Published on Arab Voices

The Palestinian private sector: resilience in the face of harsh conditions

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This post was originally featured on MIGA's Political Risk & Emerging Markets Blog on November 27, 2012.

Izumi KobayashiI recall the first time I visited Nakheel Palestine for Agricultural Investments Company fields at Jericho two years ago, when MIGA was still at the early stages of underwriting the project constituting planting date trees. The land was empty and, at the first glance, the first thought that came to mind was “how can this be developed into arable land?” When MIGA’s Executive Vice President Izumi Kobayashi visited the site for the first time a couple of weeks ago, we found ourselves in fields filled with baby date trees that have beautified the land with their green leaves. And in a tour in the packing facility of the project, we saw how young female workers were sorting and packing the dates, realizing that each of these workers is supporting a household of minimum five members in a very impoverished area.

In the latest West Bank and Gaza mission led by Kobayashi and Nabil Fawaz (a sector leader in MIGA), two major findings were revealed. The first is the resilience the Palestinian private sector shows as businesspeople insist on keeping operational in the face of the harsh conditions they face every day—whether we are talking about the movement restrictions, business interruption, the unpredictability of what tomorrow could bring, and the increased costs associated with such factors. For example, the plastic cup manufacturer that MIGA recently insured has to make sure that plastic granule supplies that they import from Saudi Arabia are not interrupted on the borders or internal checkpoints. Also, in the case of a dairy manufacturer whose expansion we recently insured, extra caution must be taken when transporting the dairy products to different West Bank localities or when exporting them to Jordan due to the back-to-back measures that need to be applied when moving goods. These measures cause damage to goods and increase transportation costs.

Layali AbdeenThe second finding relates to the social responsibility of the Palestinian private sector, when entrepreneurs choose to employ people although they could depend fully on machines to operate their production lines. This is evident in the Nakheel dates project, Jebrini’s dairy manufacturing project, and Al Haram plastic cups manufacturing facility.

The developmental impact of MIGA-supported projects in the West Bank and Gaza is huge in terms of the labor generated, the products manufactured that service both the local and export markets, and the revenues generated by these private-sector players. Building on the latest study Towards Economic Sustainability of Future Palestinian State: Promoting Private Sector Led Growth and according to its author John Nasir, it was noted that only “a sustainable private sector will be able to provide jobs needed by the rapidly expanding population and only a sustainable private sector will generate the revenues required to provide basic services."

As I am writing this blog the West Bank and Gaza experienced another wave of violence that erupted in the Gaza Strip and has had a ripple effect on the whole West Bank. This comes as reminder as to how fragile conflict-affected countries are, how quickly the situation can deteriorate, and how this unpredictability will always be the ultimate factor hindering private sector development—and thus hindering the development of a whole nation. MIGA’s role will always be vital in such countries and in such situations, where private-sector players know that they are not alone out there.

And allow me to end this blog by praying for the souls of children who lost their lives in the past week, hope they rest in peace, and hope war will never knock on our ever-tired doors again.


Layali H. Abdeen

Senior Investment Guarantee Officer

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