Gaza: Historic Gateway’s Huge Potential as a Mediterranean Trading Hub

To most people around the world, the word ‘Gaza’ conjures up images of rockets and bombs, wars, poverty and invasion, never mind the appalling conditions in which many of its residents live as a result of the ongoing Israeli blockade and, most recently, the massive Israeli attack on the enclave — its third in the past six years. But, while one international commentator wrote recently, “It’s not too fanciful to see it in the future as the ‘Dubai’ of the Eastern Mediterranean,” Gaza has much more to offer given its 3,000 years of culture and its history as a prosperous trading hub connecting Africa and Asia, Europe and the Middle East.

Gaza, by David Roberts. Photo Reproduction, Library of Congress, Washington D.C.

Gaza, by David Roberts. Photo Reproduction, Library of Congress, Washington D.C.

(Click on the photo to enlarge.)

In the 19th Century, Gaza’s renowned soap factories, like those in Nablus, produced luxury goods that were exported around the world. It’s premium cotton crop, fruits, vegetables and spices were in great demand. Gaza’s merchants catered to a vast array of travelers: European visitors to the Holy Land, caravans from Egypt and North Africa, pilgrims from the Arabian Peninsula and Asia. Its bazaars were regarded as even better than those in Jerusalem.

Founded in the 14th Century, Khan Younis in southern Gaza served as a centre of the caravan trade between Asia and  Africa.  Photo:  Marka, Wikipedia.org

Founded in the 14th Century, Khan Younis in southern Gaza served as a centre of the caravan trade between Asia and Africa. Photo: Marka, Wikipedia.org

Before the latest invasion, the Washington-based International Monetary Fund estimated that Gaza’s GDP would rise by 7 per cent in 2013 and 6.5 per cent this year, figures that any European country would envy. But the destruction by Egypt, as well as Israel, of the underground tunnels, which allowed much needed supplies to be brought in despite the blockade, has ended any hopes that Gaza can survive on its own, never mind grow.

Earlier this year, it was expected that increases in international aid, especially from the European Union and the UN following Israel’s onslaught in November, 2012, would counter some of the setbacks. The rise in development funds, from both government and private sources in the Gulf states – including Qatar, the UAE and Saudi Arabia – was also contributing to a new era of hope and confidence in Gaza. Qatar’s building projects, covering everything from schools, roads and hospitals to new housing and infrastructure projects alone were expected to create some 10,000 jobs by next year.

The University College of Applied Sciences in Gaza.  Many more schools and higher education facilities are needed.  Photo:  Ahmed Fuad.

The University College of Applied Sciences in Gaza. Many more schools and higher education facilities are needed. Photo: Ahmed Fuad.

Surprisingly, until the latest assault, the growing international awareness and support for Gaza’s people had also led to a boom in tourism in the enclaves’ new hotels, restaurants and shopping malls. International solidarity activists, NGO staff and aid officials were helping to boost capacity and business to levels not seen since the Israeli bombardment of late 2008.

Gaza's first five-star luxury hotel, the Al-Mashtal.  Photo:  ArcMed

Gaza’s first five-star luxury hotel, the Al-Mashtal. Photo: ArcMed

The desire of Gaza’s newly rich elite to live in up-to-date, spacious accommodation, combined with the eagerness of its private investors to seek out alternatives to the tunnel trade, helped to fuel a boom in real estate, retail and leisure services, as well as increased demand for international luxury brands.

Meanwhile, a host of recent studies, from the World Bank, Israeli academics and the Gaza-based PalThink research centre have pointed out that concrete measures will also be needed to be introduced by Hamas if Gaza’s huge economic potential is to be realized, even if the Israeli siege is lifted, or substantially eased.

In particular, they cite the need for more institutional support for the private sector, an overhaul of the tax regime, and measures to boost agricultural and industrial productivity, as well as export capacity.

Gaza could produce a huge array of fruits, vegetables, nuts, dates, olive oils and spices for export, if the seige were lifted.  Photo:  The Gaza Kitchen, Just World Books, 2013

Gaza could produce a huge array of fruits, vegetables, nuts, dates, olive oils and spices for export, if the seige were lifted. Photo: The Gaza Kitchen, Just World Books, 2013

Gaza's fishermen used to supply Egypt, Israel and neighbouring Arab states, but Israeli restrictions mean the fishermen cannot even supply domestic demand. Photo:  The Gaza Kitchen, Just World Books, 2013

Gaza’s fishermen used to supply Egypt, Israel and neighbouring Arab states, but Israeli restrictions mean the fishermen cannot even supply domestic demand. Photo: The Gaza Kitchen, Just World Books, 2013

Special attention, they add, should be given to those sectors, such as manufacturing, construction and tourism, which would provide the most jobs. Vocational training projects, as well as a re-vamp of the entire educational system, plus incentives for the ICT and telecoms sector, they say, are urgently needed to help Gaza realize its opportunities in a globalized marketplace.

While the Bank of Palestine and other financial institutions have continued to provide, often under the most difficult circumstances, access to cash and funds in Gaza, Hamas will also need to ensure that any lifting of the Israeli siege, both for business people and cargoes, is accompanied by closer co-ordination of trade and regulations with the Palestinian Authority in Ramallah. Gaza’s dependence on the use of the Israeli shekel (NIS) as its main currency, together with its heavy reliance on money-lenders rather than on banks which can gather deposits and direct them to profitable development projects, could hold up progress in the future as more aid and investment pours in, and as reconstruction begins, once again, in earnest, the reports note.

If Gaza City is to thrive again, Hamas will need to introduce economic and financial reforms, as well as seeking to end the Israeli blockade.  Photo: Al Jazeera English

If Gaza City is to thrive again, Hamas will need to introduce economic and financial reforms, as well as seeking to end the Israeli blockade. Photo: Al Jazeera English

Arab and Islamic tourism to Gaza, as well as to Jerusalem and the West Bank, could also be greatly increased by agreements with Egypt on developing the Sinai Peninsula and the border areas with Gaza, Oman Shaban, the founder and director of the Gaza-based think tank, PalThink, argues. “Tourism in the Sinai Peninsula [which would also benefit Egypt directly] represents a golden opportunity for tens of thousands of Palestinian families in the Gaza Strip, the West Bank and Jerusalem due to visitor appeal and modest costs,” he maintains.

Dating back to the 13th Century, the Pasha's Palace has been occupied by various rulers of Gaza, from the Mamlukes and Ottomans to Napolean and the British.  The UN is now helping to restore it as a major tourist site.  Photo: UNDP

Dating back to the 13th Century, the Pasha’s Palace has been occupied by various rulers of Gaza, from the Mamlukes and Ottomans to Napolean and the British. The UN is now helping to restore it as a major tourist site. Photo: UNDP

Talks between the PA and Israel that were underway to begin exploiting the rich reserves of natural gas, and possibly oil as well, lying just off Gaza’s shores in the Mediterranean, have also been put on hold. Valued at some $7 billion, they could help to end Gaza’s critical shortage of fuel and electricity as well as providing substantial revenues to build new schools, hospitals, roads, ports and even an airport, as well as vitally needed new water and wastewater facilities. Gas exports either through Egypt or Turkey, could boost the PA’s coffers for years to come, and help to reduce both Gaza and the West Bank’s huge dependence on international aid, speeding up the day when Palestine can become self-sufficient.

Gas reserves valued at $7 billion lying off the coast of Gaza could greatly reduce Palestine's dependence on foreign aid.  Photo:  Michel Chossudovsky

Gas reserves valued at $7 billion lying off the coast of Gaza could greatly reduce Palestine’s dependence on foreign aid. Photo: Michel Chossudovsky

Hamas’s newfound unity with the PA in Ramallah and the solidarity for Gaza shown by Palestinians in the West Bank and East Jerusalem, as well as by people around the world, bodes well for bringing Gaza into a regional network that could benefit Israel as well as Palestine. But for that to happen, more pragmatic heads will need to surface in Tel Aviv and Cairo, as well as in Gaza City.

© Pamela Ann Smith

This is a publication of investpalestine.wordpress.com and is protected by international copyright laws. This article is for the reader’s personal use only, but may be re-distributed electronically with a credit to investpalestine.com.

An earlier version of this article appeared in the July, 2013 issue of The Middle East magazine.

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Global Investors Target the Palestine Stock Exchange in 2014

Both prices and trading volumes on the Palestine Stock Exchange (PEX) have scored impressive gains since the start of this year, thanks largely to investors from the Palestinian diaspora and Arab Gulf states. Recent decisions by such respected ratings agencies as Standard & Poor’s, Dow Jones and MSCI to include Palestine in their indices, as well as plans by London’s FTSE to follow suit, are now attracting other global investors from the UK, Europe, the US, Canada, Chile and elsewhere to the Exchange and to its leading companies, such as PADICO Holding, PalTel and the Bank of Palestine, analysts report.

Expectations that these moves will be followed by PEX’s inclusion in the global ‘Frontier Market’ indices is already fuelling demand from institutional investors, the analysts add. Its multi-currency platform, allowing trading in both US dollars and Jordanian dinars, as well as Palestine’s lack of capital controls, is also encouraging international interest. Trading volumes in January were more than two-fold higher than in December, and nearly four times as high as in January, 2013.

PEX's CEO, Ahmad Aweidah, expects 2014 to be a "threshold year."  Photo:  Mark Green, mark@nwmsltd.com.

PEX’s CEO, Ahmad Aweidah, expects 2014 to be a “threshold year.” Photo: Mark Green, mark@nwmsltd.com.

The Exchange’s Al Quds index broke through the 600 barrier in early February before falling back slightly on profit taking. It had risen 10.55 per cent in January alone, making it the second best performing stock market in the Arab world so far this year. Last year, the index registered an annual gain of 13.4 per cent, according to figures compiled by Ramallah-based brokers Sahem Investment and Trading. By the middle of February, the Exchange’s total market capitalisation had reached more than $3.5 billion.

Palestine's Stock Exchange is ahead of most other Arab markets.   Graph: Sahem Trading & Investment.

Palestine’s Stock Exchange is ahead of most other Arab markets. Graph: Sahem Trading & Investment.

This year could be a “threshold year,” the Exchange’s CEO, Ahmad Aweidah, told InvestPalestine.com. Speaking during a visit to London in mid-January to mark Palestine Capital Markets Day, he said “We are now achieving a series of important economic breakthroughs that could see our growth accelerate even more strongly.

He and other members of the Palestinian delegation, which included senior executives from PalTrade, PalTel, the Palestine Investment Fund (PIF), PADICO Holding, the Bank of Palestine, Sahem Trading & Investment and Lotus for Financial Investment, as well as Abeer Odeh, CEO of the Palestine Capital Market Authority, were hosted on the last evening of their visit to London by Baroness Morris of Bolton, UK Prime Minister David Cameron’sTrade Envoy for the Palestinian Territories, at a reception in Westminster organised by the Palestine British Business Council and its co-chairman, Antoine Mattar.

The Palestine Delegation to Palestine Capital Markets Day in London, 17 January, 2014.  From left to right:  Fida Musleh-Azar, PEX Manager of Public Relations & Investor Education; PEX   CEO Ahmad Aweidah; Ammar Aker, CEO, PalTel; John Davies, Vice-President, S&P Dow Jones Indices.  Photo:  Mark Green.

The Palestine Delegation to Palestine Capital Markets Day in London, 17 January, 2014. From left to right: Fida Musleh-Azar, PEX Manager of Public Relations & Investor Education; PEX CEO Ahmad Aweidah; Ammar Aker, CEO, PalTel; John Davies, Vice-President, S&P Dow Jones Indices. Photo: Mark Green.

Financial services, banking, ICT, infrastructure and high value agriculture, as well as tourism (including such world renowned attractions as Bethlehem, the Dead Sea and Jericho) were making strong progress, Aweidah told an audience of existing and potential investors. And, although economic growth has slowed recently as local entrepreneurs and international donors await firm progress on US Secretary of State John Kerry’s ‘peace initiative,’ Palestine’s GDP has grown by a remarkable 8.4 per cent a year on average during the past five years, he noted.

“The Palestine economy continues to demonstrate exceptional endurance despite political challenges,” Aweidah explained, a performance he attributed to the “strong and vibrant private sector,” its “well regulated and sophisticated financial system,” its “modern capital market,” and “advanced investor protection regime.” The majority of the 49 stocks on the Exchange, he pointed out, also “enjoy free float ratios that are comparable to advanced markets” as well as “reassuring turnover ratios.”

Foreign investors, both individual and institutional, are helping to boost values and volumes on the Palestine Stock Exchange.  Graph: PEX, Ministry of National Economy.

Foreign investors, both individual and institutional, are helping to boost both values and volumes on the Palestine Stock Exchange. Graph: PEX, Ministry of National Economy.

At the end of 2013, foreign investment in PEX amounted to just over 40 per cent of the total value of its shares, or about 34 per cent by volume. Investors from Jordan, many of whom are Palestinians with Jordanian citizenship, accounted for the majority of the foreign shareholders, 61.4 per cent, followed by others from the Americas at 10.9 per cent, the Arab Gulf with 6.6 per cent and Europe with 2.5 per cent. Palestinians made up 95 per cent of the total number of investors, demonstrating the widespread appetite for shares among smaller shareholders living both inside and outside Palestine.

Speaking to potential investors in London and to InvestPalestine.com, John Davies, Vice President at S&P Dow Jones Indices, explained why his firm, which now includes both the respected ratings agencies, Standard & Poor’s and Dow Jones, had established two stand-alone indices for Palestine last December. “We don’t build indices simply because we feel they are needed,” he insisted. “We build them because our clients are asking for them. The establishment [of the new indices] is evidence that there is significant demand for investment in Palestine.”

John Davies, Vice President at S&P Dow Jones Indices, explaining PEX's attractions to an audience of investors in London, 17 January, 2014.  Photo:  Mark Green.

John Davies, Vice President at S&P Dow Jones Indices, explaining PEX’s attractions to an audience of investors in London, 17 January, 2014. Photo: Mark Green.

The two new additions are the S&P Palestine Broad Market Index (BMI), which aims to capture at least 80 per cent of PEX’s market capitalisation, and the Dow Jones Palestine Total Stock Market Index (TSM), which aims for 95 per cent of the Exchange’s float-adjusted market capitalisation, Davies explained. Since testing began in September 2012, he added, the stand alone BMI index had achieved a 41 per cent cumulative annual return, a figure which compares favourably with the Pan-Arab Composition Index at 24.5 per cent and the S&P Composition Index at about 30.2 per cent.

Despite general skepticism about the progress of Kerry’s peace talks, investors are more confident that he will succeed in brokering a deal, the news agency, Bloomberg, quoted Aweidah as saying in mid-January. “If there’s a framework agreement, it’ll be a game changer” for the Exchange. There’s certainly a lot of optimism in the market about the direction of the political negotiations…. The time to invest in Palestinian stocks is now.”

Processing premium quality Medjool dates at a Palestinian-owned factory in the Jordan Valley.  The possibility of greater access to the fertile soil and water of the Israeli-occupied parts of the Valley and "Area C" as a result of the current negotiations between Israel and the Palestinian Authority is a major factor in encouraging both local and foreign entrepreneurs to invest in the West Bank.  Photo: fablenaturals.com.

Processing premium quality Medjool dates at a Palestinian-owned factory in the Jordan Valley. The possibility of greater access to the fertile soil and water of the Israeli-occupied parts of the Valley and “Area C” as a result of the current negotiations between Israel and the Palestinian Authority is a major factor in encouraging both local and foreign entrepreneurs to invest in the West Bank. Photo: fablenaturals.com.

Success in the talks would, according to a recent study by the International Monetary Fund, boost economic growth in the Territories by 35 per cent over the next five and a half years, or about 6.5% a year on average, compared with 1.5 per cent in 2013. This includes Palestinians gaining control of the land, water and resources in Area C, which forms almost two-thirds of the West Bank, which is currently under Israeli military occupation. The IMF adds that an agreement would significantly reduce the Palestinian Authority’s dependence on foreign aid, greatly enhance employment and lower poverty levels.Local entrepreneurs are investing in modern factories, like this one outside Hebron.  Photo:  Palden Jenkins.  paldywan.blogspot.co.uk Local entrepreneurs are investing in modern factories, like this one outside Hebron. Photo: Palden Jenkins, paldywan.blogspot.co.uk.

Business confidence in the West Bank is also rising, according to Palestinian analysts, because of higher optimism among entrepreneurs and in the industrial sector, especially in food, textiles, chemical, pharmaceutical, engineering, plastics and construction. The Palestinian Monetary Authority reported in mid-February that its monthly index, the PMA Business Cycle Indicator, had risen from minus 1.44 in the West Bank in January to a positive 8.25 in February. Negative business sentiment in the Gaza Strip also improved, as industrialists reportedly felt more optimistic about the continuous US efforts to stimulate the peace process between Palestinians and Israelis and less fearful of a continuing deterioration in security conditions. The northern West Bank city of Jenin is to be the site of a vital new power plant due to be built by a Palestinian company. Photo: Palden Jenkins, paldywan.blogspot.co.uk.

If an accord is agreed, Aweidah revealed, as many as four family-owned businesses in Palestine may also opt to sell shares on the Exchange through initial public offerings (IPO’s). The Palestine Power Generating Company (PPGC), he added, could follow suit.

PPGC is planning to build a $300 million power plant in Jenin in the West Bank which will be fuelled by gas from the giant offshore Leviathan field in the Mediterranean under a $1.2 billion, 20-year deal agreed in January. PPGC’s leading shareholders include the Palestine Electric Company, the builders of Palestine’s first independent power plant, and the industrial conglomerate, PADICO, both of which are quoted on the PEX.

© Pamela Ann Smith

This is a publication of investpalestine.wordpress.com and is protected by international copyright laws. This article is for the reader’s personal use only, but may be re-distributed electronically with a credit to investpalestine.com.

Changing Fortunes for Palestine’s Economy?

InvestPalestine.com was busy in June preparing a Special Report which has now appeared in the July issue of the London-based, pan-Arab monthly, The Middle East.TME Cover July '13

Here’s a preview:

Critical Times for Palestine’s Economy

The hopes and aspirations of millions of young Palestinians, both in the occupied territories and in the refugee camps of Lebanon, Jordan, Syria and elsewhere, as well as those of their older relatives and families both at home and in the Diaspora, could well be at stake in the coming weeks as US Secretary of State John Kerry seeks to convince Israel, as well as the Palestinian Authority, to return to the negotiating table and finally agree to accept the need for a sovereign Palestinian state.

Will there be peace for the next generation? Photo:  Eva Bartlett, http://ingaza.wordpress.com.

Will there be peace for the next generation? Photo: Eva Bartlett, http://ingaza.wordpress.com.

While many in the West Bank, Gaza and East Jerusalem, as elsewhere, are justifiably extremely skeptical about Kerry’s plans to restart the moribund “peace talks,” Palestine’s business leaders, along with some of Israel’s most progressive entrepreneurs, have welcomed his initiative, as have future leaders like the imprisoned Marwan Barghouthi, seeing it as the only way to end the decades-old conflict and ensure a viable future for the next generation.

Gaza: Dubai on the Mediterranean?

To most people around the world, the word ‘Gaza’ conjures up images of rockets and bombs, wars, poverty and invasion, never mind the appalling conditions in which many of its residents live as a result of the ongoing Israeli blockade. But, as one international commentator suggested recently, it’s not, actually, too fanciful to see it in the future as the Mediterranean’s “Dubai.” While of course that assumes that peace prevails and that the Israeli siege ends, it also recalls Gaza’s historic role as a prosperous gateway between Africa and Asia, Europe and the Middle East.

 Gaza's five-star Al Mashtal Hotel on the beach front shows the potential for luxury tourism to appeal to visitors from Europe, Asia and Africa.  Photo:  Christopher Furlong, AFP/Getty.

Gaza's five-star Al Mashtal Hotel on the beach front shows the potential for luxury tourism to appeal to visitors from Europe, Asia and Africa. Photo: Christopher Furlong, AFP/Getty.

Developing East Jerusalem?

Efforts to help the beleaguered 375,000 inhabitants of Israeli-occupied East Jerusalem – which Palestinians see as the future capital of their state – are intensifying because of renewed efforts by Palestinian businessmen and promises of some $1 billion in aid from the Arab League, of which $250 million has already been pledged by Qatar. The plans include the construction of a new airport in the city, a project which was first mooted in 2009 by the former Palestinian Prime Minister, Salah Fayyad, as well as incentives to both local and foreign investors in the fields of finance, trade, transport, tourism, real estate and housing, private education and information communications and technology (ICT).

The articles will be published in full here at the end of July.

Meanwhile, check out http://www.themiddleastmagazine.com, or get the printed edition at your local news agent or newstand.

As always, thanks for reading!

Pam

Real Estate and Construction: The Unmet Potential

Back in 2010, when the Palestinian economy was growing at more than 9 per cent a year, the country’s construction industry began to boom, and while it has fallen off dramatically in the West Bank since then, it is still growing in Gaza. New real estate developments, especially in and around the administrative capital of Ramallah in the West Bank, as well as projects to build modern shopping malls, office buildings and housing in Gaza have taken off.

The UN’s Secretary-General Ban Ki-moon and Palestinian Prime Minister, Salam Fayyad, surveying prime Palestinian land in ‘Area C’, near Ramallah, which is currently under Israeli military control. Its development could help spur further growth in the Palestinian economy and create thousands of much-needed jobs in construction. Photo: UN.

The planned new city of Rawabi, launched by the Bayti Real Estate Investment Company —- a joint venture between Qatari Diar and Ramallah-based Massar International —- was a model that caught the attention of the international press. Costing some $850 million, it will feature gleaming high-rise buildings set on a scenic wooded hilltop. More than 5,000 affordable housing units will be included, spread across 23 neighourhoods, along with green parks, a hotel and convention centre, a business district and shopping areas.

Alas, the project, like so many others in the Occupied Territories is way behind schedule, due to Israeli restrictions that have hindered the construction of a permanent new access road needed to carry tons of building materials to the site.

An artist’s view of the new city of Rawabi which is under construction near Ramallah. Photo: Al Bayti.

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Palestine’s Economy: Bright Prospects for the Private Sector

Whatever the state of ‘peace talks’ to end the Israeli occupation and create an independent Palestinian state, or of protests in the West Bank, the coming months and years are likely to see a renewed focus on the private sector economy in the West Bank, Gaza and East Jerusalem. Investment —- from Palestinians in the diaspora, private Arab funds and foreign corporations, as well as from important ‘donors,’ such as the World Bank, the US Overseas Private Investment Corporation (OPIC), the UK, the European Union, Japan and Canada — is increasing, reflecting the sector’s remarkable resilience in the past few years, and its huge potential in the medium-term.

Expotech runs from 6 to 11 October in Ramallah andGaza. Graphic: PITA, in the October issue of The Middle East magazine.

Expanding and developing it further is now also seen as crucial to stemming unemployment and rising prices, particularly among the youth in Palestine. This would also help to make the economy less dependent on Israel and foreign aid. Continue reading

PalTrade Launches Drive to Diversify Trade & Exports

The Palestine Trade Center (PalTrade), together with the Ministry of Economy in Ramallah, has announced a series of measures to promote Palestinian exports to the Arab countries, Europe and other international markets, including special programmes aimed at small- and medium-sized enterprises (SMEs) in the West Bank and Gaza. They are being launched as more and more countries, following the lead of the UK, the European Union and South Africa, are refusing to accept imports labelled ‘Made in Israel,’ which, in fact, come from Israeli settlements in the occupied territories rather than from Israel itself.

The measures announced by PalTrade — a national, non-profit organisation based in Al Bireh in the West Bank — include a new trade diversification programme funded by the EU which is also being supported by the Palestinian Shippers Council. In addition to encouraging alternative trade corridors to, and through, Jordan and the nearby Arab countries, the €3 million programme sets up a ‘National Export Strategy’ to improve Palestine’s international competitiveness as well as special measures to develop Palestine’s trade in services.

Medjool dates and Palestinian fruits and vegetables from the Jordan Valley are prized throughout the Arab world. Picture courtesy of PalTrade.


Jordan and the Arab Gulf states are being targetted by PalTrade and the new Jericho Agro-Industrial Park. Picture courtesy of PalTrade.

“A comprehensive package will be implemented to support the private sector in reaching new markets and developing marketing strategies,” the EU’s chief representative, John Gatt-Rutter, said at the official launch in Ramallah’s Movenpick Hotel on 27 February.
However, he also noted that its success depended on Israel complying with its international obligations to remove the existing barriers to the free movement of people, goods and services in the territories. “For this project to fully deliver its results…Israel has a major responsibility for ensuring access and movement and facilitating Palestinian trade,” he told his audience, which included Prime Minister Salah Fayyad, PalTrade’s CEO, Hanan Taha, and Maha Abu Shoshah, Chairman of the Shippers Council.

Last September, the European Parliament in Strassbourg approved a new trade agreement with the West Bank, Gaza and East Jerusalem which allows EU members states to import agricultural products, including fish, directly, i.e. without going through Israel. “This is one of the most generous trade agreements in the agricultural sector signed by the EU,” the European Commissioner for Agriculture and Rural Development, Dacian Ciolos, said at the time. “I want to be clear,” he added, that the European Commission is working to ensure that the EU does not buy any products from Israeli colonies in the occupied Palestinian territories.” Continue reading

Jericho Agro-Industrial Park: Bringing State-of-the-Art Industry to the World’s Oldest City

Jericho is reputedly the world’s most ancient, continuously inhabited city, its fortified walls dating back 10,000 years. Today it is a haven of self-rule in central Palestine and a mecca for residents in the West Bank seeking a respite from their political and economic woes, as well as for some 700,000 tourists a year who visit the area’s famed biblical and Islamic sites.

But on a 10-minute drive out-of-town, the vibrant streets, palm trees and market stalls filled with the lush produce of the Jordan Valley give way to the desert. It’s hard to believe that in the space of a few months, 11.5 hectares of rocky soil and flat, dry terrain will give way to an industrial zone of processing plants and modern factories capable of exporting the region’s high quality agricultural products to nearby Jordan and onward to lucrative markets in the Arab Gulf states and the European Union.

It is just one of three such zones—along with others in Bethlehem and Jenin—planned by the Palestinian Industrial Estates and Free Zones Authority (PIEFZA) to help increase jobs and opportunities for small- and medium-sized enterprises, as well as export earnings. If successful—and there are many “ifs” given Israel’s control of the surrounding region, the pioneering Jericho project, known as the Jericho Agro-Industrial Park (JAIP), could prove to be a boon to private and foreign investment, particularly from Palestinian and Arab entrepreneurs in the diaspora. Continue reading

Palestine’s Growth Attracts New Investment Funds

Confidence in Palestine’s regulatory framework and in the resilience of the Palestine Stock Exchange in the wake of turmoil in the Arab world* is helping to boost both regional and foreign interest in its new investment funds, officials and analysts report. So too is the growing possibility that the Palestine Stock Exchange (PEX) will be added to the MSCI Frontier Markets Index, which currently groups 26 countries including Nigeria, Kenya, Vietnam, Kazakhstan, Pakistan and Jordan as well as the Arab oil exporting countries of Qatar, Kuwait and the United Arab Emirates.

Munib Al-Masri, Chairman of Padico Holding, outside his home in Nablus. Padico is a favourite of international investors.

Launched in May, 2011, the Luxembourg-based Rasmala Palestine Equity Fund is currently trading almost 5 per cent below its peak, but above the lows reached in November in the aftermath of the Palestinian bid for statehood at the UN and the withdrawal of substantial aid funds from the US, as well as the temporary halt in tax revenue transfers by Israel. Beginning with $15 million, provided in part by the Palestine Authority’s Palestine Investment Fund, it is open-ended and is expected to reach up to $100 million by mid-2014. RPEF is targeting a diversified portfolio of growth and value stocks listed exclusively on PEX, as well as initial public offerings (IPOs) and Palestinian firms which may be considering IPOs. Favoured sectors include telecommunications and pharmaceuticals as well as banking and investment.

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Palestine Stock Exchange 2nd Best in Arab World

The Palestine Stock Exchange’s Al Quds Index is reporting modest gains this year, in line with global trends, despite the upheavals in the Arab world, closing at 480.82 on February 15. It ended 2011 at 476.93, marking a loss of 2.6 per cent for the year, according to reports from the PSE.

Despite the losses last year, the PEX came second in the list of Arab exchanges, just behind Qatar — the only one to report a rise. It ended 2011 with a gain of 1.12 per cent.

The market capitalisation of the PEX rose 13.6 per cent on the back of seven new listings in 2011, reaching $2.78 billion compared to $2.45 billion in 2010. New entrants included Wataniya Palestine Mobile Telecommunications, Union Construction and Investment, Golden Wheat Mills and Alrafah Microfinance Bank.
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