Identifier
Created
Classification
Origin
05TELAVIV3000
2005-05-16 13:44:00
CONFIDENTIAL
Embassy Tel Aviv
Cable title:  

SOME GAZANS QUESTION THE NEED FOR SETTLEMENT

pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 003000 

SIPDIS

E.O. 12958: DECL: 05/06/2015
TAGS: ECON EAID KWBG PREL IS GAZA DISENGAGEMENT SETTLEMENTS
SUBJECT: SOME GAZANS QUESTION THE NEED FOR SETTLEMENT
GREENHOUSES

Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d)

This cable was cleared with Consulate General Jerusalem.

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 003000

SIPDIS

E.O. 12958: DECL: 05/06/2015
TAGS: ECON EAID KWBG PREL IS GAZA DISENGAGEMENT SETTLEMENTS
SUBJECT: SOME GAZANS QUESTION THE NEED FOR SETTLEMENT
GREENHOUSES

Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d)

This cable was cleared with Consulate General Jerusalem.


1. (C) Summary and comment: Some elements within the Gazan
business community have questioned the importance of intact
transfer of the settlement greenhouses following Israeli
withdrawal, suggesting that the GOI, the donor community, and
the PA have done insufficient work convincing the private
sector of the economic benefits of the proposal. Certain
contacts argue that the PA and donors should prioritize
investment in existing Palestinian-owned Gaza greenhouses
over rehabilitation of settlement greenhouses, while others
claim that maintaining the greenhouses will prevent
much-needed long-term residential and commercial planning for
settlement lands. Continued reports of PA uncertainty over
the proper mechanism to handle transfer of the assets, as
well as announcements that the PA will not recognize private
purchases of settlement assets, have led some within the
Gazan private sector to doubt that the greenhouses will
continue operating after Israeli withdrawal. GOI
disengagement administration head Yonathan Bassey concurs
that settlers will dismantle their greenhouses unless they
can find buyers within the next several weeks, but some Gush
Katif settlers are reportedly maintaining their agribusiness
assets in the hope that disengagement will not be carried
out. End summary.

-------------- --------------
GOI and Donors Need PA Decision to Move on Assets
-------------- --------------


2. (C) Disengagement planning on the Israeli side has
prioritized the intact transfer of some 4,000 dunams of
high-tech greenhouses into Gazan hands following withdrawal,
and GOI officials say they are now waiting for the PA to
designate a custodial body for the greenhouses and other
agribusiness assets. (Note: According to ConGen discussions
with senior PA officials involved in disengagement
coordination and planning, the PA plans to be the custodian
of properties until decisions on the disposition of the
assets are made, whether to keep and privatize the assets,

return assets to Palestinians with pure legal title, or
settle disputed claims. End note.) USAID,s Palestinian
Agribusiness Partnership Activity (PAPA) program, designed to
help safeguard the greenhouses during the transfer and to
facilitate Gazan-Israeli marketing and shipping links
post-disengagement, is ready to assist the PA as needed.


3. (C) Gazan private sector contacts claim PA positions on
the transfer of assets have focused in part on the need to
avoid de-facto legitimization of Israeli ownership.
According to staffers working for Israeli Vice PM Shimon
Peres, PA officials have been reluctant to consider
third-party custodianship, only recently acknowledging to
Peres that they may be willing to hire the Dutch body that is
slated to take over the 200 dunams of agricultural land owned
by the Peres Center for Peace. (Note: PA officials working
on the disengagement portfolio told ConGenOffs that the GOI
has yet to respond to its questions about the possible role
of third parties, including in the verification of assets
pre-disengagement. End note.) The PA,s Disengagement
Ministerial Committee announced April 13 that any contracts
to purchase land or assets from which Israel would evacuate
would be considered void, thereby nullifying a small number
of settlement asset purchases that three major Gazan firms
reportedly made in late March and early April. "The PA says
the assets belong to the people and they don,t want private
businesses to come in," Pepsi CEO and Chairman of the
Palestinian Business Association Mohammed Yazgi told Econoff
April 15, "but they have no plan for what to do with them."

--------------
Some Gazans Ask, Why Bother?
--------------


4. (C) Despite the potential economic benefits of some USD
80 million worth of advanced agribusiness technology within
the settlement greenhouses, several Gazan private sector
contacts have called into question the benefit of maintaining
them at all. Dr. Hani Shawa of the Bank of Palestine said he
believes the settlers hope to sell their greenhouses for
"hundreds of thousands of shekels," a price far beyond the
means of most Gazan businesses or the PA. In Shawa,s view,
the money the PA and the donors will have to invest in
maintaining and in some cases refurbishing the Israeli
greenhouses would be better spent on expanding and improving
approximately 4,000 dunams of existing Gazan-owned
greenhouses. "They may not be as high-tech, but they are
perfectly suited to growing the main produce exports," Shawa
said. He emphasized that donors should not worry about the
potential loss of employment for some 9,000 Gazans if the
settlement greenhouses are dismantled or destroyed during
disengagement -- the boom in construction that he is
confident will follow Israeli withdrawal from 30% of the
Gaza Strip,s land will, he asserted, create more than enough
jobs to make up the loss.

5. (C) Housing engineer and ex-Palestinian Investment Fund
board member Jawdat al-Khoudry told Econoff April 13 that he
believes most of the Israeli greenhouses should be simply
torn down and removed. He views the settlement greenhouses
as "scattered" throughout Gush Katif, and believes that "they
will get in the way of long-term planning, which is what Gaza
actually needs." Khoudry opined that agribusiness should be
only one component of a carefully laid-out region including
high-rise housing for Gazans currently living in refugee
camps, tourism facilities, and light-industrial development.
He acknowledged that within this framework, a number of the
settlement greenhouses could be rebuilt to great benefit, but
he dismisses donor concerns over the high cost of such an
enterprise. With a good 20- to 50-year plan in place,
Khoudry said, Palestinian and foreign private sector
investors will be drawn to Gaza on their own.

--------------
Potential Problems the Same
For Settlement and Gazan Greenhouses
--------------


6. (C) PalTrade cash crops project officer Hashim
al-Hussaini asserted that while the agribusiness sector is
crucially important to the Gazan economy -- according to him,
agribusiness employs 30% of Gazans and generates 8% of Gazan
GDP -- maintaining the settlement greenhouses is not the only
key to strengthening agriculture. Initial private sector
enthusiasm for USAID's PAPA program was strong, he conceded,
and numerous Palestinian firms will likely compete for
partnership-building assistance under the program, yet
according to Hussaini the Gazan growers unions and major
agribusiness firms are in agreement that existing Gazan-owned
greenhouses can prove just as effective as the high-tech
Israeli assets. Moreover, Hussaini said, potential
post-withdrawal problems like water shortages and delays in
market access due to Israeli border closures will be the same
for either settlement greenhouses or existing
Palestinian-owned greenhouses in Gaza. "Whether to invest in
the settlement assets or the Gazan greenhouses is a political
question with no real relevance to agribusiness growth," he
asserted.


7. (C) Hussaini noted that Palestinian Gazan growers
exported over 150,000 tons of cash crops to EU markets in
2003 using only their own greenhouses. This high volume
encouraged the EU to grant a tax exemption for up to 250,000
tons in the 2004 season, potentially promoting even further
growth of the Gazan agriculture sector, yet IDF-imposed
security closures at the Gaza border made this total
impossible to reach. Hussaini asserted that unless the GOI
ensures redundancy at the border crossings, and donor efforts
like PAPA guarantee market access, neither maintenance of the
settlement greenhouses nor investment in Gazan-owned
agribusinesses will boost the broader economy. (Note:
Several PA officials, including Agriculture Minister Walid
Abed Rabbo, a former UNDP agriculture consultant, continue to
express support for PAPA's program to safeguard the
settlement greenhouses and help ensure intact transfer. End
note.)

--------------
Will Settlers Dismantle or Not?
--------------


8. (C) Yonathan Bassey, head of the GOI,s disengagement
administration responsible for relocating and compensating
settlers, told EconCouns he expects that unless settlers find
a buyer for their greenhouses within the next several weeks
-- whether private Gazans, the PA, or a third party -- the
settlers will begin dismantling the valuable machinery inside
their greenhouses in preparation for relocation. This view
is reflected within the Gazan private sector, where contacts
say they expect settlers will "destroy" some 40% of the
greenhouses out of "spite." Gush Katif spokesman Eran
Sternberg told Econoff, however, that since his community
believes there is a chance disengagement will fall through,
they are not dismantling or removing anything, especially not
greenhouses and other agribusiness assets.


9. (C) Comment: While the economic importance of the
settlement greenhouses has become accepted wisdom within the
donor community, ambivalence within the Gazan private sector
suggests that insufficient work has been done to generate
support for the proposal within Gaza itself. One reason for
this might be the fact that the PA was still waiting to
receive an inventory of settlement assets from the GOI, and
was developing a mechanism by which to process Palestinian
ownership claims to the land on which these assets sit. At
this point, the private sector may view PAPA's
partnership-building component, applied towards increasing
market access for existing Palestinian Gazan-owned
agribusinesses, as more useful than the intact transfer of
the settlement greenhouses. End comment.

********************************************* ********************
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