GAZANS TORN OVER DUBAI INVESTOR'S PROPOSED

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 001064 SIPDIS E.O. 12958: DECL: 02/20/2014 TAGS: EFIN ECON EAID KWBG IS GAZA DISENGAGEMENT ISRAELI PALESTINIAN AFFAIRS SETTLEMENTS SUBJECT: GAZANS TORN OVER DUBAI INVESTOR'S PROPOSED PURCHASE OF SETTLER HOMES Classified By: Economic Counselor Bill Weinstein for reasons 1.4 (b) an d (d) ¶1. Israeli media reported that Dubai businessman Mohammed Alabbar recently visited Israel and the Palestinian territories with an offer to purchase settler homes intact, saving the GOI the need to demolish them. Previously, NSC advisor Gabi Blum told EconCouns that Alabbar's visit had been sponored by the GOI and had included a "brave" trip into Gush Katif to speak with settlers. Einat Wilf, assistant to Deputy PM Shimon Peres, confirmed that while there is widespread support for Alabbar's proposal within PM Sharon's cabinet, adopting it would require the GOI to rescind its official decision to demolish settler homes. In addition, she said, such a change would only be made in close coordination with the PA, via working-level negotiation groups to be established this week. Palestinian private sector contacts are ambivalent about the prospect of Gulf State investment in settlement asset development. Some believe that foreign ownership of building contracts is irrelevant as long as Gazan inputs and labor are utilized, while others argue that only Gazan businesspeople have the understanding to properly dispose of the settlement assets. More broadly, Gazan contacts were pessimistic about direct GOI-PA negotiations on the economic aspects of disengagement, noting that the private sector has been ignored by the PA. -------------- -------------- Dubai Construction Mogul Hopes to Buy Settler Homes -------------- -------------- ¶2. (SBU) Israeli print media and radio reported February 18 that Mohammed Alabbar, chairman of Dubai's Imr construction company, recently visited Israel and the Palestinian Territories with an offer to purchase settler homes in the Gaza Strip in tandem with Israel's planned pullout. Alabbar would pay "tens of millions" of dollars for the houses, ostensibly saving the GOI the need to demolish them during evacuation. In exchange, Alabbar's firm has reportedly requested exclusive building contracts for the settlements. EconCouns had received news of this visit previously from NSC advisor Gabi Blum, who confirmed that the GOI had sponsored the visit. In a visit to the Gaza Strip, Blum said, Alabbar had visited Gush Katif settlements and "bravely" spoke with 
settlers about his proposal. ¶3. (C) Einat Wilf, assistant to Deputy Prime Minister Shimon Peres, told Econoff February 18 that there is widespread support for Alabbar's proposal within PM Sharon's cabinet, but that the GOI still officially intends to destroy settler homes and remove rubble prior to withdrawal. (Note: Some contacts state that the GOI decision to destroy homes is political symbolism -- a "severing of ties" with the Gaza Strip. The GOI has acknowledged on numerous occasions, however, that demolition and removal of rubble would be expensive and time-consuming. End note.) Wilf emphasized that any change in the government's decision to destroy settler homes would be made in close coordination with the PA, via new working-level GOI-PA negotiation teams. -------------- -------------- Settler Homes Won't Suit Gazans -- Construction Needed -------------- -------------- ¶4. (C) Private sector contacts unanimously reinforced the view that settler homes are not appropriate for Palestinian families and will do nothing to alleviate Gaza's housing shortage. They also emphasized that the construction industry can potentially be Gaza's fastest-growing sector post-disengagement, and that development of settlement assets post-withdrawal is therefore imperative. PalTrade agribusiness project officer Hashim Al-Hussaini told Econoff he is not opposed to foreign ownership of settlement assets as long as the investor understands he must tear down the settlement houses and use exclusively Gazan inputs and labor to build replacement housing. Dr. Hani Shawa of the Bank of Palestine noted that construction can, in principle, revitalize every major sector of the Gazan economy, including furniture, cement, aluminum, glass, and metals, and can provide immediate work for hundreds of thousands of laborers. -------------- Gazan Private Sector Doubts PA is Listening -------------- ¶5. (C) Jawdat Al Khoudry, engineer and board member of the Palestinian Investment Fund, told Econoff that Alabbar "doesn't know what Gaza needs -- if he understood the situation, he would stop his bid" to purchase settler homes intact. Khoudry said he is unimpressed by Alabbar's reported discussions with Abu Mazen -- in his view the PA does not understand what is economically good for Gaza either. He and other contacts are pessimistic about the effectiveness of the working-level GOI-PA negotiation groups currently being established. Nobody is talking to the private sector, contacts say, although it is the private sector alone that understands how to boost the Gazan economy post-disengagement. While he was quick to explain that many Gazan businesspeople are preparing for disengagement -- including arranging a potential conference of third party and NGO investors to take place in Cairo in late March -- he expressed frustration that "economic planning for disengagement is being done in Ramallah." ********************************************* ******************** Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv You can also access this site through the State Department's Classified SIPRNET website. ********************************************* ******************** KURTZER