Pieces of State Part I

Palestinian exports are a small market, but with our help they could be big in ending Palestinian poverty

By Liam Bailey

The Palestinian Authority (PA) economy has never been allowed to expand as it should. In Gaza restricted land access, strict internal and external security measures and high population density have put the fragile economy under pressure. In the West Bank the same type of security measures, restricting movements of people to and from jobs and businesses, and making the movement and export of goods extremely difficult have had the same effect on the economy. The West Bank’s population is slightly less dense which slightly eases the pressure on its economy.

The security measures have been tightened and employed even more frequently, largely in response to the elevated threat from Palestinian resistance groups since the Second Intifada began. Borders and checkpoints being closed severely disrupting trade and labor movements and Israeli military actions destroying businesses and administrative structures were both a factor in the recession of 2001-2002. The separation wall being constructed since late 2002 has further exacerbated the problems. Corruption in the PA and the selfish plundering of its budget has also been extremely detrimental to the growth of the economy.

The Israeli and Western reaction to the election of Hamas in the January 2006 PA elections, refusing aid and boycotting exports and services, increased the Palestinian deficit from $60-$70 million to $110 million per month. Israel also began withholding tax revenues, which accounted for a third of the PA budget and were used for paying the full salaries of its 140,000 employees, the main breadwinners for a third of Palestinian families. These actions have combined to cripple the Palestinian economy

Hamas was elected for its stance on corruption and they haven’t plundered the economy, nor have they put selfish greed before Palestinian welfare. The west’s embargo has made this irrelevant. The economy is in a worse state than ever.

There are people and companies trying to help. Zaytoun is a UK company paying fair-trade prices to import olive oil and other produce from growers in Palestine. The products are sold over the internet and through many small outlets, with hope of attracting bigger stores. I will be covering Zaytoun in my next article in this series.

Another is Joe Turner of Freedom Clothing, a UK not for profit co-operative set up in Jun 2005, importing Palestinian clothing for sale online. I spoke to Joe by telephone. He told me that at the moment he only imports t-shirts from one factory in Beit Jala employing 80 Palestinians. He has his own printer and prints t-shirts with designs to order, for charities and organizations etc.

Joe also told me that the banks wouldn’t give him a loan because they didn’t think it could be done and that the company is currently costing him money, which can’t be sustained forever. Joe added: “if we do have excess finances, we are committed to giving the money away – either to charities that work directly to improve Palestinian society, to the suppliers as bonuses or as reinvestment in more products.” Joe also answered a few questions by e-mail:

Are the products you sell labelled as Palestinian exports?

Our products are labelled ‘Made in West Bank and Gaza’, because the European trade agreement between Europe and the Palestinians is with the ‘West Bank and Gaza’. There was a considerable amount of discussion with the factory owner about what the label should say, and he was adamant that we could get into trouble if it said ‘Made in Palestine’ and tried to export via Israel.

Do you take part in the boycott against Israel?

Regarding a boycott, with respect to those people I know at the Palestinian solidarity groups, the policy is essentially unworkable. Everyone needs to appreciate the macro economics of the situation – the Palestinian economy is dependent on the Israeli economy, and to a lesser extent, the Israeli economy is dependent on the Palestinian economy. I do not have the exact figures to hand, but more than 90% of Palestinian exports go to or via Israel. Many international products marketed by Israeli companies originate in Palestine. Jerusalem Stone is a very good example. Most of the quarries are in Hebron or the Bethlehem area. And yet, most of the big companies that sell Jerusalem Stone tiles are from Israel. Much the same kind of thing happens with Dead Sea cosmetics.

The other day, I was talking to various groups about a strawberry we found in the UK that was marketed under a ‘Palestinian produce’ label by an Israeli company. This particular company is subject to an international boycott because it trades with Israeli settlements. On the other hand, the company buys from Palestinian farmers in Gaza who have no other market for their products. Refusing to buy Israeli, therefore, in a very direct way is likely to mean refusing to buy Palestinian and will lead to further economic depression in Palestine.

I think there is another way. We need to promote and spend every effort assisting and encouraging Palestinian exports. The structures and commitments are in place (even as policies from the Israeli government) for this to happen, but it does not in any major way. There are a few activists like ourselves, exporting small amounts of handicrafts, olive oil and clothing. There are a few people in the Diaspora who have businesses exporting relatives’ products, but there is much more that can and should be done. If we spent a whole lot less time moaning about the boycott and a whole lot more time creatively thinking of ways we can assist Palestinian exports, we stand to gain much more. I am calling for a reverse-boycott of Palestinian goods.

Does Israel make running your business easy or difficult?

We are not a conventional company. We have done the things that others think are stupid, impossible and irresponsible. Almost everything about our business is difficult. Every time I wish to go to visit the factories, I face hours of interrogation by immigration officials and our products are often held up by delays. Yet, the plain truth is that it is possible. If someone like me can do it, anyone can.

Do you think you’re turnover would increase if you were trading from an independent Palestinians state?

I think that life exports would be easier from an independent Palestinian state. Apart from anything else, if there was a functioning airport and seaport in Gaza, transportation would be a lot quicker and more reliable. Whether or not that would have an impact on our own turnover is impossible to say. It might well be the case that the need for a company such as mine would disappear.

Tell me about the problems you mentioned:

Regarding difficulties, the main problem with most Palestinian products, and Palestinian clothing in particular, is the price. This is related, but not entirely due, to the current difficulties. For example, the price of living in Palestine is relatively high, hence the cost of labour to make a product is relatively high. Palestinian factories are generally small, hence no economies of scale. The end result is that the Palestinian product is more expensive than can be purchased from China or India or wherever. This is the major threat to the Palestinian textile industry – many buyers are going elsewhere for cheaper products.

So, the struggle is to find ways that value can be added to Palestinian products, so they are no longer competing at the lowest end of the market but can extract some kind of premium. Generally, I believe that there is little currency in the fact that the products are made in Palestine. More time and effort should be spent in finding higher quality materials, and working to produce a much better quality product than the alternatives. Also the proximity of Palestine should mean that producers can get things to the European market much more swiftly than other parts of the world.

In what ways has the conflict affected you and the business?

In a sense, the conflict has had minimal effect on me. Clearly, I do not run the gambit of bullets, checkpoints and depression on a daily basis. On the other hand, it has been taking up much of my time and money for the last few years – on something that most other people see as a pointless endeavour. Our main objective is to build sustainability that means as many Palestinian workers as possible have stable jobs, can send their kids to schools, put falafal on the plate and hope in their hearts. People cannot eat words.

We may fail. We may make a minuscule effect even on the people that we directly give work to. But ultimately, if we fail, we will fail having tried everything in our power to do something positive. And hopefully others with more skills will take heart from our failure and see that Joe was no fool to give what he could not keep in an attempt to gain what he could not lose.

Joe and I talked a great deal on the phone. Joe hopes to expand the business, eventually importing jeans and other clothes from more Palestinian factories. On a limited budget and struggling to survive, Freedom Clothing badly needs to find buyers for the t-shirt business currently running and for other markets in the UK, Europe and around the world.

If you run a charity or other organization and want to buy printed t-shirts from an ethical company, trying to help manufacturers out of poverty instead of keeping them in it, Joe’s business will print any number of t-shirts with your design for a very competitive price.

Or if you are in a position to help Joe expand into other areas of the textile market, know a bulk buyer looking for reasonably priced ethical jeans, sheets etc, go to the Freedom Clothing website for contact information. Ask for Joe Turner.

This article was published by the Middle East’s leading English daily newspaperArab News.

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