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Businessman Hopes That, This Time, Building Palestinian Economy Will Forestall Violence

February 17, 2005
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Leo Kramer wants American Jews to think more about morality, the Torah and good business sense when it comes to relations with the Palestinians. The Washington-based businessman says there will be hope for Israel only when the Palestinians themselves can hope for a better future — which, he argues, must be rooted in a stable Palestinian economy.

“American Jews should apply the Torah and the American tradition of how people are treated to the Israeli situation. In doing so they will help the Israelis have a better life,” Kramer said in an interview with JTA while on a recent business trip to Israel.

“The tragedy of this whole thing, among many things, is that the Jews, being committed to the social teachings of the Torah, received the begging and pleading of the Palestinians for 40 years but did not respond until there was physical violence,” he said. “So we taught the Palestinians that physical violence works, not moral commitment.”

Such thinking was standard fare in Israeli and American Jewish circles during much of the 1990s. Israeli and American Jews invested heavily in Palestinian areas during the Oslo peace process, and Israeli officials went around the world raising funds for the Palestinians based on the idea that a better economy would encourage Palestinians to build their own society rather than seek to tear down Israel’s.

But the Palestinian Authority discouraged cooperation with Israel, and Palestinian terrorist groups frequently targeted investments, such as industrial parks, that were meant to improve the Palestinians’ standard of living. That led some Israelis to feel that Kramer’s approach was tried and proved naive.

Still, Kramer argues that Israelis never paid enough attention to how much of a stranglehold they imposed on Palestinian economic development.

The Washington-based Kramer, 78, who has testified on the Israeli-Palestinian conflict before the U.S. Senate, is a veteran importer and exporter who has negotiated trade deals with various Third World nations. He was asked by Israel to help launch investment in the Palestinian economy in 1994.

He says Israelis and American Jews must stop blaming the Palestinians for the conflict and look to what they have the power to do to change the situation.

Kramer is a frequent visitor to Israel and the West Bank, cultivating leads for new investment opportunities now that peace appears again to be in the offing. He has had two parlor talks since December, drawing interested potential investors from the Washington-area Jewish community.

Kramer now is working on plans for two major projects that were put on hold since the intifada began in September 2000. The first is a college in the Gaza Strip, to be built under the auspices of the P.A.’s Ministry of Education. The school will teach management and offer courses on marketing, purchasing supplies and running a factory.

Kramer hopes the school will begin operating in the next year with several hundred students.

Kramer also is involved with plans to build a plant near the West Bank city of Ramallah that will produce and package olive oil for American and British markets. The plant is projected to employ about 50 people.

Kramer first became outspoken about Israeli treatment of Palestinians 12 years ago, after visiting the Gaza Strip for the first time. Seeing the poverty and the Israeli army’s treatment of Palestinians “was a terrible shock,” he said.

He was surprised by the economic limitations in Gaza and especially disheartened to see Palestinian farmers who had to choose, he says, between leaving oranges to rot on their trees or selling them below market price to Israel’s produce monopoly.

Experts say this often was less an issue of Israeli vindictiveness than an Israeli failure to set free a dependent economy.

Kramer briefly helped facilitate the export of strawberries from Gaza to England and the export of grapes from the West Bank.

How the Palestinian economy fares will help determine Israel’s future, and how the Israelis treat the Palestinians is the key to solving the conflict, according to Kramer.

“The bottom line is I don’t think our people will have a happy life until they also have a happy life,” he said.

Labor Party legislator Efraim Sneh, who has known Kramer for several years, agrees.

“I share his main ideas that without economic growth there is no chance of a peace process with the Palestinians, and that a sound economic basis is crucial for all possible political solutions,” Sneh said.

Others, however, note the massive corruption under the late Palestinian Authority president, Yasser Arafat, when hundreds of millions of dollars were diverted to private bank accounts or to terrorist operatives.

“There is little Israel could have done under circumstances of massive corruption,” said historian Michael Oren, a senior fellow at the Shalem Center in Jerusalem.

Oren takes issue with Kramer’s argument. Economic advancement is important to peace, he said, but the linkage is not so clear-cut.

“There is no sure-fire connection between employment, income levels and terror,” Oren said. “Suicide bombers, when they are asked to list reasons why they do what they do, say the desire to serve Islam, to bring honor on themselves and families, and occasionally vengeance.”

Kramer is fond of asking provocative questions, pushing people’s buttons and making the Jewish establishment squirm. He faults the organized Jewish world for not thinking out of the box and for not taking Israel to task on ethical issues.

“I think the burden is on our side,” Kramer said. “You cannot be the strongest, the wealthiest, the greatest military power, the one with the most money and most experience” and then put the blame for the conflict on the other side.

Freddy Zachs, a retired Israeli army general who now works as a businessman, has known Kramer for 15 years.

“He’s a good Jew and a good businessman in the United States and Israel, and his direction is a good one. He wants very much to help find a solution to find peace with the Palestinians,” Zachs said.

P.A. Deputy Foreign Minister Majdi Khaldi said the Palestinian Authority views Kramer as a friend with good intentions.

“He tries all the time to do his best to reach the Palestinian Authority leaders in order to explain what he can do, in order to help,” Khaldi said. “He is trying to do something.”

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