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Bottom line for Palestinian entrepreneurs: Reinvent the economy

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'The siege has killed all prospects'

When Abdel-Ghani Abdeen began manufacturing plastic sewage pipes after the 1993 Oslo accords, he invested based on the optimism driven by the peace process. But after the breakdown of talks in 2000, and the Israeli blockade of Gaza after Hamas wrested control of the tiny coastal strip in 2007, his business has only been getting worse.

"The siege has killed all prospects," says Mr. Abdeen, chairman of the Abdeen Group. "Gaza was 30 to 40 percent of our business."

Israel and the US focused on promoting development in the West Bank to prop up the government of Palestinian Authority President Mahmoud Abbas. Even Israeli Prime Minister Benjamin Netanyahu has emphasized the need to promote an "economic peace" by building joint industrial zones to sap the motivation of – and support for – militants.

Israeli measures taken under the 2007 Annapolis initiative to ease movement in the West Bank have had only a "marginal" effect on the economy, said the World Bank report. It also warned that the Palestinian economy won't be a viable one if Gaza remains cut off.

It's an open question how much Mr. Netanyahu is willing to push Israeli security authorities to relax restrictions. Under pressure from Mr. Mitchell, Netanyahu's security cabinet met Wednesday to discuss a possible easing of the Gaza blockade, which was designed to undermine Hamas.

Ray of hope in Ramallah housing project

Palestinian entrepreneurs such as Abdeen, hobbled at home, are looking to expand in other countries. The number of industrial businesses in Gaza, for example, has dropped from 3,900 from before Israel's 2005 withdrawal to 200 at the end of last year. Unemployment stands at 26 percent. Trade is virtually nonexistent.

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