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Monday, December 14, 2015

Ramallah hosts first Palestine exporter showcase

 
  • Success will depend on accessing and competing in developing markets
  • Event targets stone and marble, agriculture, food and beverage, pharmaceuticals, and Information and communications technology (ICT)
  • Israel’s influence over transportation links, invoicing and taxation remains a point of contention


  • Commerce depends on accessing and competing in global markets
    The Palestinian territory’s first exporter week launched in late November, bringing together hundreds of attendees in the West Bank to promote the region as a global supplier of products and services. Event organizers and speakers were keen to establish an economic-based narrative under the banner of “export-led prosperity”.
    A handful of political and industry supporters from importing markets – Canada, the EU, the US and Turkey – spoke as partners of Palestinian private sector development.
    Katherine Verrier-Frechette, representative of Canada to the Palestinian Authority, said that for small economies like Palestine’s (2014 GDP $7.5bn), success will depend on accessing and competing in global markets.
    As part of this strategy, Palestine is highlighting sectors such as stone and marble, agriculture, food and beverage, pharmaceutical, and other industries. Information and communications technology (ICT) in particular is making gains as heavyweights such as Microsoft, Hewlett-Packard and Cisco outsource services to local companies. ICT also recorded the highest output per employed person, at $93,200 in 2014 (compare with services at $14,500), according to the Portland Trust.

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    Exports have been growing, at some 300 per cent over the last 10 years to $1.1bn for goods and services in 2014, and reached more than 100 countries, according to PalTrade, organizer of Exporter Week and non-profit membership organization set up to improve trade competitiveness.
    US-based Minnesota Cut Stone was at the conference to discuss importing activities in the stone and marble sector. Jake Blom, general manager, said the company began partnering with Jerusalem Stone Group because of consumer demand for Palestine’s limestone colours.
    Expertise and technology necessary for detailed fabrication was available on site, so shipping waste was avoided, he noted. The company plans to provide an American branch for Jerusalem Stone Group.
    But establishing business was not without its obstacles. “There seems to be a lack of certainty in time and schedules,” Blom said, pointing to September’s holidays as a major limitation causing production and transportation delays.
    Israel’s influence over transportation links, invoicing, and taxation were a clear point of contention throughout the conference, as well as issues with Jordan over introducing bespoke barcodes to identify Palestinian products.
    Middle East turmoil stemming from the Syrian conflict was not widely perceived as a risk factor. To the contrary, Palestine has a track record of outperforming markets during times of instability.
    Palestine Exchange-listed Arab Palestinian Investment Company (APIC) has seen its revenues go up to $536.2m in 2014, a 20.6 per cent jump year-on-year. Fida Musleh-Azar, Investor Relations at APIC, said that given the current uncertainty, Palestine has shown remarkable stability over the past few years.
    “We are used to working in disturbance. You always do contingency plans,” she said. “Life goes on. You cannot sit back … this is not the way it works in Palestine.”

    Friday, December 4, 2015

    Israel’s Overlooked Issue With Palestinians: Cellular Service


    A Palestinian driver shows the “Azmeh” application on his mobile phone while waiting in traffic at Qalandia checkpoint, November 10, 2015. Credit: AP
    The long-awaited awarding of 3G frequencies is a good sign both for app users and the overall Palestinian economy, the think tank Al-Shabaka says.

    Amitai Ziv, Haaretz, Dec 02, 2015 1:03 AM

    The army made the historic announcement on November 19: Israel and the Palestinian Authority had agreed for third generation cellular networks to operate in Palestinian areas of the West Bank.

    But the statement, on which the army’s Coordinator of Government Activities in the Territories has declined to provide details, raises more questions than it answers. To really understand it, you have to know that 3G services were launched in Israel in 2006. The Palestinians are still on 2G, which means no fast Internet, and prices are way out of line.

    Without the allocation of new frequencies, Palestinians have been held hostage by the Israeli government. Even with an advanced smartphone, forget about using a navigation app or sending pictures, for example.

    A day after the announcement, the International Telecommunication Union, a UN agency, released a statement of its own.

    The ITU said it “welcomed the bilateral Israeli-Palestinian agreement on the assignment of frequencies in the 2100 MHz band for Palestinian cellular operators.” The frequencies would be awarded to the two Palestinian cellular incumbents: Wataniya and Jawwal, a subsidiary of the Palestinian telephone company PalTel. 

    “Palestinian operators will be able to construct broadband cellular networks completely independent and separate from Israeli networks,” the ITU said. “Moreover, the operations of the Palestinian and Israeli broadband cellular networks will be regulated respectively by the Palestinian and Israeli authorities.”

    Israel had delayed allocating 3G frequencies to the Palestinians for years. The Israeli Communications Ministry and the army’s Civil Administration in the West Bank are responsible for those frequencies. Also, Israel is responsible for providing allied tech services to the Palestinians — both under international protocol and the Oslo Accords.

    In August, after more than five years of delays, officials of the Palestinian Telecom and Information Technology Ministry met with their Israeli counterparts over allocating 3G and 4G frequencies. Palestinians said the Israelis had agreed in principle to provide the frequencies.

    Israeli cellular companies have had a much easier time receiving such frequencies; as a result, many Palestinians use the Israeli companies.

    Jawwal was the first Palestinian cellular company and still has the largest customer base: 2.75 million in the West Bank and Gaza Strip. PalTel, Jawwal’s owner, is the largest firm on the Palestinian Stock Exchange — a third of the value of all stocks listed there. It’s also the second largest employer in the PA.

    Wataniya is owned by a Qatari company, Ooredoo, which owns cellular firms all over the world, including in Tunisia, Algeria and Myanmar. It started operating here in 2009 and has 620,000 customers.

    According to Israeli estimates, there are some 3.4 million cellular subscribers in the West Bank and Gaza.

    Tens of millions of dollars

    Communications infrastructure, especially cellular frequencies, are a major issue for the Palestinians, so the Palestinian-American Al-Shabaka think tank took a look at the issue in its November report “ICT: The Shackled Engine of Palestine’s Development.” With “ICT,” the Washington-based think tank was referring to information and communications technology.

    Al-Shabaka estimates that “Palestinian operators lose $80 to $100 million annually as a result of the lack of 3G services.”

    The report’s basic assumption is that the information and communications technology industry is the “pillar of all other sectors” and “enables and enhances different dimensions of social and economic development. In addition, there is a strong positive correlation between direct investments in ICT and job creation.” It says this sector accounts for 5.6% of Palestinian GDP.

    Al-Shabaka lists a number of problems affecting the Palestinian ICT sector. First is frequencies. The 4.8 megahertz Jawwal received in 1999 served 120,000 people, a customer number that has since ballooned by 20 times. In comparison, Cellcom enjoys 37 megahertz.

    “Basic functions that users in other countries take for granted are simply not available through Palestinian providers, forcing both the business community and other customers to look elsewhere to the advantage of Israeli Internet providers,” the report says.

    It’s the Israeli operators who profit from the lack of cellular frequencies, says Al-Shabaka. They build cellular antennas in the settlements, sometimes on private Palestinian land, and provide services to Palestinians.

    The Palestinian companies can’t put up antennas in Area C — about 60% of the West Bank’s territory — which is under exclusive Israeli control. It’s estimated that some 20% to 40% of the Palestinian telecom market is served by Israeli companies, which don’t pay taxes to the PA. The Ramallah government thus loses an estimated $10 million to $40 million a year.

    Israeli cellular operators declined to answer TheMarker’s questions on their antenna numbers, revenues or customer numbers in the West Bank, saying these were commercial secrets. Some companies said they didn’t sell SIM cards in the West Bank but such cards may reach the area, which is outside the companies’ control.

    Al-Shabaka laments Israel’s control over the Palestinian telecommunication infrastructure in the West Bank.

    “Companies rarely get permission to build service towers in Area C, but they are also prohibited from building switches in Area A, which is supposed to be under sole PA control under the Oslo accords,” Al-Shabaka writes. “This has forced Jawwal to locate its switches to London and Jordan, while Wataniya Mobile had to build them in East Jerusalem, under Israel’s control.”

    The fragmented Palestinians

    Sam Bahour, one of the authors of the Al-Shabaka report, notes the great demand.

    “The Palestinians are a group that loves technology, and I have seen more advanced smartphones here than when I lived in the United States. The young people, like young people everywhere in the world, want to be up to date with the latest trend,” he told TheMarker. So the allocation of 3G frequencies is vital."

    Bahour said the availability of communications technology was particularly important to the Palestinians; after all, the West Bank, Gaza and East Jerusalem are separated from one another, and the West Bank is separated from communities overseas.

    Meanwhile, the Israeli cellular companies providing service in the PA don’t have licenses from the PA — something that breaches the Oslo Accords, Bahour says.

    And it’s always possible to use the security argument. It’s always possible to claim that an attack will be planned using a smartphone.

    “And if I do it over an Israeli network, what’s the difference? In any case, the entire network is monitored,” Bahour says. “When you call me in Ramallah you dial the 02 area code. Our telephone network has remained operating in all the rounds of the conflict, and it seems there’s a good reason.”

    Al-Shabaka says the first step is for Israeli restrictions on the information and communications technology to be lifted.

    “No matter how far a new agreement goes, it will not be fully effective unless Israel completely lifts its hand off Palestine’s ICT sector,” the think tank writes. “If it does not, the PLO/PA should use Palestine’s observer state status and ITU resolutions to lobby for free access to its full frequency spectrum and a Palestinian international gateway that is independent of the Israeli one.”

    Al-Shabaka also says foreign investment in the Palestinian technology sector should be encouraged, along with further cooperation with Palestinian companies.

    Another key step is replacing the Palestinian communications ministry with an independent communications authority. In addition, the Palestinian Education Ministry should promote information technology in schools — and “hold Palestinian academic institutions to a higher global standard in this sphere and to develop Palestinian skills in innovation, creativity, research, critical thinking, and science and technology.”

    Finally, Al-Shabaka says there is room for promoting communications services on a local level in the PA without waiting for outside help. The think tank has called on the cities to lay fiber-optic cables and microwave links, and build public Wi-Fi antennas as an alternative to the cellular networks.

     “Municipalities can also add solar power panels onto their street lighting poles as well as a wireless network to ensure citywide Wi-Fi,” the report states.

    Al-Shabaka also calls for the building of mesh wireless networks, which are not dependent on centrally located towers and can bypass obstacles like hills. They’re a promising new avenue for municipalities.

    In conclusion, Al-Shabaka says the new agreement may lead to major changes, but it remains to be seen how it will be implemented. “Regardless, Israel is unlikely to completely lift its hand from this key sector,” the think tank says. 

    Amitai Ziv
    Haaretz Contributor