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Private Sector Development in Palestine

by Social Edge last modified 2008-07-01 06:30

Hosted by Adam Neiman (July 2008)

palestine private sectorThe recent Palestinian Investment Conference in Bethlehem marked the beginning of a new international initiative to stimulate private sector development in the West Bank. The event was very promising- a potentially problematic quality in an over-promised land. There may not be a place in the world where private sector development is more urgently needed or more challenging.

Development is no substitute for a diplomatic solution but no diplomatic solution can be sustained without a sustainable Palestinian economy. The political situation places many roadblocks to economic development – literal as well as figurative.

There are also some unique contours to the Palestinian economy that make traditional developmental models problematic.

Palestine has a narrow resource base, including limited water supplies and an unemployment rate (40%) comparable to the most disadvantaged countries of the developing world. But because of the donor countries and the linkage to the Israeli economy, the cost of living is far higher. A traditional free trade model, starting on the bottom rung and competing as a low wage producer, is not an option.

But Palestine has also a few advantages. The population is much better educated than usual for an early stage developing country. It has a market economy with a remarkably resilient and resourceful business community. There is a far-flung Diaspora, many of whose members are highly successful entrepreneurs and financiers. Because of its geopolitical importance, there are significant resources in the form of loan guarantees from the donor countries for internal investment as well as other types of developmental assistance.

My company, No Sweat Apparel, has been working on the West Bank since 2006. We produce organic cotton T-shirts at a sweatshop-free Palestinian owned factory on Virgin Mary Street in Bethlehem.

I came away from the Palestinian Investment Conference both encouraged and concerned. I have a couple of questions in particular that I thought the community of social entrepreneurs here at Social Edge might have some insight into:

1.    If the free trade, lowest wage producer model doesn’t apply, what kind of developmental model might work?

2.    Could “Made in Palestine” products have a competitive advantage? If so, how and where?

 
Join Adam Neiman, CEO of No Sweat Apparel, in the conversation.

"Made in Palestine" Brand

 Posted by Peter Benkendorf at 2008-07-01 12:00

Even better would be a brand that was made by Palestinians and Israelis, with a percentage of the profits going to support non-profit organizations that bring Israelis and Palestinians together, especially youth programs.

made in Palestine brand....

 Posted by Adam Neiman at 2008-07-02 09:36
Peter, you'll be glad to know there have been a couple of moves in this direction. Peaceworks (food products like pesto) is one such initiative, started in the 90s during Oslo. G.Hh.ost (globally hosted operating systems - cloud based computing softwear) is another, due to launch on Halloween. we're working on a Wholly G.Ho.st. T-shirt w/ them for the launch!

But it's hard to understate the enormous resentment, anger & hostility 40 years of occupation has created, or the Palestinians sense of isolation & need for support & autonomy AS Palestinians. Joint enterprises w/ Israelis make Israelis feel wonderful but make most Palestinians feel like an appendage.

Marketing Palestinian FAIR trade

 Posted by Elizabeth Tomber at 2008-07-01 15:32

In a time when more consumers are conscious of Fair (over Free) trade product and the fact that as consumers we are able to vote with our dollars, I think there is a market and enthusiastic consumers ready for products that support both the Palestinian economy and the fair trade economy. It is a matter of marketing and education. The more exposure companies like these have, the more interest is developed in supporting them.

re: Palestinian fair trade....

 Posted by Adam Neiman at 2008-07-02 09:45
Lizzy I couldn't agree more. Palestine could and should be the world's 1st full scale model for Fair Trade development. the political need that the producers see the benefits of trade immediately in here couldn't be more obvious. but "serious people" (i.e. folks w/ serious amounts of money and power) and serious publications like the Economist pooh-pooh fair trade and don't consider it a serious solution. any ideas why that might be?

development under occupation

 Posted by Jake Lomax at 2008-07-02 00:04

Hi Adam,

Good effort bringing business to Palestine. As your website shows, “Made in Palestine” certainly generates interest and free publicity, and in the Tshirt business that has to be a competitive advantage.

As to the developmental model... Development under occupation is problematic. The role of business in Palestinian development must be to serve to reduce dependency on Israel, and to serve to increase resilience (or steadfastness) under occupation. Providing jobs is part of that.

Enabling the population to survive under occupation should be the primary development focus in the Palestinian context. To go beyond this requires political action; I'd be surprised if you find a development model that you can apply here. A nation needs control of its resources, of its borders, of its own population before it can develop. Palestine does not control much of its business environment; Israel does.

Jake

re:development under occupation

 Posted by Adam Neiman at 2008-07-02 11:36
Jake, thx and building steadfastness was certainly a major objective when we got started and still is. But Israel's motivations may have changed somewhat vis-a-vis the West Bank since Lebanon & the split w/ Gaza. To prevent complete encirclement by Iranian clients, Fatah MUST succeed in economic development in the very near term. The Israeli establishment knows this. Hopefully, now that the 60th anniversary celebrations are over there will be some easing of movement on the West Bank.

we've got this tricky chicken & egg problem here. I like Lizzie's notion of a fair trade model. even if we can't get far beyond blueprints & a foundation at this juncture it's essential that we have something in place that is sustainable and meets the needs of the dispossessed. that can only happen if social entrepreneurs have strong a hand in it. when development does get underway the pace will be fast since there's so much pent up demand & energy. If the immediate benefits only flow to the secular elite, the dispossessed are sure to bust the bubble- again.

Made in Palestine

 Posted by Stephanie Doust at 2008-07-02 01:36

Hi Adam-

Firstly, sorry that I didn't catch you in Bethlehem. I was probably on the other side of the crowd of 2000+people!

Secondly: a brief comment about Made in Palestine products. I think they could have a great role in advocacy- both internal and external. I was very, very naive before starting work in Palestine. My understanding of the situation was limited to CNN and Fox News. One thing that surprised me is the dominance of imported (particularly Israeli products) on the supermarket shelves. I think - and correct me if I'm wrong- that of all consumer goods purchased in Palestine, only 36% are locally made and owned, meaning that there is great potential for Palestinians to increase their own market share of FMCs within their own country.

Similar to what Australia did with its campaign Made in Australia (think cute kangaroo, gold and green, and lots of celebrity endorsed advertising), I think there's room for energising the local community to buy Palestine.

And externally - well, imagine linking a travelling, high profile international photo exhibition (ala MILK) about Palestine: realities, perceptions and the future - with a brand driven campaign, using t-shirts as the vehicle. Imagine Ms Rice the next time she visits Ramallah in a Made in Palestine t-shirt. Now, THAT'S public diplomacy!

Cheers-

Stephanie

re:Made in Palestine

 Posted by Adam Neiman at 2008-07-02 11:45
Stephanie, you’re one of the folks I most wanted to meet that I didn’t! When can we talk? I was actually planning on emailing you today to make a time.

There’s definitely room to take market share away from the Israeli products internally. As for stimulating external demand- Condi Rice is nice but I'm aiming for the UN special envoy for refugees- Angelina Joeli!

Re; [Adam] re: Palestinian fair trade....

 Posted by Charles "Hipbone" Cameron at 2008-07-02 16:25

Hi Adam:

QUOTE: "serious people" (i.e. folks w/ serious amounts of money and power) and serious publications like the Economist pooh-pooh fair trade and don't consider it a serious solution. any ideas why that might be? :UNQUOTE

Isn't it a sort of tail-end result of thinking the world's a zero-sum game, and that therefore, anything that makes life a little easier for someone else is a priori making it harder for you? Or to put it another way, isn't it just part of the maturing process, whereby we think for a while that anything good must be suspect, "too good to be true"? - I call it the maturing process because while it seems to me to be a classically immature sway of thinking, there's hope that further growth will occur, and is in fact occurring!

Those are the two ideas that hit me right off the top of my head.

re: Palestinian fair trade....

 Posted by Adam Neiman at 2008-07-03 06:36
Charles, those are both very sensible ideas, but they don’t account for the fact that fair trade has been enthusiastically embraced by the educated middle classes (especially women) who have fueled its rapid growth. The different class attitudes suggest to me that issues of status and power may be decisive here. The unique sales proposition of fair trade is that it empowers anyone willing and able to pay a 10-25% premium for coffee or clothing to grapple and help solve some of the thorniest problems in the world. That has to feel threatening (and perhaps appear to be utterly cynical) to those who know how hard it is to solve those problems, even by going to Davos every year!


going back to g.ho.st

 Posted by jo davidson at 2008-07-03 00:28

Could the example of G.HO.ST, and its groundbreaking development model of 40 professional Palestinian's and Israeli's working together across the divide in collaboration, be the right road map to bring prosperity to Palestine? Perhaps it's businesses and not politics that will bring peace.

plus educational component?

 Posted by R.E. Szego at 2008-07-08 16:41

Adam,

I really like where you're coming from with this idea being based in building economic opportunities through Palestinian ownership in the occupied territories.

I'm wondering if there could be an educational component as part of the "Made in Palestine" labeling. For example, this could happen in the paper tags that are attached to the garments at the end of production. I definitely acknowledge that this could be tricky, in wanting to be careful of potential political implications, especially amid a region with such heated politics. But I also think that - like what one of the other respondents noted - most people don't know a lot about the economic situation or other details related to the occupation, the Palestinian people, and the Palestinian diaspora. This is especially so given the mainstream media bias and/or lack of coverage in the US.

I wonder if there's a way to start a conversation by even just putting the most basic information into the product (some of the facts you give above) as a means of possibly influencing people to seek more information.

  1. E.

re:plus educational component?

 Posted by adam neiman at 2008-07-23 09:23
This is an excellent idea, Reszego and is on every hang tag that we put on a Tee. the focus is on economic development though. as a business we are not required to embrace a narrative or propose/endorse a particular diplomatic settlement, nor does it help the mission of building common ground to do so. our focus is on a prosperous and peaceful future.

Made In Palestine

 Posted by Howard Weinstein at 2008-07-18 08:30

Great blogg. First of all I think Made in Palestine would resonate throughout the Mid- East, (including liberal minded Israelies.) Secondly, I am working on a program in Jordan where we will hire deaf Jordanian, Palestinian and Israeli young adults, manufacturing solar powered low cost hearing aids. There is a great school for deaf program in Gaza where we will hopefully hire some of our future employees, as well as use this facility to distribute our products in Palestine. On our products we will certainly mention made by the combined efforts of the deaf community of Palestine, Jordan and Israel.

I would love to see your program

re: Made In Palestine

 Posted by adam neiman at 2008-07-23 09:25
Thanks Howard. & I love this project of yours in Jordan! let me know if we can help.


New Entrepeneur to Palestinian Trade

 Posted by Judy House at 2008-07-22 23:03

Hi all! Wow!!! The timing of seeing this blog could not have been better for me! I'm a new business owner that is marketing "authentic items from the Holy Land". Last year, I journeyed to Bethlehem and other parts of the West Bank. I saw the poor economic situation, and the hardships that the Palestinian people had to endure because of their situation. It touched my heart, and I knew I had to try to make a difference - however small that might be. Since returning, I educated myself A LOT about the current situation. There were so many things that I did not know about the daily struggles, restrictions and economic hardships! I felt that there were ways that I could help them become more economically independent. I researched the best ways that I could go about doing that, given the restricted resources that are available in the West Bank occupied territories. During a second trip last year, I purchased items from a few local artisans - at "wholesale" (or "for peanuts" as they call it). I shipped the items back here to start my "inventory". In Feb., I established a division in my business called Holy Land Treasures (and received my retail merchants certificate), to allow me to sell the items to the public. Currently, we are purchasing items from Bethlehem olive wood carvers and working with a women's center (located in a refugee camp) in Hebron. The women's center operates as a business, and has been teaching women how to make needle craft items, which are then sold at the local market and to tourists that visit their camp (which just doesn't occur very often). The women are provided the materials from the women's center, and they work from their homes. When a woman returns a finished product, she is paid for her work by the center. I will be selling the products through various markets here in America, and will be giving back a significant percentage of the profits -either from the company sales or from my own salary. I am a very big supporter of fair trade, and hope to work with the artisans and direct local producers whenever possible. I'm planning on marketing the products by promoting the Palestinian education piece, as well. Since I am just starting out, this venture is very "grassroots" and small-scale, but I hope to grow the business over time, adding new products each time I visit. I'm hoping this new business will assist the people located in the impoverished areas of the Holy Land, while educating the public here in America about the daily hardships of the Palestinian people. Would love to hear from some of you that have established businesses in the West Bank area and/or are seasoned promoters of Palestinian trade markets. I am especially interested in hearing about particular challenges that you ran across with the Israeli government as an international business owner that supports the Palestinian trade market. Has anyone had problems or experienced travel complications when arriving in Israel as an international business owner that markets products from the West Bank area? What has been the general consensus of the Israelis since the Palestinian Investment Conference, and will they try to hinder the international initiatives in any way? Adam - I return to Bethlehem in September. Wwould love to visit the No Sweat Apparel shop when I return. Is there a contact person that I can email so I can set up a meeting? Oh my!! I wrote a book here tonight!! So glad to have stumbled upon this blog.......the feedback and comments have been very helpful to this "newby"!

New Entrepeneur to Palestinian Trade

 Posted by adam neiman at 2008-07-23 09:32
Judy that sounds fabulous. my email is adam@NoSweatShop.com . let's talk ASAP. as for issues w/ the Israelis I haven't had any yet but introducing yourself to your local Israeli consul general isn't a bad idea. they are generally supportive of these ventures, especially if they are pro- Palestinian w/out being anti-Israeli.

our factory has had occasional problems getting chemicals in for dyes, etc. generally a call to USAID will straighten that out.

To Adam Neiman regarding your response on 7/23/08

 Posted by Judy House at 2008-07-29 08:47
Hi Adam, and thanks for your quick response.
I emailed you last week, but not sure if you received it? If not, please email me at HolyLandTreasures@yahoo.com.
Please let me know if I need to send the email through again.
I'm very grateful to speak to you and possibly set up a meeting while I'm in Bethlehem.
Hope to hear from you soon!
Judy House
Holy Land Treasures

A critique of West Bank development approaches and projects

 Posted by dawood hammoudeh at 2008-09-08 03:00

Hi Adam, The current approach to development, which is entirely removed from the needs of Palestinian communities, aims to normalise relations with the Occupation, treating it as development partner in projects across the West Bank. Not only do these projects often run contrary to international law, but also they serve to further entrench the Occupation while at the same time placing Palestinian economic growth in a subjugated role. As such, these programs both fail to provide sustainable growth and undercut the Palestinian struggle.

please see this link and report: http://stopthewall.org/activistresources/1728.shtml

Dawood

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