Israel has said it wants to boost the economy of the Palestinian territories as a way to bring peace.  The Israeli leadership has not implemented any specific plan to improve economic conditions, yet the territories are experiencing a marked economic upturn as a halt in violence leads to increased trade and investment. 

West Bank's economy 

Afaf Rahal, a Palestinian schoolteacher, shopping in Herbawi department store in Jenin, 30 Jun 2009

A woman in Islamic veil, speaking in Arabic, has a gleaming smile as she explains she is having trouble deciding on which dish set to buy.  She browses through a glitzy showroom boasting European and American brands in a scene that might appear to be a shopping mall in Dubai, Qatar, or New York.  In fact, it is Jenin, in the West Bank.

The town until recently was known as a bastion of suicide bombers.  But now, with this brand new million-dollar department store, and a shopping mall in the blueprints, Jenin is becoming a haven for shoppers for women like Afaf Rahal, a Palestinian schoolteacher.

She says when she used to go to Amman and other places, she would hope that Palestinians would one day build a department store like this in the West Bank.  She says she thanks God her expectations have been exceeded.

The Herbawi department store in Jenin, which was built with Arab investment, is part of what analysts say is a boom that is occurring in the West Bank despite the global slowdown. 

They say the reason is security conditions have improved, allowing the wheels of commerce to turn. 

Israeli-Palestinian trade improving

Ofir Gendelman, the head of Israeli-Palestinian Chamber of Commerce and Industry, in Tel Aviv, 30 Jun 2009

Ofir Gendelman heads the Israeli-Palestinian Chamber of Commerce and Industry in Tel Aviv - a new organization set up as trade grows between Israel and the Palestinian territories.
 
"It is way quieter now in the West Bank than the way it used to be even six months, or 12 months ago," said Gendelman.  "It is totally quiet.  No terrorist attacks, nothing.  The Palestinian security services are doing what they can to prevent attacks and, of course, the Israeli army is doing what it has to do.  At the end of the day, when there is quiet, when there is security, the economy will flourish and this is what we see."

Construction projects can be seen just about everywhere.  The town of Ramallah is preparing to open a newly-built five-star hotel, the result of European investment.

Improved security has led the Israeli army in the past year to remove more than 140 checkpoints, allowing for the freer flow of people and goods in the West Bank.

The hope on both sides is that trade, which reached $4 billion last year, will continue to grow, generating jobs and prosperity.  

Can economic prosperity bring peace?

Newly-built five-star hotel soon to be opened in Ramallah

But there is a long way to go before trust is established.  Palestinians say other checkpoints continue to exist, blocking access to jobs and business opportunities for many.  Many Palestinians complain they cannot access the markets of Israel's $162-billion economy.

Other obstacles include persistent political attitudes.  Many Palestinians view increased trade with the Israelis as collaboration with the enemy.  No Palestinian chamber of commerce has been established to foster trade with Israel.

Few Palestinians and Israelis believe that economic prosperity alone will bring peace.  They say previous Israeli efforts to boost the Palestinian economy have failed.  Analysts say the bloodiest Palestinian uprisings of the late 1980's and in 2000 were preceded by periods of economic growth.

But some, including Ofir Gendelman, see reason for hope in the current upswing.

"It is easier to negotiate with someone who has a normal life, someone who is not desperate, someone who does not feel disenfranchised," added Gendelman.  "I think that the betterment of the economic situation in the West Bank has definitely improved the chances to reach a peace deal."

At the shiny new department store in Jenin, Afaf Rahal glows as she browses American and European porcelain dinnerware.  She says finding dishes like these here in Jenin is, for her, like a dream.

She says she has seen plates like these in Amman, but was always afraid of carrying them across the border.  Now, when she sees them, she says it is like finding a treasure.

For Afaf Rahal this new department store is a sign of hope that life is becoming normal, even in a place like Jenin.