PA Under Fire for Accepting Gift of Gaza Hothouses

The purchase by wealthy foreign Jews of hothouses belonging to Gush Katif settlers for the Palestinian Authority has received a great deal of publicity in recent weeks, but little has been said about Palestinian concerns about the deal.

"We received a gift and we can't refuse it," is how a Palestinian source summed up the position of PA Chairman Mahmoud Abbas for Haaretz. Abbas opposed the deal for months but finally succumbed to pressure from Vice Premier Shimon Peres, the Economic Cooperation Foundation (ECF), senior State Department officials and others.

The Palestinian reservations came for political, economic and social reasons.

The Palestinian Investment Fund (PIF), headed by PA Finance Minister Salam Fayad, accepted responsibility for the "gift," which cost the donors - chief among them former World Bank chairman James Wolfensohn - about $14 million.

The Palestinians will continue to grow crops for export and market them through Agrexco and other Israel companies. The initial assets will belong to the Palestinian people, through the PIF, and will be managed by the Palestine Development Company, a private body.

In the event that the deal proves profitable, the hothouses will be sold to private individuals or companies.

Boaz Karny of the ECF says the deal is a good one for the Palestinians for several reasons. He believes it could add 5 percent to the Palestinian GDP, based on the annual profits of $75 million earned by the settlers from the hothouses; the European market, where the produce is headed, is a guaranteed and expanding market; the operations will provide about 4,500 Palestinian jobs; the deal and the entailing international involvement in it guarantee that the Israel will not block access from the Gaza Strip to Israel, the West Bank and shipping ports; and according to the Oslo Agreement, the Mekorot water company is supposed to double the 5 million cubic meters of water it currently sells to the PA every year, obviating the need to pump water from the Gaza Strip's aquifer. Finally, Karny says, the investment does not affect the existing Palestinian agriculture sector, which receives aid from other international organizations.

Abd al-Karim Ashour and Masoud Kishta of the Agricultural Relief Committees voiced reservations about the "4,000 dunams [1,000 acres] of hothouses that are being forced on the Palestinians as a fait accompli." They say that without the unasked-for addition, it would have been possible to invest money, human resources and ideas in restoring and developing the existing agricultural sector and the farmers who have been hurt so badly during the past five years.

Ashour and Kishta say that hothouses located on sandy soil use more water than in areas with a lower water percolation rate, and that they fear the additional cultivation area will drive down the cost of produce in Gaza, which is already low due to Israeli restrictions on the sales of Gaza Strip produce within Israel. Ashour and Kishta also say that veteran Palestinian farmers will be harmed by the special considerations extended by Israel to the hothouse exports, a situation that will create an agricultural monopoly and increase social frictions within the Gaza Strip.

The main opposition to the deal, however, comes from fears that it will require additional pumping from the Gaza Strip acquifer and render more of the water in it unsuitable for drinking. The settlers in the Gaza Strip enjoyed unlimited amounts of high-quality water, using nearly ten times the amount per person used by the Palestinians, according to PA figures. Ahmad al-Yaqubi, director of water resources and planning at the Palestinian Water Authority, says that negotiations over the PA's purchase of five million cubic meters of water annually from Mekorot have been held up for years, partly due to the PA's inability to pay. He does not expect this to change anytime soon.

A Palestinian source who participated in the negotiations over the hothouses said that forcing the Palestinians to accept them and publicizing the deal are part of attempts to divert attention from the political aspects of the disengagement to economic ones.