East Jerusalem Businessman calls for more investment in Palestinian (East) Jerusalem

The Palestine Investment Conference – planned as a major component of the Annapolis Process – is taking place in Bethlehem from 21 through 23 May.

The American administration — and Quartet Envoy Tony Blair, known as “America´s poodle even when he was Prime Minister of the United Kingdom — apparently still believe that encouraging investment in Palestine on the eve of state-creation would help jump-start the suppressed Palestinian economy and create enthusiasm for potential peace dividends.

But the situation has not developed as expected. The Annapolis Process is nowhere near where it was supposed to be, when the Investment Conference was proposed.

Nor were preparations for the Conference, but they were not too far off. Palestinian security officers and police men and women were liberally deployed in downtown Bethlehem – though many of them were brought in from elsewhere. One policeman apologized for not being able to give directions because, he explained, he was from Jericho. The electricity went off in the Media Center set up in the Jacir Palace Intercontinental Hotel, after the opening press conference, but a generator took over after some seconds, and the electricity was restored after several minutes.

Workers were putting final touches on a new Conference Center in Bethlehem up to the start of the Investment Conference, which had been constructed but left unfinished when economic conditions in the West Bank steadily worsened in the recent period. The Conference Center was built by the vastly-successful Athens-based company started decades ago by Palestinian refugees from Israel´s establishment in 1948, Consolidated Contracting Company (CCC), whose senior officials are participating in this week´s Investment Conference.

Hassan Abu Libdeh, head of the steering committee organized by the Palestinian Authority for the Conference, told journalists in Bethlehem just hours before the Conference´s official opening on Wednesday that he and his team had been given just 80 days to pull it off.

He said that registration was still open, but some 1,200 participants were expected – including, apparently, a large media contingent. Palestinian proposals for projects worth some $2 billion are being presented at the Conference, and a number of deals are ready to be announced on Wednesday and on Thursday, he told journalists.

Despite widespread skepticism, the Palestinian Authority – and a number of other Palestinian citizens – are putting on a brave face and trying to make the Conference a success. Palestinian President Mahmoud Abbas addressed the opening plenary on Wednesday afternoon, along with Sheikh Muhammad Bin Hamdan Al-Nahyan, and Quartet Representative Tony Blair, as well as the U.K. Secretary of State Douglas Alexander, the Swedish Minister of Trade Ewa Bjorling, U.S: Deputy Treasury Secretary Robert Kimmit, Russian Deputy Minister of Foreign Assistance Alexander Saltanov, and the Deputy-Director of the Middle East and Africa Bureau in the Japanese Ministry of Foreign Affairs Shinsuke Sugiyama, among others.

AP has reported that Palestinian Prime Minister Salam Fayyad believes the Conference is “our way of asserting our presence …We are doing what we can to change reality”.

AP has also reported that Palestinian-American businessman Sam Bahour, who lives and works in Ramallah, said: “The common sense way is not to jump through hoops, but to end this occupation and let the private sector develop naturally”.

Bahour, who is also an activist in the Campaign for the Right of Enty/Re-Entry to the Occupied Palestinian Territory (oPt), a grassroots campaign “for the protection of foreign passport holders residing in/and or visiting the oPt”, In a statement issued by the Campaign, Bahour said that “the threat of being barred from entering the occupied West Bank by Israeli officials is likely to be foremost on everyone´s mind. Those hoping to actually invest in Palestine will be looking for answers regarding who will guarantee unhindered access in the future for themselves, their staff and the suppliers needed for investments to succeed in the occupied Palestinian territory (oPt) … Contrary to international law, Israel continues to exercise its control over entry and residency in the oPt in an arbitrary, capricious and political manner that seriously harms Palestinian economic, social and cultural life … Investors expecting future access to their investments are unlikely to have the U.S. Administration, the Quartet, and Quartet Special Representative Tony Blair regularly available to negotiate entry visas for themselves or for their staff”.

At the Conference pre-opening press conference, Abu Libdeh said in response to a question from a journalist that the Palestinians have “commitments from the Israelis to issue visas, the necessary multiple-entry visas, for businesspeople who want to invest – and to apply what is in the Oslo Accords”
PA Civil Affairs Ministers Hussein Ash-Sheikh indicated later to journalists that the Israelis have apparently agreed to allow serious investors a temporary one-year residency, leading to possible permanent residency and even the eventual issue of a Palestinian passport for those who invest in Palestine and who also successfully pass a preliminary residency period. Of course, until now, having a Palestinian passport would automatically eliminate the possibility of traveling in and out of the area via Israel´s Ben Gurion international airport – and that the only way in and out of the West Bank would be via the Allenby Bridge, a usually-difficult experience.

In response to another question, Abu Libdeh said that 137 businesspersons applied for permits to come to the Conference from Gaza – and of those, 108 travel permits were actually granted; 105 Gazans have actually managed to get to Bethlehem so far; 6-8 applications were rejected; and no answer was given for the rest. 300 businesspersons of Palestinian origin (mostly living in Jordan and in the UAE) were given entry permits, while only a few – actually, “less than 50” — were refused.

Maan News Agency also reported on Monday that Palestinian civil society organizations “have criticized what they called ´attempts to use the Palestinian people as a bridge … between the Arab world and Israel in the form of normalization´. They were referring to the Palestine Investment Conference to which is scheduled to begin on Wednesday in Bethlehem. The network of Palestinian civil society’s organizations and the federation of Palestinian charities as well as lawmakers Khalida Jarrar from the Popular Front for the Liberation of Palestine (PFLP) and Mustafa Barghouthi, the secretary general of the Palestinian National Initiative signed a joint statement saying: ´Speaking of industrial zones which the Israelis determine their location and legality will only serve the Israeli interests instead of solving the dominant unemployment problem amongst the Palestinians´.” According to the statement, ´the creation of an illusionary notion that there will be a peace agreement which will improve the economic situation´ will only deepen the feeling of frustration amongst the Palestinian people”.

Since the exchange of recognition between Israel and the Palestine Liberation Organization (PLO), and the launch of the Oslo Process, in 1993, donors – European, American, Japanese, and Arab — have thrown billions of dollars in aid at the Palestinians.

Some of it, aid organizations say privately – and sometimes even publicly — has simply gone down the drain.

This massive influx aid was intended – and was received – as a major incentive to both Palestinians and Israelis to make progress in negotiations. However, as their differences deepened, this money, probably inevitably, became both a carrot and a stick.

Massive Israeli military reprisals have often resulted in the great damage to the donor projects. And then what happened? The donors paid again, the projects were rebuilt in many cases – and then, in some cases, destroyed yet again.

In addition, financial chaos resulted after the American and European decision to withhold money from the Palestinian Authority after Hamas won the majority of parliamentary seats in a January 2006 election.

Donors have simply continued to supply more money – though more selectively, and conditioned on good behavior – investors have taken a very different and perhaps more fiscally prudent approach.
Donors pledged $7.7 billion in aid in December in Paris to the Palestinians over three years, though apparently not all of the pledges have actually been delivered.

Some of this money is apparently going to pay the costs of this Palestinian Investment Conference… Hassan Abu Libdeh, head of the steering committee organized by the Palestinian Authority for the Conference, told journalists in Bethlehem just hours before the official opening on Wednesday that the cost of this event was $3 million – about half of which was being covered by the event sponsors, who include American private companies Cisco, Coca Cola, Marriott, and Booz, Allen, Hamilton, as well as the British Development Agency (DFID), and Intel. The other half of the cost, Abu Libdeh said, is being paid by the Palestinian Authority directly.

Donor aid, of course, is very different, in both its aims and its intentions, from investment – which involves a sharing of both the risks and rewards.

And, one of the main question marks hanging over this Palestine Investment Conference is why, if investors – Palestinian, Arab and other – have not been willing to risk their money in the Palestinian territories for the last 12 years, would they be willing to do so now, when the situation looks grimmer than ever?

Donors pledged $7.7 billion in aid in December in Paris to the Palestinians over three years, though apparently not all of the pledges have actually been delivered – Condoleeza Rice made a recent appeal in the London meeting of donors early in May for promises to be paid up.

An apparently small amount — $1.5 million – will be going to pay the costs of this Palestinian Investment Conference. Abu Libdeh said at the pre-opening press conference on Wednesday that the cost of this event was $3 million – about half of which was being covered by the event sponsors, who include American private companies Cisco, Coca Cola, Marriott, and Booz, Allen, Hamilton, as well as France´s Alcatel, and the British Development Agency (DFID). The other half of the cost, Abu Libdeh said, is being paid by the Palestinian Authority directly – presumably with donor help.

Sami Abu Dayyeh, Managing Director of the Ambassador Hotel in East Jerusalem, was initially sceptical, but finally agreed to participate in the Palestine Investment Conference. Here’s how he explained this turn-around:

Q: Sami, you are scheduled to speak at the Palestine Investment Conference on a panel entitled “Investing in Palestine´s Treasures – A Discussion of Tourism Sector Opportunities”. What are you going to say?

A: Well, I´m going to expose the importance of the Palestinian territory and the future state for the religious market, how important it is, and also to encourage people to invest in the territories that we are directly controlling, because I think tourism will be our main income for the future, and this is something that we have to develop ourselves and invest – not in mega-projects, but small to medium size that we need to control rather than the projects themselves controlling us.

Q: I know that you´ve hesitated about participating in the Conference. Can you tell me why you hesitated, what your objections are, and why you changed your mind?

A: OK, my hesitation actually is not only talking to people – you know, talking to people is not a problem for me. But to present a project that I have in Jerusalem, I´m hesitant to present at that particular Conference for a simple reason: if our own people are not part of this, how could I ask somebody from abroad to be part of it, when all the Palestinians who are here to invest, they are not willing to discuss it or to go through further discussion with me on it? That´s the reason why I was hesitant. But, as a speaker, I´m going to try. I will talk. I will encourage people. I will tell them how good it is. But, with projects I prefer that our own people would have been involved somehow with the project that I have in Jerusalem. It would have made it even better for the people abroad to see that investors from the Palestinian side are also putting money also, over and above my own investment.

Q: Why are the Palestinians not putting money into such investments?

A: That´s a question which is puzzling. It´s a good project. You know, we talk about Jerusalem, and how important Jerusalem is for us in the long run, and yet, where is the money? Where are the investments? I´m not asking for alms or support, I want people to invest in something I´m investing my own time and money in.

Q: The tourism business, as you said, is very sensitive to politics, and group travel fell off when people felt threatened. But have you had other problems doing business here in East Jerusalem?

A: Um, not really. It´s just only lack of infrastructure. Of course, the Israelis are not doing much for East Jerusalem. They have their own agenda. But it´s our, also, duty for us to invest in Jerusalem. This is why, I think, I wouldn´t keep on blaming the Israelis for all the problems of East Jerusalem, even though it´s their policy [which is causing problems]. But there are things that are in our hands, and it´s up to us to develop. The lack of capital on the Arab side is a problem, because even those who had money, they didn´t invest it in Jerusalem, unfortunately, they took it out, because of the taxation system that our people are not aware of, and they are not used to paying taxes, or to pay the high city tax (arnona). All those things are a handicap in our mind. So, it is a problem. And also, too, the Israelis are controlling the permits for building. Only in the last ten years they made it possible for us to think of developing our side. It´s just only the time – the Intifada didn´t help us to do it correctly. The permit for the land, you know, I could have started with the project on the land in 2001. But, of course, with lack of funds, and the situation wasn´t encouraging, I kept on delaying it. But I´m ready now to reinvest – though I don´t want to put all the money by myself. I need a partner who will be willing to invest with me on equity. I don´t want anybody to give me loans. Again, to build a project in Jerusalem, it has to be over 80% paid up cash, and maybe then the rest maybe we can go through bank loans. But I wouldn´t dare to make big loans on a project for Jerusalem, because of the uncertainty of the future, the political risks.

Q: With the talk of dividing Jerusalem and making part of East Jerusalem the capital of a possible future Palestinian state, how do you see this area – Sheikh Jarrah, and Salaheddin Street – positioned?

A: Oh, it´s a gold mine, by all aspects. We are talking about the best location of Jerusalem. All the consulates are around here. It´s very close to Mount Scopus [where the Hebrew University is situated], Mount of Olives. It´s a clean area, it´s not crowded population-wise. So, you are talking about the best location in East Jerusalem, and it should be developed. OK, somehow I agree that it should not be heavily populated, just to keep the place as clean as possible with the least population. But it should be developed, at least, to make projects which will generate income for the rest of East Jerusalem people. Because, if we are to stay in Jerusalem, we have to create jobs. And tourism creates jobs. And this is something that we should all be sensitive towards.

[Sami later said that the Ambassador Hotel and the Ritz Hotel now support about 120-150 families of their employees, while the new project could support a minimum of 100 families, or 150 in extremely good times.]

Q: Do you think that more money should be going to East Jerusalem now than to the West Bank or Gaza?

A: Well, by logic, it should be more money coming to Jerusalem, because it´s the heart, if not the head, the everything, of the future Palestinian state. They talk about it – at least, they give us this impression, even though sometimes I have my doubts, because they never invested, and they´ve never done anything for East Jerusalem, only just branding it, making it a big brand – you know, East Jerusalem, the capital of the future Palestinian state. But, actually, nobody did anything up till now to help the locals to survive. They´ve been giving money here and there, but nothing to create jobs. And for us, it´s the economy that will make us survive, nothing else. We can be nationalist till Kingdom Come, but that will not give us bread on the table.

Q: By “they” you mean the Palestinian Authority?

A: Of course, the Palestinian Authority. It should be the Palestinian Authority, it should be Palestinian investors, it should be anybody who is concerned about Jerusalem. So far, nobody did anything. And this is something that bothers me. As a Palestinian, living in Jerusalem, making my money in Jerusalem, on my own I could do it, you know, and so on. But for the rest of the city, I didn´t see any support, coming from anywhere.

Q: What do you think are the chances for this conference, the prospects – do you know who´s coming. Do you have an optimistic perspective on the outcome?

A: Well, I don´t know. I haven´t been really asking too many questions, who´s coming who will be coming…but I hope that those who are coming will be concerned enough to invest in Jerusalem, whether it is for financial, or for our existence, it is a very important part of our future. Money should be spent in Jerusalem. Money, you know, I mean we take it for granted, Bethlehem, Jericho, Gaza, anywhere else, that we will do something. But the heart should be here. We should start from here and spread out. Maybe that might not be as easy as in the West Bank, but we should try before we complain, we should try. Because this is our heart and this is where we should be starting from.

Q: This conference originated as part of the Annapolis Process, and it was thought that the process would be rather further along than it is right now. Do you think it´s kind of crazy to go ahead with the conference as things stand?

A: I hope it will be worthwhile. From the beginning, I wasn´t encouraging it, to tell you frankly, because I didn´t see the political process going in the right direction. But now that it is happening, we might as well try. Disappointments wouldn´t discourage those who are trying to do something. After all, we have to give them a chance. Maybe, if they will succeed, that will be good for everyone. But, we have to be realistic, and think that no miracles could happen overnight. We have to fight for it.

Q: Today, there was a statement made by Mustafa Barghouti and Khaleda Jarrar, saying that this conference was or would be deceptive, and that it was urging normalization under occupation.

A: Well, we can always complain. We have to fight for it.

Q: Today, there was a statement made by Mustafa Barghouti and Khaleda Jarrar, saying that this conference was or would be deceptive, and that it was urging normalization under occupation.

A: Well, we can always complain. You know, I´m beyond this thing. I don´t think it´s worthwhile to discredit anybody when they´re trying. At least they are trying. But, you know, normalization – what is it for us? We have nothing, nothing, other than big hopes, only, and if we lose hope, believe me the situation will be worse.

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