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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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

East Jerusalem: Promoting Private & Foreign Investment

While the focus of the international community’s aid to Palestine in the past few years has been concentrated on increasing the sustainability of its political institutions, the economic needs of Palestinians have often taken second place, not least because of the Israeli restrictions on movement and trade and the lack of a coherent economic development policy. The people of East Jerusalem are among those who have been affected the most, having been cut off by Israel’s ‘separation barrier’ from their natural hinterland in the West Bank and squeezed in by Israeli checkpoints such as the one at Qalandiya, which divides Ramallah from Jerusalem.

A view of East Jerusalem, looking toward the Damascus Gate to the Old City. Photo: Liz Tagami.

(Click on the image to see an impressive overview of the ‘Old City’.)

Now a group of Palestinian companies are organising a “Jerusalem Business Forum” to address the growing economic stagnation and rising poverty in the Arab section of the city which has been annexed by Israel against international law and which Palestinians see as the future capital of an independent state. Due to take place in mid-December, it aims to encourage private and foreign investment in the local economy by concentrating on East Jerusalem’s untapped potential, as well as the city’s unique social and cultural heritage which continues to attract some 1.5 million tourists a year. Continue reading

Palestine’s Stock Exchange: Wooing Global Investors

Palestine’s Stock Exchange (PEX) continued to outperform all other Arab markets in the first half of this year on the back of a fast-growing economy and investor-friendly regulations. Its success has prompted a number of prominent Palestinian companies to consider initial public offerings (IPOs), a move that would further open the stock market to private and foreign investors. In June, the Exchange completed a highly successful “road show” in London, which featured the nascent state’s largest holding company, Padico, as well as Paltel, Wataniyya, the Bank of Palestine and the UAE-backed Rasmala Palestine Equity Fund.

Ahmad Aweidah, CEO of PEX, and Ammar Aker, CEO of Paltel, open the London Stock Exchange on 24 June.

The Exchange’s “Al Quds Index” grew by 0.64 per cent from January to June, compared to the end of 2010, while its market capitalisation increased from $2.5 billion to $2.8 billion. In contrast, all the remaining Arab stock markets reported falls in the first half of this year, ranging from less than five per cent in Abu Dhabi, Saudi Arabia and Qatar, to 25 per cent in Egypt and 40 per cent in Syria. In 2010, the average return on investments in Palestine amounted to 13.6 per cent, according to PEX officials.

Continue reading

New cities, New malls, New resorts

Private and foreign investors have launched huge new projects in Palestine’s real estate sector which are set to transform the economies — and living standards – of the West Bank and Gaza. One of the most interesting is the huge new planned city of Rawabi, situated just north of Ramallah, which is being developed at a cost of $850 million by the Bayti Real Estate Investment Company, a joint venture of Qatari Diar and the Ramallah-based Massar International.

Architect's image of the city Rawabi, being built north of Ramallah

Drawn from an Arabic word which means “to mend, to repair, to make peace,” Rawabi will feature gleaming high-rise buildings to make the most of the available land, as well as green parks, a hotel and convention centre, a business district and shopping areas. It will provide more than 5,000 affordable housing units, spread across 23 neighbourhoods.
Continue reading

The Gaza Marathon

c. UNRWA

The Gaza Marathon was organised by the UN agency, UNRWA, this Spring, to support summer camps for Palestinian refugee children in Gaza.

It will take another Marathon to get the whole Palestinian Economy working, whatever happens at the UN this September.

This website seeks to look at the prospects for this Economy, for Investment, for Social Enterprises, and, above all, for ways to empower the Palestinian people, materially, wherever they are.
____

We’re still UNDER CONSTRUCTION. So please bear with us.

We hope to be up and running in time for:

  • (mid-September) The UN General Assembly’s 66th Session, New York
  • ____

    If you would like more immediate, i.e. exclusive, information on the international publication (print and digital), Investing in Palestine, that we are bringing out in September (with a host of prestigious sponsors), please email Pam at:

    pamansmith@compuserve.com

    ____

    Thanks for reading.

    Pam