Cablegate: Jewish and Palestinian Americans Offer Fund For

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 TEL AVIV 002205

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD IS GAZA DISENGAGEMENT ISRAELI PALESTINIAN AFFAIRS ISRAEL RELATIONS
SUBJECT: JEWISH AND PALESTINIAN AMERICANS OFFER FUND FOR
GAZA ECONOMY

1. (SBU) SUMMARY: On April 1, Senator Carl Levin and Michigan
State community leaders met with several Palestinian business
leaders to discuss investment opportunities in Gaza. Senator
Levin told the group that the aim of his proposed Michigan
Fund for Peace and Development, which totals 200,000 USD, is
to fund one or two projects in Gaza dedicated to reviving the
local economy. Senator Levin believes that these investments
would serve as a simple and visible shot in the arm to the
Palestinian economy that could strengthen the peace process
and provide a model for future foreign investment. The major
concern addressed by the Palestinians during the meeting was
for freedom of movement for both laborers and goods within
Gaza. The meeting concluded with members agreeing to discuss
details of financial support for existing or new project(s)
in the coming months . END SUMMARY.

2. (SBU) Participants:
-Carl Levin - Senator Michigan
-Samir W. Mashni - Samir W. Mashni and Associates
-Terry Ahwal - Director of Donor Development/Madonna
University
-Robert Sher - Certified Public Accountant
-Eugene Driker - Barris Sott Denn & Driker
-Michael Kuiken - Professional Staff Member
-Dr. Hani H. Shawa - Chairman, Bank Of Palestine
-Hashim S. Al-Hussaini - Project Officer, PALTRADE (Palestine
Trade Center)
-Sohail Abu Haleema - Sohail Abu Haleema Bros. Co.
-Mohamed Alsharif - Retaj Web Development & Design

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Michigan Fund for Peace and Development
---------------------------------------

3. (SBU) On April 1, Senator Carl Levin, his staff and
accompanying group of U.S. citizens met with Palestinian
business leaders from the Gazan financial, commercial,
agricultural, and technical sectors. The aim of this meeting
was to discuss potential U.S. investments worth USD 200,000
in Gaza to help stimulate the local economy. The investment
would come under the umbrella of Levin's proposed Michigan
Fund for Peace and Development, an American initiative that
seeks to foster confidence in domestic (U.S.) and
international business communities to invest in the
territories for the betterment of the Palestinian people.

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Finance: Market Opportunities and the Fund
------------------------------------------

4. (SBU) In response to Senator Levin's presentation Dr. Hani
H. Shawa Chairman of Bank of Palestine assessed that the fund
amount of the USD 200,000 was too low to be effective. He
indicated that in order to help revive the economy in the
territories major investments are needed, especially in Gaza.
Gaza lags behind the West Bank in economic prosperity and
freedom of movement for both people, products and machinery.
Due to the current political and economic climate and
impending changes on the horizon --Gaza Disengagement-- the
Bank of Palestine could make major investments if it received
guarantees on such loans from either governmental,
non-governmental or private sources. In the case of the
Michigan Fund for Peace, the Bank of Palestine could
supplement the U.S. private fund, if it received guarantees
on the loans from the U.S. The Chairman also commented on
IDF-imposed travel restrictions, which hurt all aspects of
the Gaza economy, and increased the risk of investment for
major foreign investors. Local companies and manufacturers in
Gaza (mostly family owned) have trouble operating, he
explained, because of checkpoints and curfews imposed within
the territories. These small businesses do what is necessary
to keep from shutting down during the most difficult periods
of economic strain. They do so either by reducing the number
of workers or reducing overhead costs in areas that do not
perform well. Moving to exports and imports, he elaborated
that no facilities existed in Gaza or the West Bank that are
able to directly export abroad without using the Israeli or
Egyptian export facilities and marketing networks. Israel is
the main exporter of Palestinian goods through Ashkelon,
Karni and Ben Gurion airport.

------------------------------------------
Commerce: Stagnant Exports and Imports
------------------------------------------

5. (SBU) PALTRADE (Palestine Trade Center) Project Officer
Hashim S. Al Hussaini, who is one of many Palestinians
responsible for developing and promoting cash crops
(i.e.strawberries, cherry flowers, tomatoes) in the
territories, informed Senator Levin that there remains on
going cooperation between Palestinian and Israeli business
firms. Palestinian imports and exports mainly go through
Israeli firms such as AGREXCO (Agricultural Export Corp) that
deal in fresh and organic produce. Firms such as AGREXCO have
helped with exports and imports but this one positive aspect
of working with the Israelis cannot overshadow the bigger
economic and political picture which is bleak. As for Egypt,
exports through Cairo are minimal and equally problematic.
Here the scenario carries a familiar tone, but from a
different source: the Egyptian bias against Palestinians.
Problems exporting through Egypt are not with products but
about Egyptian attitude towards Palestinians. Al-Hussaini
reiterating Dr. Shawa' statement that closures hinder
exporting.

--------------------------------------------- ---
Technology: Investing in the Human Resource Area
--------------------------------------------- ---

6. (SBU) In the technology area, Gaza and the West Bank
produce many entry-level technology workers. Mr. Mohamed
Alsharif from Retaj Web Development & Design officer stated
"what we need is to invest in human resources so they can
have jobs. Gaza has difficulty in marketing what it produces
due to a weak information technology infrastructure. Lack of
management and no central facility to coordinate efforts
cuts-off product marketing. We need computers and need
facilities." Organizations such as PICTI (Palestinian
Information & Communication Technology Incubator) also
provide support for marketing and sharing of ideas, but
funding is an issue for such organizations, like the Bank of
Palestine that are fearful of investing in start-up
businesses that have almost no collateral.

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