WILL PALESTINE BE THE NEXT EMERGING MARKET?

Bethlehem, West Bank-In May, 300 business leaders from Israel and Palestine came together in Jordan to discuss business cooperation between the two countries, but most of the possible work requires lifted restrictions. Israel has a well-developed economy with cutting edge technology advancements and a strong workforce. The Palestinian economy is also market-based, but not nearly as advanced. However, the economy is growing at more than 5%; and Palestinians are well-educated, highly literate, often bilingual, and have aptitude with technology. This in addition with a very young workforce creates a dynamic environment for business. However, Palestine has a culture than deempasizes entrepreneurship, perceiving taking out loans as being too risky. This makes private equity especially important so that it would encourage business to reinvest their earnings and reach a larger market. Currently foreign aid is one of the strongest drivers of the economy. It is still needed, but because of the restrictions, aid does not have a long term effect.

Recently John Kerry, the US secretary of state, has made lofty promises to help the Palestinian economy. He said the US will help raise 4 billion in aid over three years to support the Palestinian economy. He projects that this will decrease poverty by two-thirds, increase wages by 40%, and triple tourism. However, the Economist reports that it is unclear who will pay for this.

Agriculture output is almost directly related to the restrictions put upon Palestinians, because Israel regulates water and restricts what land can be used. The World Bank predicts a $1 billion addition to GDP if Israel lifts restrictions of water and land in the West Bank and allows Palestinians to cultivate 1.5 percent of the land in the West Bank that is under Israeli civil and military control (Area C).

Tourism in the West Bank could be a lot higher as there are many sites from Abrahamic religions (Islam, Judaism, and Christianity), but it suffers from the negative stigma that the western media often portrays. Also, Israel controls the borders of the West Bank, so guards will question and hassle people entering who plan on traveling to the West Bank. On the roads entering Area A, signs are posted stating that: “This road leads to Area “A”, under the Palestinian Authority. The entrance for Israeli citizens is forbidden, dangerous to your lives, and is against Israeli Law.” Also the US State Department urges US citizens not to travel to the West Bank unless it is necessary. Although it is beneficial for governments’ travel advice to be conservative, these warnings are unwarranted as there is no more danger than any other place as long as you do not put yourselves in harm’s way.

The Bethlehem area, which includes Beit Jala and Beit Sahour, may have the best value for tourism in the world. Many people come in on a bus, visit the church, and leave a few hours later. This is unfortunate for the Bethlehem economy, but good for travelers who to see the native area without many of the additions that come with high tourism. This area contains historical sites including the Shepherd’s Fields, Virgin Mary’s Well, Soloman’s Pools, and the Church of the Nativity. The locals are genuinely welcoming and have a vibrant culture full of compassionate people. The hotels are much less expensive than Jerusalem, which is only 10 kilometers (6.2 miles) away. Also, a person can purchase a filling falafel sandwich and a bag of chips for 6 shekels ($1.65 US Dollars) or spend an evening with friends around a hookah for 10 shekels ($2.75 US Dollars). Theses prices are bargains and the religious sites do not require admission. Travelers do not need to worry about breaking cultural norms because the area is the least conservative in the West Bank because of tourism and higher proportion of Christians than the rest of the West Bank that is primarily Muslim.

On average, Palestinian GDP per capita is around $2,000. If people had a more accurate sense of West Bank security, tourism would increase. If the West Bank could have greater control over water, more land, or movement of goods or people, this number would increase. Although land is a zero-sum game between Israel and Palestine, water is not always zero-sum because of desalinization, and less restrictions of movement would not hamper Israel’s economy.

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