August 27, 2009 / 9:55 AM / in 8 years

West Bank's foreign businesses - keen but frustrated

RAMALLAH, West Bank (Reuters) - Western-educated Palestinian businessmen in the occupied West Bank say obstacles to sustainable development are as great as ever, despite Israel’s easing of restrictions on movement.

This small group of entrepreneurs with foreign passports came to the West Bank to help develop its economy.

They say there is investment worth millions of dollars waiting for a green light, but hesitate to give it.

The goal is an economy independent of foreign aid and Israeli control. But most agree that by these measures things have actually got worse in the past year.

Sam Bahour, a Palestinian-American who runs a consulting firm in the West Bank, had to take a Palestinian identity card this spring, foregoing his privileges as an American citizen.

Bahour had operated for 13 years on 3-month Israeli tourist visas. But Israel has changed the rules and now denies them to people with West Bank ties, issuing one-month visas for the “Palestinian Authority Only” for foreigners entering the West Bank from Jordan. This visa does not let them enter Israel.

In some cases the business people are simply denied entry.

Almost all Palestinian businessmen with foreign passports face this problem. Some interviewed by Reuters said they were planning to move investments abroad rather than run the risk of being suddenly barred from returning to their businesses.

Bahour said he had lost half of his business, which was in Israel, because he is no longer able to enter the country without a permit, which is temporary and difficult to obtain.


Bashar al-Masri, one of the biggest businessmen in Ramallah, says the new policy makes it hard to bring in new investors.

”Palestinian businesses need a fresh infusion of cash. And it’s there, waiting on the sidelines, from Palestinians who did well in the Gulf, or in the U.S. or Latin America.

“But then we can’t get them visas, not to mention the humiliation they go through in the way they are treated at the border. All of that turns off investors,” he said.

As for the coastal Gaza Strip, where 1.5 million Palestinian live under Israeli blockade, it is virtually a lost market to the expatriate businesses, more than one of which is now paying Gaza employees to do nothing.

The almost inaccessible enclave is run by the Islamist Hamas group, which rejects peace with Israel and is ostracized by the West for its refusal to foreswear armed resistance.

In the West Bank, their main worry is unpredictability: the Israelis can ‘pull the plug’ on access, materials, power and other resources whenever they want.

“No economy can be sustainable that way,” says Khaled al-Sabawi, a Palestinian Canadian who runs a geothermal energy company in Ramallah.

Sami al-Sabawi, who manages a real estate development company, says almost all growth in the West Bank is confined to Ramallah. That leaves people like him reluctant to consider projects elsewhere in the West Bank viable investments.

“Ramallah does well because Israel and international donors want it to,” he said. “It’s not a true indicator of growth.”

The phenomenon highlights a growing problem of the West Bank economy -- its distorting dependence on international aid, donors and assistance agencies of all stripes.

Khaled al-Sabawi complains that he has to compete for skilled manpower with donor projects, and is losing out.

“There are engineers I’d like to hire, but can’t because they’ve been hired by donor agencies like USAid, which pay higher salaries I can’t afford now,” he said

Editing by Douglas Hamilton and Robert Woodward

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