New Gaza industrial zone heralds economic promise

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AL-MUNTAR, Gaza Strip — The slick brochure for the Gaza Industrial Estate calls it a "Gateway to Regional and International Markets." But leaders on both sides of the border between Israel and the Gaza Strip hope the Palestinian project will also open a doorway to peace.

Just over 15 miles from the new Gaza International Airport and a few minutes drive from the Israeli border, an octagonal water tower rises over the 123.5-acre site, which is known to Israelis as the Karni Industrial Zone.

Coca-Cola is reportedly one of four companies to have contracted space in the industrial park — five more are expected to sign — which may eventually accommodate Palestinian, Israeli and other joint ventures.

The park was inaugurated in mid-December.

Bashir Rayes, the marketing manager for the private enterprise in charge of the industrial zone, said his company, the Palestine Industrial Estate Development and Management Company, hopes to attract labor-intensive industries. Textiles and food processing companies are likely possibilities.

The industrial zone is intended to create 20,000 jobs, mostly for women, and perhaps more than twice that many jobs indirectly. The unemployment rate in the Gaza Strip is nearly 30 percent, according to the United Nations.

President Clinton has asserted that Palestinian terrorism occurs in part because, in the depressed economic circumstances of the Palestinian Authority, young Palestinians have "nothing better to do."

Those involved in the zone believe that the new employment opportunities and commercial activity will contribute to a substantial future for Palestinians and therefore to a lasting peace on the ground.

"Where there is money passing, there is no shooting," said Shai Chermesh, head of the southern Israeli regional council for Sha'ar Hanegev, to a group of 30 North American Jewish leaders who toured the industrial zone as part of a daylong field trip.

The British-educated Rayes echoed these sentiments.

"When it comes to business, we like each other a lot," he told the visitors.

Companies would reap the benefits of low rents and an inexpensive skilled labor force that has experience working in Israeli industries, he said.

Products going in and out of the industrial zone will have direct access to Arab markets, as all goods will be stamped "Made in Palestine."

Israeli industrialist Dov Lautman called the zone a "win-win" situation. He saw no problem with the "Palestine" label. "Let them have pride if that's what helps," he said.

The Gaza Industrial Estate was developed as a prototype for a series of industrial zones that could provide investment incentives and employment opportunities in the Palestinian autonomous areas. In addition, it will promote Israeli-Palestinian economic cooperation.

But the zone's viability for investors hinges on the area's exemption from periodic border closures, which Israel has implemented after terrorist attacks.

To satisfy its security concerns, Israel has granted the industrial zone a special, "somewhat sterilized" status, treating it as a separate entity from Gaza, according to Rayes.

There is a border crossing point at Karni. Goods produced at the industrial estate would enjoy duty-free access to foreign markets, with expedited security clearance — part of what Rayes calls a "one-stop shop."

The $90 million project is financed by grants and loans from Israel, the World Bank, the European Investment Bank, the U.S. Agency for International Development and other development agencies. It also has funding from PIEDCO's parent company, the Palestine Development and Investment Company, the largest private company in the Palestinian Authority.