Study shows Palestinian businessmen invested $2.5 billion in settlements and Israel in 2010 20Nov11 November 20, 2011

IMEMC  -  19 November 2011

An academic study conducted by a Palestinian researcher from the West Bank city of Bethlehem, revealed that the amount of investments by Palestinian businessmen men, in Israeli settlements, and in Israel itself, in 2010, mounts to $2.5 Billion.

The study was conducted by Issa Smeirat, 43, as part of his M.A Degree. This is the first study of its kind, and its results surprised Palestinian and Israeli officials, Israeli Daily, Haaretz, reported.

Haaretz said that should these investments have been conducted in the West Bank, they could have created at least 213,000 jobs.

According to the study, 16,000 Palestinian businessmen from the West Bank, who hold permanent permits from Israel to enter the country and conduct businesses, established businesses and firms in Israel and its settlements in the occupied territories. This includes establishing several factories and companies that has numerous branches, all paying taxes to Israel.

Smeirat also studied the motives that pushed those Palestinian investors to invest in Israel and its illegal settlements, especially since the issue is very sensitive and more Palestinian organizations, activists and officials are calling for boycotting Israel and its settlement products.

Talking to Haaretz, the researcher said that the sensitivity of this issue prevents the publishing of the identities of the investors, adding that while conducting his research, the Palestinian National Economy Ministry in the West Bank, the same ministry that launched the campaign to boycott settlement products, stated that the Paris Agreement does not prohibit investing in settlements.

He was referring to the Protocol on Economic Relations, which came as an annex to the Gaza-Jericho Agreement, the first peace agreement signed between Israel and the Palestinian Liberation Organization on May 4, 1994.

The agreement incorporated the relations between the two parties, and was then incorporated and suppressed by Oslo 2 Agreement, and became known as the Interim Agreement on the West Bank and the Gaza Strip of 24 and 28 September 1995.

The study of Smeirat was presented by the end of last summer at the Al-Quds University. He obtained detailed information from Palestinian Commerce and Industry Offices about Palestinian investors in Israel and its settlements.

He managed to contact 540 investors, and distributed 420 surveys to other investors, but only 374 of them filled and submitted the surveys. He also managed to conduct face-to-face interviews with 120 investors.

His study revealed that most of the investors are fluent in Hebrew, and more than half of them are 40 years old or older. This shows that those businessmen worked in Israel before it closed its borders to the Palestinians in the early nineties.

Approximately 23% of them worked as laborers in Israel before they established their firms and businesses, and only 0.5% of them do not speak Hebrew.

One-fifth of the investors stated that their businesses are in Israel, Israeli settlements, the West Bank and abroad, while another one-fifth said that their investments are only in Israel and its settlements.

Approximately 90% of them said that their first ever experience in investments was conducted in Israel.

The researcher said that he believes that the main motive that encourages Palestinian investors to invest in Israel and its settlements is attributed to the limited capacity of Palestinian investments, especially since Israel controls 60% of the occupied West Bank, and also controls all natural resources, especially water, in addition to Israel’s restrictions on the freedom of movement of the people and the goods, especially since its controls all border terminals in the West Bank, and closed Israeli markets to Palestinian products.

The Israeli restrictions caused a sharp increase in production costs in the West Bank compared to production costs in Israel.

This is besides the sharp increases in prices of Palestinian lands (for sale and for lease), and the increase in the costs of water, power, in addition to the lengthy wait period that the investors have to bear when importing raw materials due to the Israeli restrictions on borders. These factors increase cost production to approximately 30%.

The capital of 16,000 Palestinian investors in the Palestinian Authority areas are distributed as the following; 3300 investors in Hebron, 3100 in Ramallah, 3000 in Nablus, 2000 in Bethlehem, and 1000 in Nablus.

Palestinian investments, according to Smeirat, are around 7 Billion U.S. Dollars; approximately $5 Billion of these investments are not in Israel and its settlements, as they are mainly invested abroad, either in projects or stocks, an issue that poses a significant challenge to investment opportunities in the West Bank.

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