The STEP Conference in Jerusalem looked at the opportunities open to the Palestinian and Israeli economies.

So what’s so special? Bibi Netanyahu was very keen to give the opening address. So I made sure that I listened very carefully. the following are direct quotes.

“The economic track is a compliment – not a substitute – for peace negotiations.”

He is looking for “rapid development of the Palestinian economy”.

“There is an important future for the Palestinian-Israeli economic relationship”

“I urge you to invest in the Palestinian economy”

Like him or not, this sounds like a man looking for a better road to peace, just as Obama is seeking new solutions to his problems. Maybe it is time for the new American regime to reassess Israel’s incoming Prime Minister.

It is an accepted fact that whether due to conflict or a corrupt leadership, Palestinians are dependent on aid.

I have long argued that while the money is needed, it is handed out in a manner that wavers between meaningless to dangerous. For proof, just consider how Chairman Arafat died as one of the richest men in the world.

In contrast, I have recently witnessed some encouraging news for the Palestinians. 

First, this week, I was invited to join a tour around Israel with an NGO, whose charity is active in the Palestinian territories. One of the first stops was in Ramallah, where the The Portland Trust is building cheap housing and helping to develop pension schemes. These are on-site projects,which will make a long-term difference to society, beyond the reach of waring factions.

And I am to attend the Jerusalem STEP Conference, directed at promoting economic opportunities in the Palestinian Areas. The PM designate, Netanyahu, will give the opening address.

It is these types of initiatives, which the world needs to focus on. It is time to move away from terms like “occupation” and “terror”. If the peace makers would start to concentrate on the very people affected by the conflict – on both sides – maybe there will be some genuine hope for all.

Tourism in Israel had a brilliant year in 2008. Around 3 million visitors arrived, two thirds of whom were Christians. A significant increase on previous years. 

As the Tourism Ministry has reported: –

During the last decade, the ministry has invested tens of millions of shekels in developing sites including, among others, the Mount of Olives Promenade, Via Dolorosa and Christian trails in Jerusalem, Nazareth and around the Sea of Galilee.

Going forward, in less than two months from now, Pope Benedict XVI will visit the Holy Land. Although accepted that he will not be accompanied by tens of thousands of “well wishers” as his predecessor was in 2000, his entourage will still be very heavy indeed. Jerusalem hotels are already reporting full capacity for the period.

It goes further. This week, a large delegation of Israelis, representing the full spectrum of the tourism industry, visited Bethlehem.

With the cooperation of the Civil Administration, the city has been part of the boom since late 2007. In parallel, the Tourism Minister of the Palestinian Authority, Khouloud D’eibes, has given his open support to the initiatives and enhanced cooperation.

The net uplift: Welcome income for two economies, showing what can be done together. A model for economists. A slap in the face for detractors.

This weekend’s tennis match between Israel and Sweden appears to have more to do with politics than sport. Pictures of the violent protests against Israeli representation recall the worst days of the Intifada.

It is easy to compare the lawlessness of the protesters with those who attacked British police recently in London. Of more interest is to analyse their basic complaint that Israeli society is racist.

Speak to Ishamel Khalidi, Israel’s deputy consul general in San Francisco. A Muslim, a proud Bedouin, the owner of a master’s degree from Tel Aviv university, he clearly disagrees with such an appraisal. Writing recently in the San Franciso Chronicle, he observed: –

If Israel were an apartheid state, I would not have been appointed here, nor would I have chosen to take upon myself this duty.

On a different spectrum, the Leo Beck School in Haifa has a diverse student background. You can find Jew, Muslim, Druze, Christian, etc. Almost every year, another multi-ethnic school opens in Israel.

The Israeli Parliament has numerous non-Jewish representatives. The judiciary is replete with members of the minorities. And my wife works in the Ein Kerem area of Jerusalem, where today the church bells will toll out loudly as per every Sunday.

On March 4th, the Independent Commission for Human Rights released its monthly report re violations of civil liberties in Palestinian territories. At least 4 citizens, including Basheer ‘Ilayyan al Zaytouneh, died from torture. One died under interrogation from Palestinian police. Numerous journalists, like Wa’el Issam Abdul Qader, were detained or arrested or deported. etc etc.

So, are teh protesters in Sweden really interested in human rights or dumping their “politically hatred” on others?

With hindsight there were many people warning over Madoff, years before he was forced to tell the truth about his Ponzi scheme.

Now turn to the Middle East. Since the Oslo Accords of 1993, roughly 25% of revenue of the Palestinian Authority comes from taxpayers in Europe, America and other donor groups. For example, in a statement released from Brussels last week, the commission observed that: 

The EU is the largest donor to the Palestinians. In recent years, the combined contribution of the European Commission and EU Member States has reached €1 billion per year, which is not sustainable.

 The question is: Do we know where the money is going to? Are the transfers accountable and transparent?

Just look at the work from the pressure group, Funding for Peace Coalition. With reports dating back to 2003, 2004 and 2005, the team has warned that large amounts of foreign taxpayers investment in the Palestinian Authority has simply disappeared.

What makes this a Ponzi scheme?

A combination of political correctness, goodwill and pressure from the Arab League has encouraged Europeans to support the Palestinians financially, just as America is perceived to help Israel.

It is no secret that the Arab countries have rarely delivered on their promises. The Europeans are finally wondering what they are getting for their Euro.

Benita Ferrero-Walder, European Commissioner for External Relations and Neighbourhood Policy, intended to pledge on 2 March in Sharm El Sheikh (Egypt) €436 million ($554 million) to the Palestinian people for 2009 at the “Conference in Support of the Palestinian Economy for the Reconstruction of Gaza”.

This will be on top of a similar amount of direct aid alone delivered in 2008, much of which went to pay for Hamas civil servants in Gaza. The new gold is supposed to be used for rebuilding Gaza. However, it is to be handed over to Abbas of Fatah, who has no control in Gaza!

So here comes the sting! The Europeans have opened the door as widely as possible for Barak and Hilary from the new-can-do White House. The Yanks have promised US$900 million extra bucks. But to whom and why?

To Fatah? Er, remember that Arafat died as one of the richest men in the world. To Gaza? But again Abbas does not rule Gaza. To UNRWA, whose stores are openly ransacked by Hamas operatives? Etc etc.

So what we have is: A bottomless pot, designed to feed aid to the Palestinians. European taxpayers, who have poured in loads of wealth but seen little in return. Americans, who are used to parting with money without conducting due diligence.

This week’s confrence in Egypt has promised US$4.5b  to 3m Palestinians. Will they get it? Would some of this be better used in Darfur, Zimbabwe or elsewhere? Learning the truth about Gaza and the Palestinians is often more complex than unravelling a Ponzi scheme.

The Western media has concluded that Israel’s air force and artillery flattened the Gaza Strip. Many are homeless. And Hamas, yes they are naughty for firing rockets at Israel, but it needs to be helped in order that the population at large does not suffer further.

According to a debate in the British Parliament, “the Muslim community in Blackburn raised £150,000 for a Palestinian charity in just one week.” Praiseworthy indeed, and let us hope that transparency has improved since the days when the Arafat and Dahlan team pocketed much of such donations.

In the past few months, there has been growing evidence to suggest that Hamas is in fact far wealthier than it wants to admit.

1) Khaled Abu Toameh is one of a rare breed. An investigative Palestinian journalist, he has eyes and ears in many parts of the territories. In a recent interview, he noted that:

Hamas could not have taken control of the Gaza Strip in 2007 had it not been for support from Iran and Syria. They had logistical and financial support, which means weapons. Most of the weapons coming into Gaza are being financed by Iran and facilitated by Syria.

2) Hamas is also not burdened with having to provide over a million people with education and welfare. Much of that role has been taken on by UNRWA. In a recent report,  UNRWA was slammed for becoming a political institution, managed by Palestinians for Palestinians, even open to abuse by terrorists. Ironically, on at least 3 separate occasions since early January, Hamas members have stolen UN property, including UNRWA supplies.  

3) It is the smuggling tunnels that have historically been the financial lifeblood of Hamas. Speak to any journalist, like Matt Rees, who has covered the Gaza Strip over the years. During the Intifada, cease fires with Israel were broken because gangs could not bring in their contraband. Toameh notes that the tunnels have existed for decades.

 And new evidence is emerging that Hamas has actively encouraged the tunnel industry since 2007. The tunnels provided a way to bring in weapons and raw materials. Hamas sold “licenses” for the building of some tunnels, raking in a fortune in undisclosed taxes in a poor economy. Individuals made a fortune out of commissions, just like Dahlan of Fatah in the past.

To quote Hamas Finance Minister Ziyad Thatha:

A number of investors collected millions of dollars in a way that is against sharia (Islamic law) and we will operate against them.

At least now we know why Muslims around the world have to collect money for their brothers and sisters in Gaza. No wonder, national appeals have been started for them. it will be interesting to see if that includes donations from governemnt ministries.  

Israel goes to the polls today. 33 parties to choose from – green, Jewish religious, Arab, pensioners and the usual lot – they are all there competing on the basis of strict proportional representation.

Each election throws up its own irony. This year, when the winter rains have been almost non-existant, it is puring down as I write. Maybe this will put off a few people.

The non-Jewish voter is never short of choices. For example, the Druze are represented on many of the lists of the major parties. The Balad group and others, openly and consistently critical of Israeli governments, are trying to encourage their supporters to turn up and vote.

What is undisputed is that everyone has a right to one vote and cast is freely.

Palestinians can look on with wonder. , Hamas continues is rule by threat and violence. The Palestinian-run Independent Commission for Human Rights reported in a press release on February 8th that yet another Palestinian has been tortured to death by Hamas in a Gaza hospital.  Jameel Shafiq Shaqqura was 51, and heralded from Khan Yunis. In a separate incident, UNRWA has finally convinced Hamas to return supplies that were stolen in broad daylight.

No doubt, the result of the election will produce yet another coalition government. Weak or strong, right or left, whatever its formation, today confirms yet again that Israel resides firmly in the camp of pluralistic, democratic societies.

I am usually reluctant to write about the Israel-Palestinian issue head on. In the past 2 weeks, several stories have come my way, which were never covered by the Western media and I feel deserve a wider readership. What links them is how they show that human rights in Palestinian territories are exposed and still protected under extreme situations.

Last week, an Israeli from the town of Emannuel in the West Bank was arrested. He was arrested, suspected of shooting dead a Palestinian youth, who had thrown stones at him as he was driving. When examined, there were no bullet marks on the body. A forensic report revealed that the teenager had died from his own stone, which had hit a tyre of the car and had rebounded at high speed.

A few days later, Jordanian news agencies reported that aid sent by the Hashemite Kingdom to Gaza had been hijacked by gunmen, never to reach the average man on the street. This act merely confirmed what Israeli sources have been shouting for years. Significantly, UNRWA had to suspend temporarily its aid conveys in to Gaza.

And finally, there is the story of Yishai, an Israeli soldier, who spent several days in Gaza during January. His unit slept in a temporarily abandoned house. What follows is Yishai’s thoughts, wrapped as an open letter to the family.

Yishai’s humanity is profound. It demonstrates a sincerity which cannot be described as spin. In his 3-page brief, he has managed to summarise the reports and feelings that I have heard from many soldiers who served during the recent hostilities.

Yishai not only describes in detail how they looked after the premises. His words form a plea to stop the hatred – to realise that all Israelis want to do is live in peace with Palestinians, fostering a mutual understanding for generations to come.

 Yishai wrote:

An Open Letter to A Citizen Of Gaza:

I Am the Soldier Who Slept In Your Home:

By: Yishai G (reserve soldier)

 

Hello,

While the world watches the ruins in Gaza, you return to your home which remains standing. However, I am sure that it is clear to you that someone was in your home while you were away.

I am that someone.

 

I spent long hours imagining how you would react when you walked into your home. How you would feel when you understood that IDF soldiers had slept on your mattresses and used your blankets to keep warm.

 

I knew that it would make you angry and sad and that you would feel this violation of the most intimate areas of your life by those defined as your enemies, with stinging humiliation. I am convinced that you hate me with unbridled hatred, and you do not have even the tiniest desire to hear what

 

I have to say. At the same time, it is important for me to say the following in the hope that there is even the minutest chance that you will hear me.

I spent many days in your home. You and your family’s presence was felt in every corner. I saw your family portraits on the wall, and I thought of my family. I saw your wife’s perfume bottles on the bureau, and I thought of my wife. I saw your children’s toys and their English language schoolbooks. I saw your personal computer and how you set up the modem and wireless phone next to the screen, just as I do.

 

I wanted you to know that despite the immense disorder you found in your house that was created during a search for explosives and tunnels (which were indeed found in other homes), we did our best to treat your possessions with respect. When I moved the computer table, I disconnected the cables and lay them down neatly on the floor, as I would do with my own computer. I even covered the computer from dust with a piece of cloth. I tried to put back the clothes that fell when we moved the closet although not the same as you would have done, but at least in such a way that nothing would get lost.

I know that the devastation, the bullet holes in your walls and the destruction of those homes near you place my descriptions in a ridiculous light. Still, I need you to understand me, us, and hope that you will channel your anger and criticism to the right places.

I decided to write you this letter specifically because I stayed in your home.

 

I can surmise that you are intelligent and educated and there are those in your household that are university students. Your children learn English, and you are connected to the Internet. You are not ignorant; you know what is going on around you.

 

Therefore, I am sure you know that Qassam rockets were launched from your neighborhood into Israeli towns and cities.

 

How could you see these weekly launches and not think that one day we would say “enough”?! Did you ever consider that it is perhaps wrong to launch rockets at innocent civilians trying to lead a normal life, much like you? How long did you think we would sit back without reacting?

I can hear you saying “it’s not me, it’s Hamas”. My intuition tells me you are not their most avid supporter. If you look closely at the sad reality in which your people live, and you do not try to deceive yourself or make excuses about “occupation”, you must certainly reach the conclusion that the Hamas is your real enemy.

 

The reality is so simple, even a seven year old can understand: Israel withdrew from the Gaza strip, removing military bases and its citizens from Gush Katif. Nonetheless, we continued to provide you with electricity, water, and goods (and this I know very well as during my reserve duty I guarded the border crossings more than once, and witnessed hundreds of trucks full of goods entering a blockade-free Gaza every day).

 

Despite all this, for reasons that cannot be understood and with a lack of any rational logic, Hamas launched missiles on Israeli towns. For three years we clenched our teeth and restrained ourselves. In the end, we could not take it anymore and entered the Gaza strip, into your neighborhood, in order to remove those who want to kill us. A reality that is painful but very easy to explain.

 

As soon as you agree with me that Hamasis your enemy and because of them, your people are miserable, you will also understand that the change must come from within. I am acutely aware of the fact that what I say is easier to write than to do, but I do not see any other way. You, who are connected to the world and concerned about your children’s education, must lead, together with your friends, a civil uprising against Hamas.

 

I swear to you, that if the citizens of Gaza were busy paving roads, building schools, opening factories and cultural institutions instead of dwelling in self pity, arms smuggling and nurturing a hatred to your Israeli neighbors, your homes would not be in ruins right now. If your leaders were not corrupt and motivated by hatred, your home would not have been harmed. If someone would have stood up and shouted that there is no point in launching missiles on innocent civilians, I would not have to stand in your kitchen as a soldier.

 

You don’t have money, you tell me? You have more than you can imagine.

Even before Hamas took control of Gaza, during the time of Yasser Arafat, millions if not billions of dollars donated by the world community to the Palestinians was used for purchasing arms or taken directly to your leaders bank accounts. Gulf States, the emirates – your brothers, your flesh and blood, are some of the richest nations in the world. If there was even a small feeling of solidarity between Arab nations, if these nations had but the smallest interest in reconstructing the Palestinian people – your situation would be very different.

 

You must be familiar with Singapore. The land mass there is not much larger than the Gaza strip and it is considered to be the second most populated country in the world. Yet, Singapore is a successful, prospering, and well managed country. Why not the same for you?

My friend, I would like to call you by name, but I will not do so publicly. I want you to know that I am 100% at peace with what my country did, what my army did, and what I did. However, I feel your pain. I am sorry for the destruction you are finding in your neighborhood at this moment. On a personal level, I did what I could to minimize the damage to your home as much as possible.

 

In my opinion, we have a lot more in common than you might imagine. I am a civilian, not a soldier, and in my private life I have nothing to do with the military. However, I have an obligation to leave my home, put on a uniform, and protect my family every time we are attacked. I have no desire to be in your home wearing a uniform again and I would be more than happy to sit with you as a guest on your beautiful balcony, drinking sweet tea seasoned with the sage growing in your garden.

 

The only person who could make that dream a reality is you. Take responsibility for yourself, your family, your people, and start to take control of your destiny. How? I do not know. Maybe there is something to be learned from the Jewish people who rose up from the most destructive human tragedy of the 20th century, and instead of sinking into self-pity, built a flourishing and prospering country. It is possible, and it is in your hands. I am ready to be there to provide a shoulder of support and help to you.

 

But only you can move the wheels of history.”

Regards,

Yishai, (Reserve Soldier)

The Gaza war may have cost Israel around US$3b, but the economy has not collapsed. And yesterday, it was announced that commercial quantities of gas have been found off the coast of Haifa. It could be enough to meet Israel’s needs for decades, as well as help to further a greener energy policy.

So what’s the connection to the Gaza economy?

Step back. Since 1993 and the Oslo Accords, the Palestinian economy has been bolstered by overseas support, particularly from Europe. On average, 25% of the revenue of the Palestinian Authority has come from taxpayers from overseas governments. Although the World Bank has called this the largest support per capita of a population since World War II, there has been little effective accountability and transparency.

The Gaza economy in particular is heavily dependent on agriculture and the public sctor. Unfortunately, the quality greenhouses left behind after the Israeli evacuation in 2005 were soon ruined and became training grounds for military recruits.

Interestingly, despite opposition from the World Bank and Hamas’s animosity with Fatah, it is the civil service payroll that has risen significantly in the past two years. How?  Dr Rachel Ehrenfeld, an expert on the funding in international terror, provides some answers. She notes that:

Despite Fatah-Hamas disagreements, the Palestinian Authority’s Fatah-led government announced on Jan. 15, 2008, its intentions to give Hamas 40% ($3.1 billion) of the $7.4 billion pledged in December 2007 by international donors. In October 2008, despite the crackdown on Fatah members in Gaza, the Palestinian Authority was paying the salaries of 77,000 “employees.” In December 2008, under U.S. and international pressure, Israel delivered between $64 million and $77 million in cash to Gaza.

In the past 2 weeks, Gulf States and UNRWA have promised around US$200m to repair Gaza. Yes, it is needed, desperately so. But will all the money go the the proper destinations? Given past experiences, that must be doubted.

There is an alternative to this economic waste. Step forward and recall what is now known about new gas fields near Haifa. In the summer of 2007, British Gas tried to reach an agreement with the Palestinian Authority to develop proven gas reserves in Gaza. The value to the local economy could be at least US$1 billion.

Since then, Hamas has invested in drilling and digging ……..tunnels, tunnels that smuggle weapons and contraband in order to satisfy their hatred against their enemies. 

Israel is fighting this sad war for two reasons; to protect its society and to recreate a platform for peace destroyed by Hamas.

Internally, Hamas has violated the basic human rights of large parts of the Gazan community. There is overwhelming video evidence, showing its continuous cruelty to Palestinian opponents. The small Christian community in Gaza suffers from consistent harassment. Hilary Clinton and David Miliband, the latter no close friend of Israel, have censured Hamas for its use of children and women as human shields. Even the UN has long failed to confirm that the supplies delivered near daily via Israel are not hoarded by local power brokers.

The cartoonist Steve Breen recently asked, what does Hamas stand for? “Hiding in Mosques and Schools” is the satiric but sad and accurate answer.

Re Israel, the Hamas position is simple. Its charter from 1988 rejects Israel with violent and anti-semitic rhetoric. When Israel withdrew from Gaza in 2005, she left behind a thriving greenhouse industry, now the end point of many Hamas-controlled smuggling tunnels. After 930 days, Hamas continues to hold POW, Gilad Shalit, without one visit from the Red Cross. In 8 years, Hamas and its lackeys have sent nearly 9,000 rockets and mortars into Israeli population centres.

Most of these rockets have been launched since Hamas captured political control of the territory. In the 3 weeks of fighting, over 700 have landed in Israel, a ratio of 1 for 1.5 Palestinians killed in the fighting. (No small proportional revenge there from Hamas). None of the rockets have been targeted at the Israeli troops encamped in the area, but only at civilians.

Israel has 3 options to deal with this vile threat.

a) Do nothing and hope or wait for a ceasefire. That has been done for 8 years. Hamas itself ripped up the summer 2008 truce.

b) Wait for international intervention. The EU border observers left their positions over 2 years ago. Egypt has failed miserably to prevent massive weapon smuggling. Only now do we hear of France, the UK and others trying to work out how to stop the smuggling.

c) Take significant action to stop the violence and thus help get the moderate Palestinians back to the peace talks. That will not be easy nor pretty, but it offers a longer term message of hope for all communities.

If ever the phrase “fighting for peace” had a place, it is in Gaza, January 2009.

If Israel has to fight a war,it must be doing so for two reasons – to protect its citizens and to ensure that the real military threat of Hamas does not resurface in the future.

Israel was established as a pluralistic society. For all the social and military constraints of its past and present, Israel is a vibrant centre for at least 4 global religions (and their internal frictions). It has 3 offical national languages. Non-Jews enter politics through their own party or with others. And thus Israel has built a firm basis for internal fusion.

That is a unique set of circumstances in the Middle East, a democracy worthy of protection. In fact, even as Israel fights its war with Hamas, on the ground, there are numerous coexistence projects moving forward – genuinely working towards a stronger society for all. Here are some brief examples: –

Just recently, under the auspices of the US-Israel Binational Science, 20 researchers, Israeli-Jew, Israeli non-Jew, and Palestinians met in Haifa to discuss potential routes of academic cooperation.

 I-Rox is a software company, operated by ultra-orthodox Jewish women. It is currently developing a medical administration programme for the Palestinian Authority in Ramallah. One off? No – look at g.ho.st, co-owned by an Israeli and Palestinian partnership. As my good friend Lisa Damast has recorded, this shows how two politically diverse groups can successfully cooperate and coexist.

Personnel of the national ambulance brigade, Magen David Adom, come from  all sectors of society. My daughter volunteers once a week, works with Muslims and enters their villages. And this last month was typical of that scenario.

These anecdotes, commercial or otherwise,  are just a few of the large pile of detail that I come across every month. One of the main reasons for their existence is the basic wish of Israel to live with all.

It is that desire and opportunity that Hamas opposes. Through its charter, its hatred and its weapons, Hamas seeks to crush this progress and success.

Israel has spent much of her 60 years fighting wars to protect its existence. Despite these adversities, it is become a global high tech power and has recently joined the OECD.

The war with Hamas provides another example of how Israel’s economy continues to seek growth, despite thousands being conscripted and vast parts of the country under on-going rocket attack.

Here are 4 examples of what I mean: –

  • The Tel Aviv Stock Exchange has risen 6% during the first 9 days of hostilities. It accepts that the country is being run by strong team of economists, dedicated to long term financial stability.
  • In the same period, the shekel has not suffered any major devaluation against the major currencies, primarily for similar reasons to the above.
  • The Office of the Chief Scientist has just allocated another 225 m shekels ( US$60M) of government money to new high tech projects. Or look at LiveU, which has raised US$9 m, and whose TV tech is now helping live news to be broadcast into homes throughout the world.
  • Yesterday, I participated in a networking meeting, where the names of 6 Israeli companies were mentioned, all signing new agreements with overseas partners, specifically in the UK and in Romania.

The point: Invest in peace and growth, not in war machines. The result – optimistic predictions from overseas pundits.

Now contrast this to the economy of Gaza. The Palestinian Authority took over in 1993 under the Oslo Accords. Israel withdrew in 2005, and Hamas came to power over a year ago.

The successful greenhouses left behind by Israel and which received a US$15m from the World Bank are now dust bowls. Hamas has built hundreds of smuggling tunnels, but few houses and there are no bunkers for citizens (as in Israel). Ad-hoc factories for producing Kassam rockets have emerged throughout the region, but there is no attempt to create a civilian manufacturing base.

And so the Gaza tragedy goes on.

War is terrible for all sides. Israel should be recognised for taking the courageous decision to defend her citizens. Its economy will probably emerge from this period of turmoil without too many battle scars.

And here is a central lesson here for Israel’s neighbours in society building. Wealth creation does not come via exporting hatred.

Hamas’s war with Israel directly impinges on the lives of 0.5m civilians. Add in battalions of regular soldiers and reservists, stationed in the region. And more are being rushed to secure the north, against a possible reprisal attack from Hizbollah in Lebanon. Maybe 15% of the population has been sucked in to the horrific scenario.

In Gaza, the makeshift Hamas society, based on smuggling and repression, is imploding under the weight of Israel’s attacks. Many basic services are not functioning with the leadership suspected of hiding in mosques and hospitals.

Israel offers a different approach, where as far as possible life goes on normally.

What do I mean? Take a large food distribution company, which I visited on Thursday. Located near the port of Ashdod, where many rockets have landed this week, its 550 workers are continuing to clock in. The company is also making a special effort to distribute special parcels to families directly in the line of fire. And that is no one-off story.

In Tel Aviv, the stock market has ticked along, actually rising 5% this week despite the hostilities. I have heard of at least one finance house organising deliveries for citizens living under the Kassams sent from Gaza.

Ashkelon’s Sapir Institute for Higher Learning has been forced to close its classrooms. Some of the students have put together an ad-hoc local radio station, broadcasting mesages of support to affected communities.

It is self-help. It is mutual respect.  A Druse soldier was killed by a rocket and many went to the funeral. The city of Jerusalem has organised for whole families from the south to be hosted locally for a few days. And so the list goes on.

Hamas has deliberately refused any partnership with Israel’s way of life. Israel’s society is now 60 years old. It has emerged out of the depths of struggle and human despair, yet evolved, for all its faults, in to a showcase of pluralism.

The war against Hamas is not just aimed at protecting Israel’s special jewel. The conduct of the home front during the war helps to show off its success.

The world never acknowledged it, but 8 years ago Hamas launched a war against Israel. Since then, it has fired over 8,000 Kassams, grad rockets and mortars against the Holy Land.

For all the complaints of the world over Israel’s military actions, nobody has offered an alternative. No authority has seriously taken Hamas aside and punished the schoolboy for consistently breaking the rules of humanity; POW imprisonment with no Red Cross visitations, firing at civilians, harassing Christians, using kids to dig tunnels, the murder of Fatah members, etc – all documented with evidence.

For once, Israel has responded, and in force. Yes, it is war and it is not pretty. The number of Palestinian killed is close to 400. (Ironically, the figures are similar to those slaughtered this week in the Congo, although the UN and the world press are keeping silent there.) Israel is winning for now. And although she does not have to apologise for success, just because she has better weaponry, neither is she celebrating.

Why? Because Israel knows what suffering is. Twenty years ago, many were afraid to visit Jerusalem, following the violence of the first Intifada. In 1991, there was a nightly exodus from Tel Aviv, as citizens fled the nocturnal scud attacks sent by Saddam Hussein. In 2000, the second Intifada rocked Jerusalemites again. And Druze, Jew, Christian and Muslim communities suffered as one from the inhuman barrage directed at them by the Lebanese Hizbollah in 2006. And now it is time to protect the south communities.

But it is more than that. When you think about it, beyond the standard rhetoric, Israel is showing that it believes in the sanctity of life and in protecting the right of the individual to live in peace. It is making a very painful stand to protect the basic human needs denied to so many by Hamas.

There is no joy in Israel’s streets. My friends do not go round yelping as the numbers tot up. This is not an issue of revenge. Contrast these reactopns to films and newspaper reports of Hamas-led celebrations, when their ammu has hit its mark in the past.

Israel has a proven track record at peace conferences. The Palestinians, and especially Hamas, have yet to show a proper understanding of that game. that is the heart of the problem.

Hamas still seeks the physical removal of Israel from the world. It constantly broke a ceasefire with Israel, attacking population centres. People in Gaza are now having to accept the consequences of actions taking by a Hamas leadership, motivated by hatred and not peace.

Let us hope and pray that in 2009, more leaders in the Middle East will realise that emnity only produces bloodshed and not peace.

As the world concentrates on the Israeli air forces efforts over the skies of Gaza, analysts are asking if the campaign will divert scarce resources away from pressing economic needs.

Consider the size of the issue. According to new IMF figures, Israel’s annual GNP (what she produces) per person stands at US$24,000. (Saudi Arabia – $21,220; UAE – $56,670).

The Tel Aviv stock market has dropped 1.5% in its first response to the campaign. Reservists are leaving work stations and putting on uniforms. Places of entertainment and tourist attractions in the south are empty. All this in light of a poor global economic outlook. And yet…..

Over the past decade, Israel’s economy has coped with an Intidfada, withdrawal from Gaza, wars in the north, and more. Until recently, growth remained around 5% per annum. In effect, Israel’s neighbours have forced her to develope a virtual technology for its economy. This allows the country to find success despite war rather because of peace.

If you are a high tech geek, you may call it a perverse form of search engine optimization technology – looking for a way through the clouded cyber space of war.

Specifically, regarding the events in Gaza:

  • Yes, industry in the south is winding down. There again, nearly, 8,000 Kassam rockets and mortars have landed in the region over 8 years, so these companies have been on a reduced footing for a long time.
  • Hotel bookings around Ashkelon are down (except for journalists). Again, I openly admit that people like myself have long stayed clear of Ashkelon for family holidays. So not much change there.
  • Aside from one-person businesses or SMEs in general, most organisations will continue to functions, especially in the Israel’s commercial centres further to the north.

The future? Who knows. Certainly reduced economic activity to begin with, but no disaster. Much will depend on the length of the military scope and the potential horrors that Hamas have threatened to launch against Israeli civilian targets. And it is a threat not to be underestimated.

For the moment, Israel’s economy looks to be safe and under good management.

I have spent the last few days sending out Christmas greetings to my business colleagues overseas. A few cautiously ask me: “Well, what’s it like for people like themselves in the Holy Land?” – They meanwhat’s it like for Christians, .

Fair question, and I did some research. It turns out that Israel is probably the one country in the Middle East with a growing Christian population. It comprises about 3% of the overall total, mainly from the Eastern Orthodox groupings.

In the West Bank, there are about 46,000 Christians and a further 300 in Gaza. Israel is making special arrangements for this small community to visit Bethlehem during Christmas.

The hotels around Bethlehem are expected to be full this Yuletide. 60,000 visitors will make their way to Bethlehem and Nazareth over the next 2 weeks. Taking 2008 as a whole, tourism has nearly doubled, specifically amongst pilgrims.

You can see how the government has targeted this sector of the tourist trade. For example, the Ministry of Tourism and other partners have invested over US$2 million in the Qsar el Yahud Baptism site on the River Jordan. Coaches driving around jerusalem are another example of this success.

In parallel, Civil Administration is striving hard to rid itself of a poor image. It has actively supported the export of wine from the Cremisan Silesian Monastary near Bethlehem. Passage around the holy sites is being made easier almot every week, despite on-going security concerns.

For Christians, it must be a truly spiritual event to celebrate Christmas, wandering amongst the names and sites usually only known through stories heard in school plays. The truth is that this special moment is open to all Christians, and every new visitor helps to strengthen the new-found peace around Bethlehem and Manger Square. It is up to all members of all religions to protect this progress.

Thursday morning. 6.30am. I am sitting quietly in my kitchen, when the radio announced another Kassam alert in the Sderot region. Hence began the last day of a 6 month ceasefire, when Hamas and its allies have launched 236 non-guided rockets and mortars into Israel.

Move forwarded another  two and half days. As my peaceful Sabbath ended, my mobile beeped a message at me. 10 rockets and 24 mortars had been fired on the day of rest. The targets – Bedouins, Jews, tourists, whoever was in the path of terror.

This has become a humanitarian problem! Over the past few years, over 20% of Sderot’s population have been fled. Trauma levels became intolerable a long time ago. The papers show pictures of kids running in to schools, escaping the path of the deadly weapons.

Yes, during the truce, Israel has responded sporadically. So, is there a difference between the two sides? Well consider these facts.

Christian communities. In Jerusalem, the municipality has been handing out Christmas trees to the needy. In Gaza this year, the American school and the YMCA have been bombed, and the culprits have not been apprehended. Strange, as hamas controls the region with an iron fist.

Prisoners. Last week, as part of a good will package, Israel released around 230 Palestinians prisoners, all of whom had received constant Red Cross supervision. Hamas holds one prisoner, Corporal Gilad Shalit, who has spent over 900 days in captivity, without one visit from any overseas go-between.

Protests. A quick search will find a myriad of  overseas bloggers, resident in Israel, whose writings strongly oppose the country. In Gaza, the distribution of newspapers such as Al Ayyam and Al Hayat al Jadida are prevented. they do not support Hamas opinions.

Pilgrims: The New York Times reported that Hamas refused to allow 2,000 pilgrims to join the Haj pilgrimage. In parallel, Israeli authorities are working even closer with the Bethlehem municipality to ensure that Christians are able to visit the holy sites over Christmas….And so the list goes on.

Before the truce ended, Israel sent a high ranking envoy to Egypt to see if the agreement could be extended. The Hamas leadership made an announcement, carried on the international media, that such a deal was not on offer.

Would you allow a “peace” like that on your borders? Is that the kind of future you want for the Middle East? What will make Hamas learn that this is not the way to bring quality of life for any of the people involved?

Depending on how you look at it, Israel devotes up to a third of her resources to defending the country. In the past decade alone, Israel has fought an on-going was against internal Palestinian terror, fought a war in Lebanon, had to prepare for the Iranian threat, and more.

Contrast all that (+ the fall out from the Millenniumeconomic bubble  burst) with the fact that Israel’s economy has grown approx 5% pa on average since 2002. Staggering by most standards. As a mark of its success, in 2008, Israel was accepted into the OECD and the Financial Times upped its recognition of the Tel Aviv Stock Exchange.

Usually, peace leads to prosperity. An explanation for the dichotomy? In May 2007, CNBC  ran a series on the Israeli economy. A leader in formulating world economic opinion, the TV channel concluded that Israel has developed a strong model for economic growth, despite war rather than through peace.

How so? Well, some of Israel’s first high tech giants like Elbit were effectively spun out of the local defence establishment. Since then, if the current global industrial revolution is IT based, Israeli tech is a central part of that recent history. By way of proof, just look at the components in your mobile phone or the microchip enabling you to read this. All this coupled with massively improved fiscal and monetary policies from central government.

Israel’s economic joy of this decade has been led by technology transfer. It has been supported by arms sales (also tech based), real estate and the diamond industry. The inevitable consumer boom was the result of and not the trigger for the success.

So what is the effect on Israel’s economy of Palestinian and Hizbollah terror? I can identify 3 specific sectors.

1) SMEs – when people are called for reserve duty, it is the small enterprises which suffer the most. This was shown in stats after the 2006 Lebanese war, as individuals were called for 30+ days of service.

2) Certain regions of Israel suffer more from Palestinian terror. For example, in the south there is a refugee issue as one third of Sderot’spopulation have fled the constant shellings from Gaza. For example, despite the ceasefire, over 200 rockets and mortars have been launched since November 4th.

3) As resources are devoted to the defense sector, health, education and other social services are pushed way below recognised red lines. Only this week, yet another report was released showing how standards in maths and other subjects have dived again in high schools.

As a parallel, I leave my final word for the Palestinian economy: According to World Bank figures, it grew 5.5% annually from 1968 to 1999, just before  Chairman Arafat launched the second Intifada. In effect, once the Palestinians had been freed from Egyptian and Jordanian rule, Israeli support handed them one of the fastest growing economies internationally for over 2 decades. Today…..well, that’s for another posting.

With less than 3 weeks to go to Christmas, what does the annual countdown mean for Bethlehem? Overseas, the talk is about the remaining shopping days or holidays. In our part of the world, Bethlehem has sadly slid into the drain of the Middle East conflict.

Speak to Israelis and they will quote you how thousands of Christian residents have been forced to convert to Islam or lost property rights since 1993 and the Oslo Accords. Proponents of the Palestinian cause cite harassment by Jewish settlers or blockade of commercial goods.

I have found that the truth often rarely sticks to political spin. There are definitive analyses as to how the security fence has benefited Christians in the West Bank. When I see Palestinian leaders attending Midnight Mass in Bethlehem, I wonder why they need to sacrifice themselves to the cameras, exploiting such a holy occasion.

On a very personal level, I look at Bethlehem very differently. I recall how I used to shop there, like many residents from southern Jerusalem. It was nearer and cheaper than the obvious alternatives.

I remember taking tourists round the Via Dolarosa in Jerusalem’s Old City and then driving 15 minutes into Manger Square. And we could walk around the Church, without interference from security forces of one kind or another. Bethlehem signified..well, an open way of life, peoples of all religions coming together.

Just how much has Bethlehem changed over the past 15 years? Today, Bethelehem is a Muslim city, controlled by the Palestinian Authority. My kids cannot fathom my simple anecdotal stories.

So consider this: The next time you read about Bethlehem, imagine how differently the article would have read if the ruling politicians would stop interfering and the extremists would desist from exploiting frail religious emotions.

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