APN Board Vice-Chair Jo-Ann Mort in Dissent: Beyond SodaStream: Israeli-Palestinian Cooperation in the Private Sector

SodaStream, an Israeli company with a production facility in a West Bank settlement, made headlines recently due to the superstar status of its spokeswoman, Scarlett Johansson. But the real stars of the Israeli business community are those who joined with their Palestinian counterparts in an effort to use their economic heft to urge political leaders to achieve a two-state solution as soon as possible.

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Breaking the Impasse (BTI), a group composed of around 300 Israeli and Palestinian business leaders (and growing), has been quietly working behind the scenes since 2012.  While created through the leadership of the World Economic Forum, the group is maintained by leaders from the Israeli and the Palestinian sides, along with minimal staffing from each.

“The group calls on political leaders to attach the highest priority towards achieving a two-state solution and an end of the conflict between the two peoples,” according to its mission statement. The statement goes on to say that

the BTI is deeply concerned that the lack of progress on the political front will reinforce the undesired status quo. Only a viable political solution can allow for the realization of the economic potential and thus significantly advance the well-being of both Palestinians and Israelis and help establish security and stability on both sides.

These international businesspeople already know each other as colleagues, and they understand the tremendous potential impact for the region if they work together—and the potential consequences if they don’t.

Contrary to the Boycott, Divestment and Sanctions (BDS) movement, these business leaders advocate working together toward a two-state solution. Indeed, BTI has cited the “threat of sanctions” to explain the urgency of its cause. As worried as the Israelis are about the prospects of a global boycott, however, both Israelis and Palestinians fear a significant brain drain if conditions do not to improve with a horizon toward statehood.

“We are focused on encouraging and supporting adoption of a peaceful resolution of our conflict based on a two-state solution,” said Yadin Kaufman, a former American who lives in Israel, where he heads up the first fund focused on investing in Palestinian technology companies. “The Israeli business community has a special role to play in explaining to the Israeli public the many economic ‘peace dividends’ that can flow from an agreement.”

Other leaders in the group include Israeli tech pioneers and investors Yossi Vardi (who takes the lead on the Israeli side), Benny Landa, and Moshe Lichtman. It’s no accident that the Israeli business leaders hail largely from high-tech; the sector is Israel’s leading financial engine. Also in the group are CEOs of major food companies, like Osem and Strauss, which are Israeli staples but are also part of global enterprises. Such major corporations simply could not sustain themselves, and the larger Israeli economy, without access to the global market.

On the Palestinian side, the group’s leader is Munib Masri, a tycoon and philanthropist who is chairman of PADICO, the large Palestinian holding company. He’s joined by his PADICO board colleague and head of Coca Cola Bottling for the region Zaki Khoury, building contractor Riad Kamel, and PADICO’s CEO Samir Hulileh, among others. Together, the Palestinian businesspeople in BTI represent a quarter of the Palestinian private sector economy as well as the largest potential private sector investors in an independent Palestinian state economy. Several of them have built their fortunes outside of the Ramallah corridor—in the Gulf, Europe, South America, and elsewhere—but they want to contribute to a sustainable, outward-looking private sector in a future Palestinian state.

And this economy will be connected to the Israeli tech; the Palestinian IT sector is expanding and engaging in joint work with Israeli tech companies as well as global companies’ Israeli offices. About 2,000 engineers graduate each year from Palestinian universities, which have increasing ties to Cisco, Intel, and other companies, including Israeli-owned Mellanox. The new Palestinian city of Rawabi, situated on a hill between Ramallah and Nablus near Bir Zeit University, will be ready for its first inhabitants this year. Destined to become a city of nearly 40,000, Rawabi is also completely wired and will include a new tech hub as part of its business plan.

Breaking the Impasse will not make gritty political decisions; its strategy is to create more of a chorus for the two-state option, especially at a time when skepticism of this view is increasing. But the growth of private sector cooperation between Israeli and Palestinian companies is a critical development. The economic model that emerged from the Oslo Accords was deeply flawed. Industrial zones, set up with the best of intentions by peace negotiators on the Israeli side, were fitted for an Israeli economy that would use cheap Palestinian labor in a manner similar to the border zone relationship between the United States and Mexico. There was almost no tech economy back then; it was more focused on light industry. The Palestinian economy was more dependent on Israeli largesse and foreign aid, which kept a bloated public sector afloat. But it did nothing to bolster an independent Palestinian private sector, which has grown lately in spite of the occupation with significant financial support from investors in the Gulf, the EU, the United States, and elsewhere.

As such, the coming together of Israelis and Palestinians as business equals makes an important statement. It signifies that both of these communities want to operate in a global space where values of enlightenment and modernity take precedence over nationalism, xenophobia, and fundamentalism.

In the end, manifestos by business leaders are not the same as demands for change from politicians—or grassroots activists. Political leaders  must establish a clear political horizon, along the lines of the anticipated plan to be put forward by U.S. Secretary of State John Kerry. The alternatives, for both peoples, are unworkable.

This article appeared first on February 14, 2014 at Dissent

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