Behind the Headlines: Opening of Gaza Industrial Zone Heralds Economic Opportunities
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Behind the Headlines: Opening of Gaza Industrial Zone Heralds Economic Opportunities

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The slick brochure for the Gaza Industrial Estate calls it a “Gateway to Regional and International Markets,” but leaders on both sides of the border between Israel and the Gaza Strip hope the Palestinian project will also open a doorway to peace.

Just over 15 miles from the new Gaza International Airport and a few minutes drive from the Israeli border, an octagonal water tower rises over the 123.5- acre site, which is known to Israelis as the Karni Industrial Zone.

Coca-Cola is reportedly one of four companies to have contracted space in the industrial park — five more are expected to sign shortly — which may eventually accommodate Palestinian and joint Israeli-Palestinan ventures.

Operations are slated to begin in January 1999.

Bashir Rayes, the marketing manager for the private enterprise in charge of the industrial zone, said his company, the Palestine Industrial Estate Development and Management Company, hopes to attract labor-intensive industries. Textiles and food processing companies are likely possibilities.

The industrial zone is intended to create 20,000 jobs, mostly for women, and perhaps more than twice that many jobs indirectly. The unemployment rate in the Gaza Strip is nearly 30 percent, according to the United Nations.

In early December President Clinton told a gathering of international donors in Washington that Palestinian terrorism occurred in part because, in the depressed economic circumstances of the Palestinian Authority, young Palestinians have “nothing better to do.”

Those involved in the zone believe that the new employment opportunities and commercial activity will contribute to a substantial future for Palestinians and therefore to a lasting peace on the ground.

“Where there is money passing, there is no shooting,” said Shai Chermesh, the head of the southern Israeli regional council for Sha’ar Hanegev, to a group of a 30 North American Jewish leaders he led into the industrial zone last month as part of a daylong field trip.

The British-educated Rayes echoed these sentiments.

“When it comes to business, we like each other a lot,” he told the visitors, all delegates to the UJA Federations of North America General Assembly, which was held in Jerusalem.

Companies would reap the benefits of low rents and an inexpensive skilled labor force that, Rayes pointed out, has experience from working in Israeli industries.

Products going in and out of the industrial zone would enjoy direct access to Arab markets, as all goods would be stamped “Made in Palestine.”

Dov Lautman, an Israeli industrialist who was the Israeli chair of the General Assembly, said he saw the zone as a “win-win” situation.

He said he saw no problem with the “Palestine” label.

“Let them have pride if that’s what helps,” he said in an interview.

The Gaza Industrial Estate was developed as a prototype for a series of industrial zones that could provide investment incentives and employment opportunities in the Palestinian autonomous areas — and also promote Israeli- Palestinian economic cooperation.

But the zone’s viability for investors hinges on the area’s exemption from periodic border closures, which Israel has implemented after terrorist attacks.

To satisfy its security concerns, Israel has granted the industrial zone a special, “somewhat sterilized” status, treating it as a separate entity from Gaza, according to Rayes.

There is a border crossing point at Karni. Goods produced at the industrial estate would enjoy special duty-free access to foreign markets, with expedited security clearance — part of what Rayes calls a “one-stop shop.”

Israel has insisted on performing its own security inspections, but a spokesman for the Israeli government said these procedures would not interfere with business at the site.

Rayes said he understands — and even shares — anti-terrorist concerns, but views the industrial zone first and foremost as an economic opportunity.

“Everybody is against bombing,” he said. “We feel sorry, but also it touches our interest.”

The $90 million project is financed by grants and loans from Israel, the World Bank, the European Investment Bank, the U.S. Agency for International Development and other development agencies — as well as from PIEDCO’s parent company, the Palestine Development and Investment Company, the largest private company in the Palestinian Authority.

With that kind of financial backing and international interest, Rayes asked the visiting North Americans, “Do you think I would let a guy come in and destroy this place?”

“We’re totally against terrorism,” he added, “as Palestinians, as businessmen, as investors.”

As Rayes answered questions and described the project’s potential, Chermesh moved among the PIEDCO representatives and plainclothes Palestinian Authority policemen, shaking hands and exchanging warm greetings.

“Not every area is Karni,” Chermesh told the North Americans after they boarded the bus to Jerusalem.

But “if everything is progressing as it is here,” he said, “there is hope for the peace agreement.”

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