US embassy cable - 05TELAVIV2205

UNCLAS SECTION 01 OF 02 TEL AVIV 002205 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, IS, GAZA DISENGAGEMENT, ISRAELI-PALESTINIAN AFFAIRS, U.S.-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 
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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. 
 
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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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