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February 18, 2005/Adar 1 9 5765, Volume 57, No. 25
Mideast peace hopes spark economic hopes
GIL SEDAN
Jewish Telegraphic Agency
JERUSALEM - One party follows another at the Tel Aviv stock exchange, and the brokers just keep smiling.
Feb. 15 was a typical day at the exchange. Right after trade started, the market jumped .2 percent.
And that's not all: The latest report from the Central Bureau of Statistics showed Israel's economy grew 4.3 percent last year, as the credit-rating agency Fitch upgraded Israel's domestic currency forecast from negative to stable.
And last week, as Prime Minister Ariel Sharon and Palestinian Authority President Mahmoud Abbas met for their summit at Sharm el-Sheik, an international tourism convention opened in Tel Aviv. Delegates from 30 countries forecast greater and greater windfalls for the industry.
Next week, Tourism Minister Avraham Hirschsohn and his P.A. counterpart, Matri abu-Aita, will meet with Pope John Paul II in an attempt to increase Christian pilgrimage to the Holy Land.
The Tourism Ministry expects about 700,000 Christian tourists this year and thinks about 250,000 of them will be pilgrims. Last year Israel hosted 500,000 Christian tourists, including 150,000 pilgrims.
The Israel Hotel Association expects 1.8 million tourists in Israel this year, up from 1.5 million last year.
Charter flights from Europe to Eilat and other resorts are on the upswing as well. Issta Lines, a travel company, is again marketing tourism packages from Britain, Holland and France to Eilat, Sinai and Aqaba in Jordan - all for $1,000 for a 10-day tour, including airfare and taxes.
If the situation remains quiet and tourism picks up, the Palestinians stand to gain right away.
Palestinian restaurants in cities such as Ramallah and Bethlehem used to draw thousands of Israelis, many of them Arabs, on the weekends. If the restaurants reopen, they could boost the economy in Palestinian areas near Jerusalem.
"Just allowing the entry of Israeli Arabs into the markets of the West Bank would give us a real boost," Hisham Awartani, director of the Center for Private Sector Development in Ramallah and Nablus, told JTA. "This is not a big concession for Israel, but for towns like Jenin, Nablus, Tulkarm and Kalkilya it could mean a 180-degree turn."
While Israel's economy has bounced back, the Palestinians are sinking further into poverty, handicapped until recently by an inept and corrupt government that misused billions of dollars in international aid and invested in terrorism rather than development.
Terrorists often have targeted precisely those areas that provide jobs for the Palestinians, such as joint industrial zones on the Gaza-Israel border. Their rationale seems to be that anything that increases Palestinians' hardship will further embitter them against Israel.
Still, most economic analysts agree that for the first time in four years, recent developments in the region present a good chance for economic progress and collaboration.
Analyst Ya'acov Sheinin, president of Economic Models Ltd., one of Israel's foremost economic consulting firms, predicts that if the region remains stable, Israel's economy will grow at 6 percent a year.
But Awartani said Palestinians would benefit only if laborers were allowed back into Israel in large numbers.
"No one talks about the good old days when some 150,000 Palestinian laborers entered Israel daily," Awartani said.
"We can't go back to where we were, but imagine what a change it would make if some 50,000 laborers would find work in Israel within the next three months," he said. "What a change it would make in the political climate."
The forecast for the Israeli economy is bright. Shraga Brosh, president of the Manufacturers Association, estimated that foreign investments in Israel could reach $3 billion this year, three times last year's figure.
But it will take longer for investors to return to the Palestinian territories, Awartani warned: They'll have to be convinced that the stability is real.
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