Cablegate: Palestinian Business Group Vents Frustration

This record is a partial extract of the original cable. The full text of the original cable is not available.





E.O. 12958: N/A

1. (U) Summary. Under Secretary of Treasury John Taylor
and Under Secretary of Commerce Grant Aldonas met with a
group of Palestinian business leaders on the margins of the
World Economic Forum on June 21, 2003 (attendees list at
end of cable). The business leaders discussed their
skepticism about the current roadmap, severe restrictions
on their ability to conduct normal business due to
purported security concerns, their desire to be involved in
Iraq reconstruction efforts, and the need for long-term
technical assistance. End Summary.

2. (U) Where is the Economic Roadmap?
The business delegation said they lacked confidence in the
roadmap because, they said, it omitted economic concerns
and the prospects of political benefits seemed distant.
They nevertheless expressed support for the new Palestinian
government, but said they needed tangible measures to
ensure greater economic freedom before they could have
faith in the process. The business leaders expressed
frustration with the perceived increase in the number of
checkpoints since the announcement of the roadmap. They
produced a map illustrating the numerous checkpoints in the
West Bank and Gaza, and explained how these checkpoints
severely restrict their movements and their ability to
conduct business, crippling the Palestinian economy.

3. (U) Security to Protect Markets
The business leaders detailed examples of how they believe
the Israeli government uses security as a protectionist
commercial measure to restrict free markets. One example
involved the controlled entry of businessmen and blocking
transit of goods into the Gaza Industrial Zone. They
requested assistance to designate the Gaza Industrial Zone
as a special area insulated from security restrictions.
The group also highlighted the withholding of
communications equipment from Palestinian Cellular
Communications Co. for approximately 20 months by Israeli
customs agents. The businessmen had doubts as to the
legitimacy of the security arguments and instead believed
the equipment was seized to give the Israeli telecom
companies a commercial advantage.

4. (U) Piece of the Iraq Reconstruction Pie
The group worried that they were being sidelined from
current reconstruction efforts in Iraq and showed a strong
desire to be involved. They also noted that that their
participation would be limited because of the restriction
of their movements within the region. They also felt that
their export promotion efforts were underdeveloped and
hampered by the closures.

5. (U) Technical Assistance Needed
Mr. Tareq Abbas, son of Prime Minister Abbas, noted that
they needed long-term technical assistance for building the
Palestinian state. Although they did not specify the areas
in which they would benefit from technical assistance, they
stated that they needed long-term support and assistance
with implementation in a variety of areas. He noted that
USAID studies without follow up technical support were not
as helpful.

6. (U) Attendees
Undersecretaries Aldonas and Taylor met with: Mr. Sabih
Masri, Chairman of Palestine Telecommunications Company;
Mr. Zahi Khoury, Chairman National Beverage Company; Mr.
Samer Khoury, CEO Consolidated Contractors Co.; Mr. Nassar
Nassar, Chairman Palestinian Trade Center; Mr. Abdul Malek
Jaber, Managing Director Palestine Industrial Estates
Development and Investment Co.; Mr. Mosab Khorma, CEO
Palestinian Telecommunications Co.; Mr. Hakam Kanafani, CEO
Palestinian Cellular Communications; Mr. Tareq Abbas,
Managing Director Sky Advertising; and Mr. Kamel Husseini,
Managing Director Ellam Tam PR.

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