Palestine Pulse

The PA moves forward in its disengagement from Israel

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Article Summary
The Palestinian government decided to appoint commercial attaches in the Palestinian embassies in a bid to promote national products abroad, which is seen as a step forward on the path of economic disengagement from Israel.

GAZA CITY, Gaza Strip — The Palestinian Authority (PA) continues to make efforts toward an economic disengagement from Israel.

Palestinian Prime Minister Mohammad Shtayyeh announced May 18 that his government would appoint commercial attaches to join Palestinian embassies in various countries in a bid to develop Palestinian economic ties with countries around the world and promote national products in international markets. 

Since the establishment of the PA in 1994, the promotion of Palestinian goods around the world has been limited to small individual initiatives to export Palestinian olive oil, cement, shoes and tobacco.

In 2017, the Palestinian ambassador to the Netherlands shared that other Palestinian ambassadors in the European Union had begun taking steps to promote Palestinian products abroad. He added that the ambassadors met with the Palestinian national economy minister to discuss which local products are most marketable abroad.

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Efforts to appoint commercial attaches in Palestinian embassies began in 2005 but did not make much progress until recently.

As the PA works to achieve gradual economic disengagement from Israel, it has taken more concrete steps in this direction. In August 2017, Palestinian Foreign Minister Riyad Malki appointed several commercial attaches who joined embassies in the United States, Germany, the Netherlands, Russia, the UK, Kuwait and Saudi Arabia.

Palestinian government spokesman Ibrahim Melhem explained to Al-Monitor that today only a few Palestinian embassies have commercial attaches and the appointment of new staff will be done in cooperation between the ministries of Economy and Foreign Affairs.

Ola Hamouda, the Commercial Staff Unit coordinator at the Palestinian Investment Promotion Agency, told Al-Monitor that only four Palestinian embassies have commercial attaches: those in Germany, the UK, Kuwait and Russia. The organization “seeks in cooperation with government agencies to increase the number of attaches in Palestinian embassies during the coming period,” Hamouda said.

The Palestinian government announced May 20 its 100-day plan to boost the local economy and industrial areas through development projects, in a bid to find solutions to the financial crisis gripping the PA since the United States suspended financial assistance earlier this year.

The PA's financial hardships were compounded by its Feb. 17 decision to return the tax money Israel collected on its behalf after Israel froze 500 million shekels ($138 million) from the total owed, equivalent to the amount the PA paid last year to the families of Palestinian prisoners in Israeli prisons and of those killed in resistance activities.

The Palestinian government seeks to diversify and increase its financial revenues by exporting Palestinian products to markets around the world after having established economic ties with countries whose markets can accommodate Palestinian goods, such as Saudi Arabia, the Netherlands, Jordan and Egypt.

Palestinian goods' lack of a barcode is seen as one of the biggest marketing challenges abroad.

Azmi Abdul Rahman, the spokesman for the Palestinian National Economy Ministry, told Al-Monitor the ministry has submitted several requests over the years to the GS1 — a nonprofit organization that develops and maintains global standards for business communication headquartered in Brussels — to obtain an international barcode for Palestinian products. But in 2015, the GS1 rejected the Palestinian request to obtain a barcode, as it refuses to recognize Palestine as a state.

Abdul Rahman said having commercial attaches in Palestinian embassies has long been an objective for Palestinians. “This decision, however, ought to be preceded by strong steps to boost the Palestinian economy and local products so that it can compete with international products. This is not to mention the need to increase the production in Palestinian companies and factories,” he said.

He explained that Israel’s control of the commercial crossings has significantly affected the PA’s ability to conduct trade, noting that the majority of Palestinian exports enter the Israeli market.

According to the latest statistics published by the Palestinian Central Bureau of Statistics in November 2018, the Palestinian exports in 2017 reached around $1.65 billion, i.e., a 14.9% increase from 2016. Israel is considered the top destination for Palestinian exports estimated at around $878 million.

Former Palestinian Prime Minister Rami al-Hamdallah said in November 2018 that Palestinian products had reached 70 countries around the world by the end of 2018, amid expectations that the national industries would contribute to increasing the gross domestic product (GDP) by 14.1% to 24% over the next 10 years.

Nasr Abdel Karim, a professor of economics at Birzeit University, told Al-Monitor that the Palestinian government’s step to appoint more commercial attaches is an ambitious one, noting that appointing attaches should happen in tandem with other activities and measures to boost local industries. He called upon the Palestinian government to try to focus first on producing local goods with competitive prices to replace the imported alternatives, noting that the Palestinian imports for 2017 amounted to $5 billion as opposed to $1 billion in exports.

Mohammad Abu Jiab, editor-in-chief of Al-Eqtesadia newspaper in Gaza, explained to Al-Monitor that the financial crisis gripping the PA has prompted it to find solutions to increase the GDP as much as possible.

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Found in: Economy and trade

Ahmad Abu Amer is a Palestinian writer and journalist who has worked for a number of local and international media outlets. He is co-author of a book on the Gaza blockade for the Turkish Anadolu Agency. He holds a master’s degree from the Islamic University of Gaza.

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