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Future Uncertain for Battered Palestinian Businesses


Palestinians are expressing hope the easing of Israeli travel restrictions in the West Bank and Gaza will help revive their battered economy. Most people say their survival depends on reviving the peace process.

The Palestinian Authority estimates Israeli closures and travel restrictions in the West Bank and Gaza are costing the economy several-million dollars a day in lost sales and bankrupted businesses. Israel's closures are keeping 100-thousand Palestinian workers from jobs in Israel. More than half the Palestinian labor force of 1.6 million is out of work.

Mahdi Abdul Hadi, chairman of the Palestinian-Academic Society for the Study of International Affairs, says more Palestinians are living on the edge of poverty. "There is no Palestinian economy," he said. "There is no money. There is poverty. People are penniless, jobless, hopeless and reaching despair. Uncertainty lies ahead."

Since the latest cycle of violence erupted 15-months ago, Israel has increased its closures, roadblocks and other travel restrictions between Palestinian towns and villages, and between the West Bank and Gaza.

Hanna Siniora is chairman of the Palestinian-American Chamber of Commerce. He says the measures have devastated internal Palestinian trade. "The whole business sector is bearing the brunt," he explained. "We still have to pay taxes. We are unable to market our products. To go from the West Bank to Gaza is almost an impossibility right now, and each city is sometimes isolated from the villages around it. East Jerusalem," he added, "is suffering the most. East Jerusalem used to live on the villages around it. By isolating East Jerusalem from the West Bank, 50-percent of this business has disappeared." Mr. Siniora says the sharp downturn in the Israeli economy and decline in tourism also have hurt East Jerusalem's shops and businesses.

Neshan Balian runs the Palestine Pottery shop that his grandfather established 80-years ago. He says Israeli customers accounted for 60-percent of his sales. "We were hurt by the lack of Israelis coming to the pottery, he said. "With the situation they are afraid to come to East Jerusalem even though we are not in the middle of East Jerusalem or the West Bank. We are just by the American Consulate, and it is a very secure area. But still, there is a mental obstacle. The wall of '67 is out, but there is still a mental barrier."

But Mr. Balian, like many other businessmen, refuses to give up. "We have been here since 1922, he explained. "It is not a grocery shop that I can just close up and leave. A lot of tradition - my grandfather, my father. A lot of history. So it is not an easy decision. Unless bombs start falling around the factory, we're still here." To survive, Mr. Balian has cut work hours for his artisan employees and sought alternative ways to market his hand-painted ceramics. "On the Internet," he said, "it has been two or three-months since we just started this website and we are getting a lot of feedback and some orders coming through."

Hanna Siniora of the Palestine-American Chamber of Commerce says he is organizing delegations to attend trade shows in the United States to promote two-way trade. But he acknowledges that investors' confidence is waning, even among investors outside Palestinian-controlled areas. "Arab-Americans are investing in a situation where there is a 50-million dollar fund for investment," he observed. "The problem is that most of their investments have been frozen as a result of the situation. The present condition of siege and closure is not allowing these Palestinians or Arab-Americans or Gulf Palestinians of Gulf Arabs to increase their investment."

Palestinian businessmen and investors agree it is hard now to forecast their economic futures. As one executive puts it, long-term planning anywhere else in the world is measured in years, but for Palestinians, long-term planning is measured in days.

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