Jewish-Arab venture ends bid to boost Palestinian economy

LOS ANGELES, Aug. 4 (JTA) — An ambitious joint Jewish-Arab enterprise founded to boost economic development in Palestinian self- rule areas is shutting down, a victim of the waning peace process. “We’re winding up our operations and terminating our relationship with the U.S. government,” said Joseph DeSutter, executive director of Builders for Peace. “For all intents and purposes, we’re out of business.” The demise of Builders for Peace comes as the Palestinian economy deteriorates and the stalled peace process took another blow with last week’s double suicide bombings in Jerusalem. The Washington-based group was launched in November 1993, two months after the late Israeli Prime Minister Yitzhak Rabin and Palestinian leader Yasser Arafat shook hands on the White House lawn. In those days of optimism and good will, it seemed possible to overcome decades of violence and distrust. Vice President Al Gore suggested at the time that the Jewish and Arab communities in the United States apply their business acumen and capital to jump-start business ventures in the Gaza Strip and the West Bank. Gore believed that the peace process would fail if the Palestinians did not experience economic improvement. Mel Levine, a Jewish attorney and former congressman from Los Angeles, and James Zogby, head of the Arab-American Institute, were named co-presidents of Builders for Peace. The organization was launched with an operating grant of $350,000 for the first year from the U.S. Agency for International Development. American and Israeli officials were enthusiastic about the project. Foreign Minister Shimon Peres declared that $1 invested in the Palestinian economy would be worth $2 spent on Israeli security. From the beginning, however, the task facing Builders for Peace proved a lot more frustrating than anticipated. In its close to four years of existence, Builders for Peace lent a hand to only a few projects — and even their success is in doubt. The showpiece project is the Gaza Marriott Hotel and Business Center, an $80 to $100 million project on the Mediterranean coastline. DeSutter credits the tenacity of Arab-American architect Ziad Karram for keeping the project alive, despite constant setbacks. Ground was broken in March, and Levine is “cautiously optimistic” that the complex will be ultimately completed. A group of upscale condominiums have been built in the West Bank town of Ramallah. A bottled water plant in Jericho and a factory for manufacturing pre-cast concrete walls for modular housing are in different stages of development. Together, it is not an impressive track record, but there is disagreement over who is to blame. The participants agree that an international consortium of donor countries did not come through on pledges totalling $2.4 billion for building infrastructure in the self-rule areas that would help support the joint ventures. They also agree that the lost political momentum in the peace process inevitably soured the investment climate. After that, opinions divide. Levine believes that the main stumbling block has been Arafat’s failure to establish basic legal and commercial structures. “I told Arafat many times that the PA had to provide accountability and transparency for all negotiations and transactions, but he was never interested enough to do anything about it,” Levine said recently. “After a while, it seemed that the Israelis were pushing much harder for Palestinian economic development than the Palestinians themselves,” he added. DeSutter agrees. “Until agreements can be reliably entered into, honored and enforced, few people will invest,” he said. Endemic corruption, bureaucratic foot-dragging, huge overheads and the ability of Arafat cronies to muscle other businessmen aside presented additional deterrents to foreign investors. While acknowledging the shortcomings of the Palestinian Authority, Zogby placed the blame mainly on Israel. “The Israeli civil administration may have left, but Israel still dominates the Palestinian economy,” Zogby charged. “Everything has to go through Israeli middlemen.” The biggest distortion in the Palestinian economy is caused by frequent closures of the territories, Zogby said. Closure prevents Palestinian laborers from reaching their jobs in Israel, but equally as damaging, they prevent Arab businessmen from importing raw materials and exporting finished goods, he explained. “You can’t do business that way,” he added. Border closures generally follow terrorist attacks on Israeli civilians, such as last week’s suicide bombings that killed 13 people. Israeli security measures force trucks to wait in long lines at checkpoints and border crossings and make the transport of perishable goods all but impossible, Zogby said. Meanwhile, there is little doubt that the Palestinian economy is in shambles and presents a potential powder keg. A recent UNESCO report cites unemployment exceeding 50 percent. By practically all other indicators, including national and per capita income, the Palestinian economy has drastically declined since the first Israeli-Palestinian agreement was signed in September 1993. “We had hoped to accomplish more, but at this point, we’ve done all we can,” said Levine. “Whatever comes next will have to be done by the people of the region.” Zogby, alluding to his friendship and respect for Levine, concluded bitterly that “both of our visions have been betrayed.”