RAMALLAH — Despair at the relations with Israel, fear of a brain drain and reams of uncertainty: those were the main concerns of businesspeople in the Palestinian Authority, even before the hostilities with Hamas in mid-May. The latest round of bloodshed found Ramallah, the main city in the Palestinian Authority-controlled parts of the West Bank, still licking the wounds from the coronavirus pandemic but returning to almost full routine. On the street no one mentions the virus or the vaccination campaign, and even the announcement by Palestinian President Mahmoud Abbas on the day of our visit, that he was canceling the parliamentary election, left the public indifferent.
“Ramallah is an odd city. I came from a small city in Ohio that doesn’t have as much economic activity as Ramallah,” says American-Palestinian businessman Sam Bahour. “Every week, even during corona, you have new restaurants and new cafes open. This is not the United States. Nobody is getting a check in the mail. There is no support from the government coming to businesses that are being affected by the pandemic. They have to adjust, and they adjusted.”
At the same time, he notes, “even though Ramallah has some specific characteristics, one has to keep in mind that it is under the same exact military occupation that Gaza is under. The difference is the flavor of occupation. The Israeli Authorities have had the luxury of time to develop a scheme for every Palestinian area – so the Jordan Valley is one scheme, Ramallah is another. Gaza is the harshest scheme. We always call Ramallah ‘The 5 Stars Occupation’ because out of all the different regions Ramallah is probably the least visible of having this effect of the occupation.
"But if you go into any sector you come up with the very same conclusion that what’s being applied to us is the same as being applied everywhere, It’s just how visible it is.”
About 350,000 people live in the Ramallah district, which includes the cities of Al Bireh and Beitunia as well as Ramallah itself, which is the de facto capital of the PA. This is where the government offices sit, as well as the main offices of big companies, businesspeople, the Palestinian stock exchange, foreign delegations and NGO headquarters. The packed restaurants and cafés give credence to the sobriquet by which Ramallah is known in Israel: “the Palestinian Tel Aviv.”
Like Tel Aviv, Ramallah, too, is like a country of its own. According to the Palestinian Central Bureau of Statistics, the average unemployment rate in the city during the coronavirus year was just 10 percent, as compared to 25 percent in Bethlehem and more than 50 percent in the southern Gaza Strip. However, despite the apparent tranquil atmosphere, the ground seems to be burning. The cloud of the canceled parliamentary election and the violent clashes in Jerusalem during Ramadan was palpable around the government institutions in the city, where the intense presence of security forces and armored vehicles only heightened the tense atmosphere, and PA representatives refused to meet openly with an Israeli journalist. All of that was happening even before the latest round of fighting between Gaza and Israel.
Of the six businesspeople we met, five continue to retain a modicum of optimism and believe in economic cooperation with Israel. But the youngest member of the group, the director of an organization that supports nascent Palestinian businesses, states, “It’s easier for us to communicate with the Arab world than with Israel.”
- How do you run a city with no country? Ramallah mayor has an answer
- Israeli, Jewish, and raising my kids in Ramallah
- Buying Hanukkah candles in Ramallah
We met Ali Nazzal at the Al-Matal café, which has a gorgeous view and sits in a new building built by the Qattan family foundation. The father of the family, Abdel Mohsin Al-Qattan, was a Palestinian refugee who fled Jaffa upon Israel’s establishment. He did extremely well in business in Britain, and after his death his family donated $21 million to build a magnificent cultural center in Ramallah, which contains a library, theater hall, galleries and workshops.
Al-Matal looks exactly like an average Tel Aviv café, and the young people hanging out there – students enjoying free internet access and talking about Abbas’ decision to cancel the election – could be interchangeable with their Tel Aviv counterparts. The one difference is the prices, which are half of those in Israeli coffee shops.
Nazzal spent 15 years working in the public sector, six of them as director general for administration and personnel in the bureau of the Palestinian president. In 2012, he resigned because the workload was crushing him and taking over his personal life. “There are a great many highly skilled Palestinians who can’t get a job in government ministries, because Fatah and Hamas want to control everything and don’t give the new generation a chance,” he says.
According to the World Bank, almost half of the PA’s budget is allocated for employee salaries. “The salaries in the public sector are relatively high, but the PA hires untrained people, without letting the private sector get involved,” says Nazzal, who was aware of this problem in his former job and in his present one, too, as an organizational consultant.
We always call Ramallah ‘The 5 Stars Occupation’ because out of all the different regions Ramallah is probably the least visible of having this effect of the occupation
Before the coronavirus struck, Nazzal established a company called Synergia, which advises government personnel, private companies and NGOs. When the first lockdown was declared in March 2020, he decided to close the office and work from home. “Rent in Ramallah is quite high and it’s not worthwhile,” he says. “A 100-square-meter [1,056 sq. ft.] office cost me $1,000 a month.”
Are you optimistic about the future and relations with Israel?
“Things have started to move lately, but I don’t know whether in the right direction or in the direction of disaster,” he replies with a smile. Nazzal is worried about Arabs from Israel entering Ramallah, where they could cut into local business, he says. For example, Almashadawe King Store – the largest food retailer in Israel’s Arab community – leased a whole floor in the new Lacasa Mall and announced unprecedented sales when it opened. Four years ago, Israeli insurance company Phoenix bought a 20-percent share in the Arab-owned grocery chain.
Are the agreements Israel signed with the Gulf states affecting Palestinians?
“I don’t think they’re having an influence. My impression is that Israeli businesspeople tend to disparage businesspeople from the Gulf states and talk about them arrogantly. They will soon find out that their interlocutors from the Gulf are a lot smarter than they think.”
The Carmel Hotel, owned by Jamal Nimr, sits at Ramallah’s highest point, almost 1,000 meters above sea level. From it you can see not only Ramallah but also Jerusalem and Tel Aviv.
The Carmel, which opened four years ago, has 100 rooms and suites; the walls are adorned with paintings of Al-Aqsa Mosque and the Jaffa harbor. It’s one of the only hotels in the PA that didn’t shut down during the coronavirus year – in fact, for two months it was a quarantine site for virus patients.
Occupancy was only 20 percent when we visited, Nimr says, because it was Ramadan, a time when people prefer to stay home. “On the weekends before Ramadan we managed to get to 50 percent occupancy,” he notes.
In addition to the Carmel, Nimr also owns the Athens Lodge in the center of the Greek capital, and he is now investing in building a mall at the entrance to Jericho, 200 meters from the famous Oasis Casino, which shut down more than 20 years ago when the Oslo Accords collapsed.
With all the chaos, why invest in tourism of all things?
“In the year before the coronavirus epidemic there was a significant increase in the number of people staying in hotels in the PA, but there were hardly any five-star hotels, so we wanted to show the world that Palestine has a luxury hotel.”
Indeed, according to the Palestinian Central Bureau of Statistics, in the decade preceding the pandemic, tourist stays at West Bank and East Jerusalem hotels almost doubled.
“In 2019 we had a wonderful year, but then the coronavirus hit us badly,” Nimr says. “At the start of the crisis occupancy fell to 2-3 percent. After that we recovered thanks to Arabs from Israel, who came here because there were lockdowns in Israel.”
'The Normalization deals with the UAE and Bahrain are not normal. They are arms agreements. That is not a normal way to enter into the region'
Lately, Nimr notes, Arabs from Israel have accounted for a larger share of the city’s commerce. “The people who are now staying in hotels, eating at the market, shopping at stores and propelling the local economy are Arabs from Israel,” he says. “Under PA regulations, there’s nothing stopping us from hosting Arabs from Israel, so long as they show a vaccination certificate.”
Are Israeli Jews also welcome to stay at the hotel?
“We would be happy to have them, but it’s Israel that bars them from entering PA territory.”
How much does it cost?
“Seven hundred shekels a night for a couple, including a breakfast that is a lot better and a lot fancier than at the Israeli hotels,” he replies with a smile.
Rola Srouji, who sits in the resplendent offices of ULL – Unlimited Logistics – was born into an affluent Nazareth family, which owns the Srouji bus company. She carved out her career on her own. At age 16 she went to Munich on a scholarship from the German school she attended in Jerusalem. After she finished a master’s degree, and after the Oslo Accords were signed, she moved to PA territory in 1994. She initially worked at the German consulate in Jericho, and later became the PA official in charge of the Israeli-Palestinian industrial zones in Tul Karm and Gaza.
At the beginning of the 2000s she found work with the al-Masri family, the richest family in the PA, joining the family corporation Padico. While working with Bashar al-Masri, she learned about the export-import industry while supervising produce exports, particularly grapes from Gaza. “In 2012 I decided to open an office of my own. At first I had an Israel associate, but I decided to part with her,” she relates.
'The Israeli customs authorities drove us crazy. They didn’t work during the lockdowns. It was very difficult to do money transfers'
Srouji has an apartment in Beit Hanina, an East Jerusalem neighborhood, so she can travel relatively freely between Ramallah and Israel. Her elder son completed communications studies at the Interdisciplinary Center Herzliya and is now traveling in Mexico. Her other son is attending medical school in Budapest.
“Our work is that of men,” she says. “I am the only woman in this field in the whole PA. There are men around me all the time. They don’t always behave properly and have to be put in their place. Many men think they can make a woman buckle in negotiations, but everyone who knows me knows that I’m very tough. I’m known as ‘the monster’ in Ramallah.”
Did business suffer during the coronavirus epidemic?
“We had projects that we kept up. The PA is building a new printing press in Ramallah, which will print passports and biometric ID cards, and we were tasked with importing all the equipment for the printing press from India. In addition, we founded companies that offer online fashion and cosmetics purchases. We also considered importing food supplements into the PA, but that is extremely difficult. Our society believes that only a physician should prescribe medication, and the whole field of vitamins and other supplements hasn’t really caught on.
“On the other hand,” she continues, “there were plenty of other problems, and the excessive stress triggered blood clots in my leg that moved into my lungs. The Israeli customs authorities drove us crazy. They didn’t work during the lockdowns. It was very difficult to do money transfers. Israel restricts us in every way. All the goods for the PA are physically inspected, but with Israeli importers only some of the goods are checked.
“When you bring in lighting fixtures, for example, they have to be checked by the Standards Institute,” she adds. “Israeli importers are allowed to bring the merchandise to their warehouse, and the Standards Institute employees go there. But Palestinians aren’t allowed to take the goods from the port or from a licensed, bonded Israeli warehouse. Until the inspector shows up – and that can take at least two months – Palestinians have to pay for storage, and I’m talking about huge amounts, but Israelis don’t have that fee. Under the Oslo Accords a customs agent can’t be Palestinian, and we are forced to use Israeli customs agents. All of this very much increases the cost of importing goods to the PA.”
Are the recent agreements between Israel and Gulf states impacting the Palestinian economy?
“I don’t work with countries in the Gulf, so it hasn’t affected me. But I heard from friends in the industry that it’s created a problem for them and has hurt their business. In the past, Israelis who wanted to export to the Gulf needed Palestinian assistance; now they can work directly with those countries.”
Sam Bahour was born in the United States to a Palestinian father. After the Oslo Accords he decided to leave the good life in Ohio and moved with his wife to Al Bireh, near Ramallah, in order to help establish a Palestinian state. “I have two girls, one was born in the States, she came when she was one year old when we came here, one was born here,” he says. “Both of them are now in the U.S. One has graduated from MIT a couple of years ago, chemical engineering, and the other is studying her last year in Neuroscience in Harvard. My wife is here with me and we are living in my ancestral house in Al Bireh, where my grandfather and father had lived.
Bahour says that as soon as he arrived in the PA he enlisted to help found the Palestinian Telecommunications Company, Paltel. “That was an amazing project, but unfortunately it hasn’t been completed to this day.”
“The key to any Telecom business is technology. To be able to import technology. And Israel is the barrier for us to be able to import any technology. Because we don’t produce technology, so we have to import it. So Israel has control of all of our import. The other resource is electromagnetic spectrum, frequencies, airwaves. Israel is in full control of the airwaves. What they have given Palestinians access to is miniscule. Tiny.
"Having said that, over the years, over two decades, they have continued to increase the amount of airwaves, of frequencies, that they give to the Israeli operators who run their telecommunication networks throughout the occupied territories using infrastructure placed in settlements. So of course, they are at an advantage, as the settlements are all on high grounds that surround the Palestinian cities, so they can not only serve the settlements, but they can also serve all of the Palestinian communities around. It is a blatant violation of Oslo.
“In Oslo,” he continues, “Israel committed to not allowing their companies to provide telecommunication services to Palestinians unless they are licensed with Palestinian authorities. Not one received a license from the Palestinian Authority. But yet at any store you can buy products from [Israeli telecommunication operators] Pelephone and Cellcom, and all of the different SIM cards.”
Are the Palestinians not capable of competing?
“Israel has a larger population, and a wealthier population, so the ability for them to sell communication services at a very competitive rate, the best in the region, maybe the world, is high. For example, competition within the mobile business: the mobile business is run by two companies, Ooredoo and Jawwal. Jawwal has been given frequencies for here and Gaza. In Gaza third generation 3G frequencies have not been given for the other operator. So, in a way, Israel is the King maker of which company will succeed. Just by streamlining import, assigning frequencies or otherwise. The PA has a role in that damage as well it. It’s the Authority. It has the regulatory role. It has failed in producing a competent, regulatory entity independent of the political ministry. Ministries are political, by design.
"The PA’s ability or inability to manage the economic issues soundly is a major issue. They have a lot of political experience. They have a lot of resistance experience. They probably have good CVs in those two areas. On the economic front they are lacking to the point where it has been called incompetent in some areas.”
Are you optimistic about the ties with Israel?
“If I weren’t optimistic, I wouldn’t be talking to you. I may paint a very dreary picture about today’s snapshot, but over all I’m optimistic. The way out of this mess that we’re in is a confederation. For Palestine and Israel is to find interest jointly of how to work together.
"The only way to do that is after the occupation is ended. This is a message to the Israeli side: if you continue to allow your government to deplete hope… to allow the situation to deteriorate to the point where a new generation of Palestinians, another one, is losing any kind of hope you are sending us to two places: violence, and failing to be convinced that a two states solution can be ever achieved. Who benefits from this grave reality? Organizations like Hamas who understands this model and uses it when they want to use it. Who is disadvantaged? People like me who are not violent. You have nothing to fear from the State of Palestinian. Just the opposite. Getting your boot off of the Palestinians neck will allow you to find a partner right next door that you can benefit from as an Israeli business environment. We know the Gulf, we know the Levant, we understand the language. We understand the culture. That can be utilized businesswise. And that’s the organic entry for Israel into the Arab World.”
And what about Israel’s agreements with Gulf states?
“The normalization deals with the UAE and Bahrain are not normal. They are arms agreements. That is not a normal way to enter into the region. If you think sparking an arms race is going to get you love from the Arab world you are being misled.
"I would tell the Israeli business community: what you need to do is to align yourself with the wrongs that have been made, correct those wrongs, occupation being the of biggest of them today. Because we’ve conceded. We’ve accepted the State of Israel. Now we ask you to accept us. Once that ends, we think that both communities today and more so in the future will find a joint interest of how to work together first and foremost in the business. Because that’s the easier place to work together, if you are looked at as equals."
Nadim Khoury’s native village is the only all-Christian town in the PA. Before the coronavirus epidemic, the colorful village in the folds of the Judean Hills was popular with tourists who came to try the Khoury family’s beer, wine and olive oil. These days the village, which sits between Ramallah and Jericho and has the ruins of an ancient church in its center, is still in a “coronavirus coma.”
“In 1994, after the Oslo Accords, I returned to my native village from the United States in the hope of being able to contribute to the establishment of a Palestinian state,” he says. “My father built us a large house and a pool for the grandchildren, and agreed to underwrite my brother’s and my crazy idea of creating the first craft brewery in the Middle East.”
Now, two of Khoury’s children are outstanding students in the United States and Britain, and the other family members help run the business. “My son runs the winery, my daughter runs the brewery, and a niece manages the hotel,” he says with pride. “Fifteen men have already asked for my daughter’s hand (she’s 35), but she refuses – she wants to stay married to the brewery.”
In 2002, the Taybeh Group brand expanded to selling locally produced olive oil as well. “That happened when Jordan stopped buying olive oil from Palestinians, claiming they had enough olives of their own,” Khoury says. “The intifada was then at its height, and the Palestinian farmers had large quantities of olives they couldn’t sell. The village’s school was also affected, because the students couldn’t pay the tuition fees. The priest who administers the school suggested that the students pay in olives instead of money, and he found himself with a thousand barrels of olives that he didn’t know what to do with.
“To resolve the crisis,” Khoury continues, “I suggested developing an olive oil brand, and since then we have been very successful. In 2013 we also established a winery. We did that because there was only one winery in the PA, at Cremisan, next to Bethlehem, and at the time there was talk that it would fall under Israeli control. I thought it was important to have a Palestinian wine made from local grapes. In 2015 we established the hotel in the village, with 80 rooms. Until the coronavirus arrived the hotel thrived, with two to three tourist buses arriving every day, but since March 2020 it’s been closed.
“In spite of all the obstacles, I am still optimistic,” Khoury adds regarding relations with Israel. “There is no other way to build the State of Palestine. I want more Palestinians in exile to come here and follow in my footsteps. Maybe everyone will get drunk and that way they’ll be persuaded to make peace,” he laughs.
On the way back to Israel, the roads traversed exclusively by vehicles with Palestinian license plates gave way to roads where Israelis and Palestinians drive side by side. After the soldier at the checkpoint made sure I looked Jewish, she let me through into Israel, and the Palestinian plates disappeared. Around me Lag Ba’omer bonfires burned, and the roads were packed with thousands of cars carrying celebrants to the great festival on Mount Meron. A few hours later, the festival became a disaster, and a few days before Shavuot the latest campaign of hostilities between Gaza and Israel flared up. Will life in the Ramallah bubble also fall into disaster, as some Palestinian businesspeople warn? Soon we’ll know.
Shadi Atshan, the executive director of the Leaders organization, which was established in 2002 by graduates of Bir Zeit University, set out to establish an incubator for Palestinian entrepreneurs with early-stage startups. He says with pride that some two-thirds of Leaders’ investments in 30 startups have been highly successful.
“Palestinians prefer to develop their projects in Saudi Arabia or Dubai, rather than request an entry permit to Israel and be rejected or undergo humiliations at checkpoints,” he says. “Both sides are losing from the current situation. Israel lacks thousands of engineers, and in the PA there are thousands of unemployed engineers.”
Could the situation improve?
“I am afraid not. We’re lost. In my opinion, Israel will soon reconquer the whole area.”
The pessimistic Atshan points to the window and to the settlement of Psagot, which overlooks Ramallah from above. “Israel controls the water and all the other resources,” he says. “Every attempt at cooperation has failed. Look what happened recently in Jericho. The Japanese invested $150 million to build an industrial zone with an access road to Jordan. The road wasn’t built, so the Jericho industrial zone can’t take off. Would you like another example? In the [new] Palestinian city of Rawabi, near Ramallah, they wanted to organize a show for an audience of 40,000. The amphitheater was built and everything was ready. But there’s one problem: Israel isn’t willing to remove the checkpoint outside the city, meaning that the audience can’t get there.”
Do young Palestinians have a future? Do they intend to stay here?
“We have a brain drain problem. Many Palestinians are leaving. But my friends and I don’t intend to give up. I have two children – a 10-year-old daughter and a 7-year-old son. I was born in Ramallah. I have been here all my life, and even though I have a Green Card I intend to stay here.”