Monday, March 23, 2015

Day 3: Palestine. How The Other Side Lives

Day 3 of our trip coincided with a very important event in Israel – national elections. As a result we took the opportunity to visit the West Bank, but first we had some business to take care of in Tel Aviv.

We kicked off with a visit to The Save a Child’s Heart centre, a Tel Aviv based non-profit medical facility that carries out heart surgery for children from all over the world, including Kenya, Ethiopia, Zanzibar and even Iran, Palestine and Syria at a fraction of the cost of similar procedures in private hospitals.

It was quite difficult watching infants only a few weeks old connected to tubes and machines undergoing major heart surgery. Entrepreneurs shed lots of tears when the doctors were briefed us on each child’s case and circumstances. We were able to visit the children who had either undergone surgery or were waiting surgery and it was amazing to speak to the African children and how they came to be part of this initiative. A young girl from Kenya, named Mary, made a particular impression on me.

The centre is funded and supported by Morris Kahn, the ex-South African dollar billionaire who also supported the young entrepreneurs on our trip – proof once again that capitalism can do good – its really is up to the capitalists.

After dancing to loud Rihanna music with the children at the centre, we started our long journey to the West Bank. The day was to become an emotionally heavy one.

We drove past 3 security check points on our way to Rawabi, the first planned Palestinian City and brain child of multi-millionaire entrepreneur, Bashar Masri. What a sight!

We had a guided tour from Shadia Jaradat, one of the chief engineers of the project in her high heels, no gaal. The development is funded by the Qatari government and promises to be a modern way of living for middle-class Palestinian families – Think of Melrose Arch on steroids!

Our group chat with Bashar was my highlight of the day. He opened by unapologetically telling us that the city is primarily a commercial project and its key objective is to make money. There is only one partner, the Qatari government, who have extended a $1,6 billion funding line for the project and expect a fair return from their investment.

Given that, according to Bashar, the projected IRR is estimated at 2,9%, in a market where dollar cash deposits earn a return of 3% interest per annum, it was clear to see that whilst all business is for commercial return, this development represented much more to him and his colleagues and partners than just commerce.

The project itself carries with it huge political risk, because it is built on land that is under occupation by Israel. Until this political impasse is resolved, his remains clear and present risk. I sensed a subtle hope in Bashar’s voice, that today’s Israeli elections would yield an outcome that takes one step towards such a resolution – That hoped was to be dashed by comments from the re-elected Prime Minister of Israel the very next day.

Bashar highlighted the international coverage that Rawabi had received and why it was important. The man speaks passionately about using the development as a catalyst for economic growth of the West Bank which is home to 3,7 million people, of which a third are under 40 years-old and 74% depend on the state for their livelihood. I guess these are the real consequences of donor-funded economies that are essentially restricted in free trade with the rest of the world.

I asked him about his media interests and why the international community hasn’t covered it in detail, the perspective of the Palestinians in the conflict. He felt that there were many factors at play in the coverage but he chose to focus on the positive coverage that has happened from Germany, the USA, England, and even South Africa. He believes that the more the international community is exposed to the injustices of Israeli occupation, the more likely a sensible solution will be found.
I quickly got the sense that in this region every conversation eventually turns political – How can it not?

Bashar spoke passionately about his love for Palestine, even though he studied and lived in North Africa and the US. Virtually all of his business interests are in Palestine and he constantly turns down lucrative business opportunities, preferring to put his money where his mouth is. Notwithstanding that he continues to hold small interests in Morocco, Egypt and Jordan. He admitted that this approach cost him dearly, between 2000 – 2004, when the political situation was dire and all of his businesses lost money, with most having zero revenues.

I asked him what could the international community do to help make the development of Rawabi a success and by extension Palestine. He spoke of media coverage and also bringing services into the city, such as call centres and other Business Process Outsourcing (BPO) services to create jobs for Rawabi residence and complete the offering of it being a place where people can ‘Live. Work. Grow’.
We left Rawabi in awe. In awe of the charming entrepreneur that is Bashar, notwithstanding the political challenges he and other Palestinian entrepreneurs have to contend with, and in awe of the $1,6 billion development with a 500-seater amphitheatre.

Lunch was at a restaurant in Ramallah, owned by Palestinian entrepreneur, Katya and her brother. What I thought would be relaxed chat over lunch about entrepreneurship in Palestine turned out to be a political debate about the structural challenges experienced by young people.

Katya spoke of how access to finance has become a dependency on the banking industry for young entrepreneurs. According to her, loans are handed out to young people who often can’t afford to pay them back creating a dependency.

However, her biggest challenge by far is the non-existent market. Because of the occupation, and the security situation that created security check points all over the West Bank. She speaks of how a few minutes trip between Ramallah and Jerusalem has become a 2 hour trip because of these checks.
She feels that sabotage is very rife against Palestinian business. To prove this point she related a story of a top Moroccan DJ whom her restaurant had invited to play at her restaurant. She paid the deposit, booked the flights, the DJ applied and received a visa to enter Israel en route to Palestine, but on the day of travel he was refused clearance at the airport, after landing. This led to her having to refund all her customers and making a loss on the event. She is convinced that this was done on purpose to sabotage her business.

Supply of certain basics is also a problem. For her as a restaurateur, she can’t even get furniture because in the whole of the West Bank nobody manufactures high end furniture so she is forced to order this from Israel. This also applies to her alcohol orders – they all have to go through Israel, which means double taxation as there are not double-tax treaties, simply because Palestine is not a recognized state. Add to this the risk of certain foods being spoilt by the time they are delivered at Katya’s restaurant.

Surprisingly, Katya sees a silver lining in all this.

She believes that doing business in the current political climate, has built her character and her resilience. She talks about fighting to build her business and her country. She also makes an interesting point about how this has forced young people to mature much quicker as they inherit lots of responsibility at a young age. She is 29.

The entrepreneurs were very quite in the bus trip back to Tel Aviv. Given South Africa’s history, I suspect the day was emotionally hard on us, and it left most us with more questions than answers.
That night, the results of national elections started streaming in. We had dinner with Jonathan Beare that night and an opportunity to have great conversation on what we had seen and heard in Palestine over well prepared steak and a special 14 year-old Glen Fiddich whisky.

As we wrapped up the night, I realized that the political situation in this region is a complex one and unless you live here and contend with it day in and day out – you have no right opining. So, I wont.

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