May 27, 2009, Updated September 12, 2012

Can closer economic ties bring peace? Members of the new Israel-Palestinian Chamber of Commerce certainly hope so.


Most Israelis raise an eyebrow when they learn how much Israel already trades with the Palestinian Authority: Of some NIS 15 billion (about $4 billion) worth of sales in 2008, about NIS 13 billion was to the West Bank and an estimated NIS 2 billion went to the Gaza Strip. Sales in the opposite direction account for less than 20 percent of the bilateral trade.

“Israeli companies sell millions of dollars of merchandise to the Palestinians,” says Ofir Gendelman, CEO of the new Israeli-Palestinian Chamber of Commerce (IPCC).

“Most of the products sold in Palestinian markets are Israeli. West Bank supermarkets stock mainly goods made by Israeli companies such as Osem, Strauss and Elite. Some Israeli companies rely on the Palestinian market. For the Palestinians, most trade at the end of the day is with Israel. The two economies are already interdependent,” he tells ISRAEL21c.

“Our job is to facilitate trade between Israel and the Palestinian Authority — to help Israeli businesspeople find Palestinian partners,” he adds.

The idea of setting up an Israeli-Palestinian chamber of commerce was first discussed eight years ago, but as Gendelman, a fluent Arabic and English speaker, admits: “There was always a political reason not to do so.”

The chamber was finally established on paper in October last year, registered as a private non-profit organization with the backing of 30 prominent Israeli businesspeople. 

A five-month incubation process

An incubation process followed, led by the Peres Center for Peace and later developed through cooperation with the Federation of Israeli Bi-National Chambers of Commerce and support from the Portland Trust. Founders include former MK Dalia Rabin, daughter of Yitzhak Rabin who left a legacy of peace, and former IDF chief of staff Amnon Lipkin-Shahak.

In February, the Peres Center organized an extremely successful business conference on the road to the IPCC’s establishment: the first in a planned series of meetings between Israeli and Palestinian professionals. 

About 60 businesspeople from both sides attended the event, from the importing, exporting and shipping sectors. Participants including representatives from Ashdod Port Company, Israeli Customs and the Civil Administration allowed for information sharing on common issues of concern. 

The new chamber became operational in March, and last week held its inaugural gala dinner at a Tel Aviv hotel, attended by dignitaries including President Shimon Peres, the Quartet’s envoy to the Middle East, former British Prime Minister Tony Blair and his wife Cherie, foreign ambassadors and Palestinian and Israeli business leaders.

The chamber’s job is to function as a focal point for Israelis interested in penetrating the Palestinian market – that means focusing on the nitty gritty of doing business, while maintaining close government contact on the economic, legal and commercial facets in order to ease barriers to trade.

“We have already organized several business-to-business meetings on both bilateral and tri-national tracks. Sometimes it’s easier for all sides concerned to work through a third party,” Gendelman, who previously served with Israel’s Ministry of Foreign Affairs for 11 years as a career foreign service officer, explains.

It’s a question of trust

He points out that the chamber of commerce is already working with the Canadian and Japanese embassies in Tel Aviv, and will hold a trilateral business-to-business event in cooperation with the Canadian embassy in June, and a similar event with the Japanese embassy in July.

Trust is a crucial issue. “Sometimes it’s better to work with a chaperone,” he explains. “It makes them feel more relaxed. If there is real chemistry, companies can work together. We’re exploring this model, but eventually we want to work on the bilateral track alone. You cannot detach commerce from politics,” he notes, bluntly.

At the inaugural event, keynote speaker, Tony Blair, spoke of a three-tier vision of economics, politics and security for both Israelis and Palestinians, adding that the economic dimension is critical for peace. 

“Economic growth and enterprise could play their part in the realization of [peace] aspirations,” he told delegates. “Business can transcend the divide.”

At the event, Vice Prime Minister and Minister for Regional Development Silvan Shalom addressed the importance of reaching peace with the Palestinians, noting that economics and politics should work hand-in-hand and moderate Arabs must be supported. “Today,” he said, “We are making history.”

Gendelman envisages the IPCC operating along similar lines to that of the 45 other bi-national chambers of commerce operating in Israel, so as to enhance two-way trade and investment between Israelis and Palestinians. 

Enthusiasm from the Israeli business community

Promoting business opportunities and trade, he explains, creates strong business networks and mutual economic trust between the two peoples.

“The idea is to utilize support for the chamber to bring other companies on board,” he explains.  “We’re getting lots of enthusiasm from the Israeli business community. Many Israeli companies want to export their products to the territories, but don’t know how. We can be the matchmaker.”

“We’re apolitical,” Gendelman, who hopes that one day soon a Palestinian-Israel chamber of commerce will also be created, emphasizes. “Some think we’re part and parcel of [Prime Minister Benjamin] Netanyahu’s economic peace plan, but we’re not. A strong Palestinian economy is good for everyone.”

Palestinian exports to Israel are currently limited to mainly food products, but the potential exists to widen and strengthen such trade ties, says Gendelman. 

“We are exploring the possibility of outsourcing IT projects to Palestinian companies in the West Bank. They have several hundred fully trained software engineers.

Three or four software companies in Ramallah already work with Israeli high-tech companies. Other sectors include construction, agriculture, bio-med – the sky’s the limit. All you need is good will,” he says.

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Jason Harris

Jason Harris

Executive Director

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