Good Fences Make Bad Business Partners

Nablus entrepreneurs would love to increase their presence in Israel. But problems at the crossing points are forcing them to explore other markets.

Visiting Nablus can be a bewildering experience. There's the casbah with its stone buildings, and there are the high-rises springing up, where a 140-square-meter apartment can cost just $100,000, a tiny fraction of the price in central Israel. People throng the humming city center: Women wear anything from full traditional dress to jeans with a symbolic hijab on their heads, in a rainbow of colors.

To an Israeli, Nablus almost seems like just another Israeli town, though you might prefer to speak English there.

The casbah in Nablus.
Michal Fattal

Unlike Ramallah, for instance, where the Palestinian Authority conducts its foreign relations, Nablus is just a traditional Palestinian trading town. It has about 300,000 residents producing a range of products well known in Israel, from tahini to sunflower seeds to textiles. The local traders strive to expand their business in Israel, their biggest market. But obstacles abound, and they've been getting worse, traders say.

According to Bank of Israel figures, exports from the West Bank to Israel, or to other countries via Israel, slowed last year. Trade between Israel and the PA amounts to about $3 billion a year. The Israeli economy hardly depends on this business; the Palestinians depend on it a lot more.

How will I ever see the sea?

Anan Tamam is the co-CEO of Karawan; he represents the fourth generation making the famous Karawan tahini sesame paste. The company sells 70% of its product to Israel, and much of the other 30% goes to Israeli Arabs shopping in Nablus on the weekends.

Karawan has no less than 200 clients in central and northern Israel, and maintains a huge distribution center in Kafr Kara. "Felafel Givatayim can order 1,000 tons of tahini a week," says Tamam. "Israelis love our tahini and we love selling it to them."

To expand business even further, the company is now in the Palestinian business directory and Tamam is seeking a distributor for southern Israel. But it isn't so straightforward. "Israel is raising all sorts of obstacles," Tamam says.

"All these years we bought containers from an Israeli manufacturer. We got quality containers and he had a good client. Recently problems have been arising at the crossing point. Suddenly we can't get through one or two pallets: We have to bring in a whole container. Why? Because.

"We don't have anywhere to store all those containers. We had no choice but to start buying containers from a manufacturer in Nablus. True, it isn't the same quality, but the containers are perfectly serviceable, they're cheaper and I can give work to the local market."

Tamam would have preferred to keep buying the Israeli containers, but he can't. "Israel is forcing us to buy less from it," he says.

Traditionally, Karawan bought its sesame seeds from Israel. Again, because of problems at the crossing points, Tamam realized he had to find another source; for instance, Ethiopia. So although he badly wanted to expand business with Israelis, Tamam decided he couldn't rely on the Israeli market alone.

"We're checking other markets, in the Gulf countries, where there's a lot of sympathy for Palestinian products," says Tamam.

Essentially you're saying Israel is pushing you to develop your entrepreneurial spirit: to seek new markets, to expand your basket of products.

"Yes, but we're doing it under duress. Recently my permit to enter Israel was revoked. Why? Because. My mother and father have permits, I don't. I haven't been able to visit my customers in Netanya or Tel Aviv for three months or more. Not long ago I visited Germany, traveled in a fancy cay and suddenly realized I'd just crossed the border into Austria. Here the crossings points are killing our business in Israel. We've had business ties for more than 60 years. It's our natural market. We aren't political people, we're traders. Business is business and both sides profit."

Of course security needs to be taken care of. Tamam agrees. But people have to live, too.

True peace

Why do you have to cross? Isn't it enough for the merchandise to cross?

"Every trader knows problems arise that can only be resolved by meeting in person," Tamam explains. "I know my customers from childhood, when they bought tahini from my father. Aside from that, if I don't visit Israel, how will I ever see the sea?"

That's a good question. Meanwhile, the heady scent of roasting seeds and nuts can be smelled in the parking lot of Maslamani Brothers, the biggest producer of roasted seeds and nuts in the West Bank. The company, under CEO Jamal Maslamani, has 64 workers. The business turned over about NIS 43 million last year.

Maslamani Brothers consists of a production plant and several company-owned stores. It also produces its nuts and seeds for companies that sell them under their own label. Many of these companies are Israeli.

Asked who his competition is, Maslamani names Elite Industries, today a unit of Strauss Group. "Elite and I do the same thing," he says. "We even buy our raw materials from the same Israeli suppliers. But my profit margins are small. In Israel, people want to earn more."

He has a certain advantage over Elite: He pays his workers NIS 100 or NIS 120 a day.

Maslamani is sure he could expand his sales in Israel by 30%. "My father started doing business with Israel a week after the Six-Day War," he recalls. "The big traders never stopped working with us because trade is trade, and relations are better than people think. We work like partners. It's almost like family, and with family, one has to be reliable. We always pay on time. We didn't have problems during the intifada, either. This is more than economic peace: This is true peace between people."

Yet you don't rely on the Israeli market alone as you used to.

"Because I have no choice. I'd like to expand business with Israel, not, say, with Turkey or Arab countries. But what's killing us is transport costs. I could charge 30% less if I didn't have to work 'back to back' - send a truck to the Palestinian side of the border, unload the goods, and reload them on a different truck on the Israeli side, and that's without even talking about sacks that get torn or merchandise that gets wasted."

In the past, sending a truck laden with goods to Israel (or in the other direction ) would cost NIS 1,600. Now it costs more than NIS 2,000, Maslamani laments. The process has become expensive and tortuous. The solution, he says, is security technology that would scan the whole truck, not just one container at a time. "It would be good for both parties," Maslamani says. "Everybody would win."

If things get worse, would you consider not working with Israel at all?

"No! It's a disgrace to even ask that question. We live together here and will continue living together, and doing business together. You are traders and we are traders, even though at the end of the day, one's livelihood comes from God, not from us and not from you."