesses, because……well, it sounds politically correct.

Israeli advocates point to the hypocrisy of the situation. The boycott campaign proponents (BDS) do not advocate an equivalent boycott of China or elsewhere. Two Israelis, resident in New York, have just concluded a US$100 million property contract on behalf of the government of Qatar, no problems there apparently. A Palestinian survey reveals that 70% of respondents declared a preference for Israeli products. And for all the controversy of Scarlett Johansson’s advert for SodaStream during the Superbowl and the subsequent venom of Oxfam, Palestinians clearly enjoy working for Israeli employers in the West Bank.

OK, but what about encouraging the Arab sector in Israel?

Well, in the past two years, the Prime Minister’s Office has initiated a couple of seminars promoting the issue. Further, a technology incubator has been created in Nazareth, a city combining Jews, Moslems and Christians. Similarly, so few people know about the Al Bawader investment fund, set up in 2010 through an initiative of the Israeli government and the Israeli venture capital group, Pitango. It has a fund of over US$50 million to invest specifically in Arab ventures within Israel.

Al Bawader has a current crop of seven start-ups on its books. A typical example is Ms. Mass Watad, born in 1980 and who studied at the Hebrew University in Jerusalem. She currently owns a chain of diet clinics and in addition has developed a massage therapy. She  intends to set up a series of franchises in the Arab world.

Datumate Ltd, very clearly in the high-tech sector, was founded by Dr. Jad Jarroush. Employing ten people and benefitting from the marketing reach of Pitango, it offers software applications for customers in the area of land surveying, civil engineering and architectural planning.

As I write this, there is a very active television campaign in Israel, rejecting racism in all its forms. So few of Israel’s detractors will tell you about this prime-time effort. So few will report on the successes of Al Bawader. There again, so few of them reside in countries with similar adverts.

Israel’s economy: What if…….?

9 December 2013
1 Comment
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

It is becoming increasingly apparent that for all the complaints of the Palestinians, the Israeli government has made some genuine concessions in the secretive peace talks between the two sides. There have even been unconfirmed discussions with the Saudis.

For decades, one of the basic gripes of the Palestinian Authority has consistently been the argument that Israeli security measures have restricted the development of their economy. The rhetoric has been backed by a plethora of reports from the IMF et al.

In some ways, this is no brainer. If you block the free flow of peoples and materials, whether or not you may be stopping a suicide bomber or two, you are going to impinge on commercial growth. It is worth reflecting that the World Bank reported that the Palestinian economy under so-called Israeli occupation was one of the fastest growing in the world for decades become Chairman Arafat launched the Intifada in 2000. It would be interesting to calculate how much Palestinian people have lost financially for the cause of violence.

Actually, there has often been a second level of economic concern for the Palestinian leadership. While on the one hand, it quietly promotes the boycott campaign of Israeli products, tech, academia and art, it also demands that Israel does more to support its fledgling economy. A classic example is the need to replace Gaza’s dependence on Egyptian electricity.

The seemingly political-correctness of the boycott campaign masks the hypocrisy of the fact that it too acts as a barrier to encouraging trade between parties. Clearly, this is a case of the pot calling the kettle black. And there is a more deeper, and conveniently hidden, question. How much has Palestinian hatred towards Israel cost the Israeli economy?

Two starting points: First, since 2001, Israel has had to invest heavy resources to combat an Intifada, defend itself against incursions from Gaza, fight a war in Lebanon, protect itself against a nuclear Iran, and fight off a global recession. For all that, average annual GDP growth has been around 4%, impressive by any standard. Second, before the Intifada, it is estimated that around 125,000 Palestinians secured regular daily work in Israel. Today, that figure has ‘climbed back’ to around 40,000.

The New Yorker Magazine recently estimated how much Israel has surrendered in lost economic potential because of the existential threat it faces. The journal quotes an economic model from Yusaku Horiuchi and Asher Mayerson, who asked what would have happened if Chairman Arafat had accepted Barak’s proposals in 2000 at Camp David. (It would appear that much of this offer is still on the table today via John Kerry!)

Cumulatively, from 2001 to 2010, Israel’s per capita G.D.P. was $25,513 less than that of synthetic Israel’s. ….For an Israeli family of four, even after income taxes, it might have meant a down payment on an apartment, a college education for a child, or a couple of new cars…..Because tax rates in Israel are generally around forty per cent, there are implications for the government, too: based on conservative estimates (assuming, for instance, that only a third of the revenue goes to taxes), the lost G.D.P. could amount to nearly sixty billion dollars going to the government—a big proportion of the country’s annual budget.

This week, Israel announced that it would help to fund a project to build a water pipeline from the Red Sea to the Dead Sea, which will jointly benefit Jordan and the Palestinians territories. Just think how many other infrastructure projects – schools, hospitals, roads – could have been funded if violence had not forced a different turn of events?

The relative methodology to understanding BDS

25 October 2013
3 Comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

The Methodist Church in the UK has created an on-line survey to ask for opinions on BDS – Boycott, Divestment and Sanctions – a global economic, academic and cultural campaign to apply political pressure on Israel.

In a nutshell, supporters of BDS argue that Israel’s occupation of the West Bank since 1967 is brutal and contradicts international law. It must be stopped.

Israel’s advocates believe that this is a politically-correct truth, wrapped up in a lie. It is George Orwell’s newspeak at its most triumphant. After all: –

I am not an expert of Methodism, which arose in the 18th Century as a response to perceived hypocrisy in the established Church of England. I do believe that any true religion does not look to generate separation, distrust and hatred. Rather it should be seeking to invest in co-existence at grass roots level. In the past few years, Israel has made the following advances towards working with Palestinians: –

  • Contrary to BDS circulars, Israel helps to provide extra water and sewage solutions to the Arabs, inside and outside the Palestinian territories.
  • President Peres recently invited the Barcelona football team to Israel, and great efforts were made to ensure that the players visited Ramallah.
  • A new scheme has been launched to ensure that 500 Arab teachers are employed in Israeli schools
  • Increasing numbers of Arabs – Christian, Muslim, female – can be found serving in the Israeli army
  • The ‘Save A Child’s Heart’ campaign in Tel Aviv has saved the lives of hundreds of Palestinian children with cardiac conditions over the past two decades. (Actually, the team is currently involved in a unique project in Tanzania. Should that too be boycotted?)

All that is left for me to understand is what precisely the proponents of the boycott intend to achieve? Yes, they can put pressure on celebs like Stephen Hawkings not to visit Jerusalem, even though the very tools keeping the professor alive are powered by Israeli tech. Please note that Microsoft, Siemens, HP, General Motors, Facebook, R&D centres operating in Israel and turning out services for the whole world. Just check out on the internet re the levels of foreign investment in Israel. (However, I suggest caution before using Google, as it is co-owned by an Israeli.)

PWC estimates that Israeli exists in 2012 were valued at US$5.5 billion (mainly from overseas) and this figure will be topped in 2013. This year has already seen:

  • IBM purchase Trusteer, which protects millions of bank accounts in the UK and America from computer theft.
  • Communications giant, Cisco, add intucell to ten other Israeli acquisitions. These applications are found next to the television set and in the phones of billions globally.
  • Facebook buy onavo to enhance its mobile app capability.

Should these deals be reversed, and why? Warren Buffet, French retailer Kiabi, health giant Prolor Biotech and so many more have upped their positions in Israel during 2013, effectively benefitting millions internationally.

So what is BDS really trying to say? If I refer back to the position of the Israeli advocates, they point out that one of the founders of BDS, Omar Barghouti, advocates for the total destruction of the Jewish state of Israel, even though he studied at the University of Tel Aviv.

I suppose this same Barghouti would boycott all the theories and the science of Albert Einstein, because the estate of this Nobel Laureate has been dedicated in its entirety to the Hebrew University of Jerusalem. This leaves many to believe that BDS is another name for the theory of relative hatred.

Israel’s economy – friend or foe?

11 October 2013
1 Comment
Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem, Palestinians

Consider these facts on Israel’s economy, released by international financial organisations in the past few days.

  • The World Bank believes that Israel’s control of the West Bank hinders the Palestinian economy to the tune of US$3-4 billion per annum.
  • The IMF has assessed that Israel’s economy will grow by around 3.3% in both 2013 and in 2014, at least double the rate of the USA and the European Union. Interestingly, the Palestinian economy is expected to contract for the first time in a decade.

Many of the newspapers that followed the first story have been asking why Israel does not withdraw from the Palestinian territories, and then economic wealth should flood in. No?

There again, reports from Reuters and elsewhere indicate that corruption is so historically endemic in the Palestinian territories that any new money would merely flow towards those already accustomed to receiving it.

I wish to propose another question.

If the Palestinians and others would cease their attacks on Israel, would this not release vast additional resources for social and commercial projects? After all, Israel has already approved 300 economic and humanitarian projects for Palestinians in the past 24 months and more are in the pipeline. If so, then maybe the economy of the Holy Land could help to lead others towards greater prosperity. Yes?

The surprise of investing in the Palestinian economy

18 September 2013
4 Comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinian Society, Palestinians

However you look at it, the Palestinian economy is not very strong. It is easy and convenient for outsiders to hoist the blame on Israel. And whenever a Palestinian leader meets a Western counterpart, the resulting press release almost always refers to a request for foreign aid.

I have often tested the fallacy of this argument by citing an IMF report that shows how under Israeli rule, the joint economies of Gaza and the West Bank were one of the best performers from 1968 to 2000 – 5.5% per annum on average. It now appears that there is a second fallacy. Despite popular belief, while Europeans pour their taxpayers money into the Palestinian economy, there is a relatively poor parallel response from members of the Arab League.

My starting point is a comment reposted on the LinkedIn page of the ‘Economist’ magazine. According to a Malaysian expert, Prof. M. Aslam Haneef,  “The total amount of charities and gifts that are coming from the Muslim world is 15 times more than the total of the UN aid package.” A bold statement, which I am not able to challenge.

And then I read a commentary from the Gladstone Institute. Mainly through UNRWA, yes a UN body, “the Palestinian people have received per capita, adjusted for inflation, 25 times more aid than did Europeans to rebuild war-torn Western Europe after the Second World War.” UNRWA’s budget in 2012 exceeded a staggering US$900 billion.

The USA, EU, UK, Sweden, Norway, Germany, The Netherlands and Japan pay $644,701,999, or 71% of the annual UNRWA budget.

So where do the Muslim states rank? First in, at #15, is Saudi Arabia. The land of palaces and private gold leaf painted Airbus A380’s on the Royal runways chipped in $12,030,540 — less than half of a tiny country such as the Netherlands. Second, at #18, is Turkey, the supposedly economically flourishing state of a prime minister who zealously supports Hamas, but which contributes only $8,100,000. Qatar, which stands accused of paying millions in bribes to win the bid to host the 2022 World Cup, and is now spending millions on the construction of high end soccer stadiums, contributed exactly $0 to its Palestinian brothers in faith.

Seeking to move beyond the sarcasm, I checked out the ‘economy page‘ of the Ma’an News Agency, based in Ramallah. Of the twelve leading items, six refer to pleas for overseas aid. Of these, only one connects to an Arab source, a Saudi contribution ‘to develop sewage refineries’ (sic), while the rest are the USA, EU and…..well the story begins to repeat itself.

In the private sector, the situation is not much different. One of the few genuine venture capital groups in Ramallah is Sadara, which recently raised US$30 million. From whom? “Google, the investment fund of George Soros, the European Investment Bank, the Skoll Foundation and the Case Foundation. The software giant Cisco has invested $5 million.” Again, no prizes for observing who is not listed.

The Palestinians need financial help. No argument. Assumedly, they would reap greater rewards from current donors if they could improve their transparency and accountability. Meanwhile, you have to ask, what is it that the Arab block knows, which forces it not to invest in the Palestinian economy?

Do Palestinians really conduct business with Israelis?

13 September 2013
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem, Palestinians

There is an international movement called BDS. Founded by Omar Barghouti, who curiously enough studied at Tel Aviv University, the group seeks to impose an international boycott on Israel, cultural and economic, whether the subject matter relates to Israel pre or post 1967 borders.

So if 171 non-governmental Palestinian organisations started off the protest, you would surely expect to see Palestinians running from any opportunity to support business with Israel?

And then along comes Hani Alami, 43 years old and star of the Palestinian telecom scene. Alami has just purchased 30% of Alvarion, former leader of the Israeli internet industry. According to a Hebrew article, the bidding closed around 48 million shekels, about US$14 million.

And this poses the question, who else is trading with Israel?

Well, there is an official trade agreement between the two sides, signed by the Prime Ministers. There is a chamber of commerce. There is around 3 billion dollars of recorded annual trade. And this is in addition to a plethora of on-the-ground projects that are rarely featured in the international media – sharing water resources, open networking by CEOs, and even occasionally at retail level.

BDS is an evil non-sequiter. Peace can only come through promoting cooperation and further mutual understanding, but BDS prohibits the two sides coming together. And if BDS was so interested in human rights, why does it not object to Palestinians trading with China or Russia, or why does it not complain about Hamas executions of criminals?

David Olesker wrote:

The most extreme detractors of the Jewish state assert that the key to understanding the region (and perhaps the whole world) is to understand that “Israel is the problem.” Like the classical antisemite, the ideological enemy of Israel sees Jews and Israel behind everything that is wrong in the world. Most reasonable people who are generally supportive of Israel’s rights can’t easily be seduced by the conceptual frame that defines a world where “Israel is the problem.” However, they can fall prey to its less extreme form of the frame, which can be summed up as “Israel is the issue.”……If Israel is the issue, then all problems can ultimately be resolved only by actions on Israel’s part .

And thus the circle would be closed, except that there are still enough Palestinians out there who understand that hatred serves…….. hatred. It never creates prosperity nor harmony. Witness Alami, who would happily show you how much Israeli tech has been installed into the Palestinian mobile and telecom sector in recent years.

Does Israeli society promote peace in the Middle East?

14 August 2013
1 Comment
Categories: Afternoon Tea in Jerusalem, Israel, Jerusalem, Palestinian Society, Palestinians

I was in Tiberias this Saturday night, walking along the edge of the Sea of Galilee. As I strolled down to the sea front, past the Scottish Hotel, owned by the Church of Scotland, the crowds were deafening. Jews mixed with Druze, who mixed with Moslems, along with the foreign tourists. All were customers and waiters at the multitude of restaurants on the thriving promenade.

And while thousands of Israelis were partying, American Secretary of State, John Kerry, was on the warpath. He is pulling out all the stops to reignite peace talks – at least, talks about talks – between Israelis and Palestinians.

Depending on whose spin you believe: Either the Israelis are not serious, because they keep building or enlarging so-called settlements. Or the Palestinians have shown less than a minimalistic level of commitment by bombing tourists in Eilat. UN experts have shown revealed their position by criticising Israel for its supposed harassment of a Palestinian human rights’ activist.

All this comes on a day, when Israel released 26 Palestinian prisoners, as a gesture of good will. Judging from the record of the former inmates, Israel was forced into this move by Kerry. Tom Gross, an experienced journalist covering the region, has noted that:

  • Abu-Musa Salam Ali Atia of Fatah  hacked to death  Holocaust survivor, using an axe in broad daylight.
  • Ra’ai Ibrahim Salam Ali of Fatah killed a pensioner by axe blows to the head while he sat on a public bench reading a book.
  • Two of the prisoners, Abu Satta Ahmad Sa’id Aladdin and Abu Sita Talab Mahmad Ayman, were imprisoned in 1994 for the murder of David Dadi and Haim Weizman. They killed Dadi and Weizman as they slept in Weizman’s apartment, and then cut off their ears as trophies.

And so the list goes on. You have to ask. Why would Palestinian President Abbas want such people released into his society? Why give them a heroes welcome? And why has there been no reciprocal move to show to Israelis and the peace brokers how serious the Palestinians are about peace?

What the process is showing is that while Israel, and specifically her Prime Minister Netanyahu, are not liked by parts of the international diplomatic community, their complaints do not stand up to realities on the ground. It is not just that citizens of different religions mix freely on the streets in the Holy Land, Israel goes out of its way to help others. For example, dozens of Syrians have now been treated in Israeli hospitals as a result of fighting on their own soil.

In contrast, as Palestinian journalist Abu Toameh records, “while Palestinians are being slaughtered and forced out of their homes in Syria, the Lebanese government is preventing them from entering Lebanon.” And in Gaza, the planned executions of named traitors has even attracted the disgust of the British government, as well as the UN and Amnesty International.

There are no simple paths along the journey towards peace. This was best illustrated by a recent and amazingly frank appraisal by an outgoing member of the Spokesperson’s Unit of the Israeli army.

However, I would like to take one step further what the Wall Street Journal wrote. “What does it say about a prospective state of Palestine that among its heroes is Salah Ibrahim Ahmad Mugdad?“, who beat a 72 year old security guard to death with a steel rod. When Abbas and co are prepared to find a new type of hero, one that Israeli society can relate to, than Kerry’s efforts will have a far deeper meaning.

Peace talks and what Palestinians says about their own economy (2)

2 August 2013
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Categories: Afternoon Tea in Jerusalem, Israel, Palestinian Society, Palestinians

Earlier this week I questioned if the potential of increased economic wealth for the Palestinians is a priority for their own leadership during the peace process, which has made a solid start.

The issue is not the scope and vast potential of the Palestinian economy. As one person remarked – only half in jest – that it is possible to predict how Hamas and Fatah will go to arms; not over the role of religion but over who will control the revenues from energy reserves off the Gaza coast.

“Where is the money” has always been a sensitive issue amongst the Palestinian elite. This issue of financial responsibility and transparency is barely discussed openly, if not censored. However with a large dose of ironical timing, Mohammed Dahlan, the former head of the Palestinian internal security services in Gaza, has just accused the Palestinian Authority of being a corrupt institution under Abbas’s thumb. And using an Israeli legal team, he is seeking to take his own President to an international tribunal.

Now Dahlan is no saint. Google long enough and you can discover how he rose to fame by controlling youth gangs in Gaza. Along the way, he secured for himself the rich cream off monopolies and perpetuated via the ‘tunnel economy’. Hamas ousted him from Gaza, and he left the West Bank two years ago in political disgrace, but wealthy.

What must be disappointing for the average Palestinian is that Dahlan is not alone in achieving financial security while his people endure 30% unemployment. Mrs Suha Arafat, wife of former Palestinian President, has probably visited every 6 Star hotel in Europe over the past few years, a lifestyle supported by some extra generous handouts. And as Al-Monitor reported:

The annual report for 2013 issued by the Coalition for Accountability and Integrity (AMAN) showed that corruption is still rampant inside public Palestinian institutions…….Examples were given of public-fund squandering in Palestinian municipalities of the West Bank, where the total accumulated debt of municipalities and water-works agencies owed to the PA amounted to 1 billion Israeli shekels [$280 million] in the period between 1996 until 2012. Official vehicles were still being misappropriated by employees while suspicions grew concerning the running of Palestinian Airlines and the building of a mausoleum for the late President Yasser Arafat in Ramallah.

For the patient reader, detailed reports of misappropriation, lack of transparency and low accountability from 1993 to 2010 can be found at the website of the Funding for Peace Coalition.

What is so disturbing? The world is looking to create a stable peace treaty. Unfortunately, the same Palestinian hierarchy that has a self-vested interest in perpetuating the poverty that has been ramped up since 1993 (when Arafat returned to Gaza) are the very people surrounding President Abbas…… and condemned for corruption by senior Palestinians themselves.

Peace talks in the Middle East? What Palestinians says about their own economy

30 July 2013
1 Comment
Categories: Afternoon Tea in Jerusalem, Israel, Palestinian Society, Palestinians

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?

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