ARAB-ISRAELIS GIVE NABLUS A TEMPORARY BOOST, BUT

C O N F I D E N T I A L SECTION 01 OF 02 JERUSALEM 001906

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E.O. 12958: DECL: 10/16/2013
TAGS: ECON KWBG IS PGOV
SUBJECT: ARAB-ISRAELIS GIVE NABLUS A TEMPORARY BOOST, BUT
CHECKPOINTS CONTINUE TO HOBBLE ECONOMY

Classified By: Consul General Jake Walles for reasons 1.4 (b) and (d).


1. (C) Summary: According to prominent Nablus businessmen,
continuing Israeli access restrictions cripple the city's
commercial sector, limit significant economic growth, and are
"political restrictions not related to security." They note
that the GOI's decision to allow Arab-Israelis (and their
cars) into Nablus during Ramadan improved the city's economy
"without a single security incident," but lament that the
policy change lasted only a month. Nablus business leaders
praise the Palestinian Authority's (PA) security efforts but
warn that residents are frustrated that, despite improved
security, Israeli incursions continue and checkpoints remain.
End Summary.


2. (SBU) Econoffs and SEMERS staff met over twenty senior
Nablus businessmen on October 15 in the industrial zone near
Huwarra checkpoint and at the Chamber of Commerce and
Industry in the city's central commercial district.
ConGenOffs noted removal of illegal street vendors and the
near elimination of unlicensed taxis compared to previous
trips. The businessmen reported increased personal and
property security and said PA police "now respond to
complaints."

Movement Restrictions Are
About "Politics, not Security"
--------------


3. (C) Nablus businessmen uniformly claim that Israeli
restrictions on access and movement into and out of Nablus -
particularly the Bayt Iba, Huwarra, and Awarta checkpoints -
cripple the city's economy. Several referred to Israeli
policy towards the city as a "siege," adding that these
checkpoints cut the city's commercial district off from the
residents of more than forty outlying villages. Residents of
Huwarra, a community south of Nablus' primary checkpoint, now
routinely travel more than an hour south to Ramallah to shop
rather than frequenting stores in Nablus as they did in the
past. The businessmen complained that the checkpoint delays
"have nothing to do with security" and claimed that Israeli
soldiers do not have a consistent policy on vehicle
inspections. The businessmen gave numerous anecdotal
examples of cars and trucks sitting idly for hours, only to
be subjected to a cursory "30-second" inspection before being
allowed to pass. The owner of a paint factory said: "We
accept the need for security inspections, but go and watch
the procedures at these checkpoints. You will see that these
restrictions are political, not security-related."


4. (C) One businessman noted that, prior to 2001, the Nablus
fruit and vegetable market attracted more than 10,000 daily
visitors to the city. The market is now effectively closed
due to access restrictions and checkpoints (Hamra, Tayasir,
and Ma'ale Efraim) that cut Nablus off from Jordan Valley
agricultural lands. Businessmen complained that multiple,
redundant checkpoints and the requirement to transfer loads
"back-to-back" from Israel into the West Bank increased
shipping costs for a container from Ashdod port by more than
300 percent.


5. (C) In addition, the businessmen claimed that restrictions
on the import of certain industrial inputs, an implicit
"requirement" to use Israeli middlemen, the lack of cold
storage facilities for agricultural products, and burdensome
VAT requirements have dramatically cut down commercial flows
in and out of Nablus. The Deputy Chairman of the Chamber of
Commerce said that imports to Nablus from Israel in 2007
totaled USD 170 million, compared to USD 700 million in 2004.
He estimated unemployment in the city at twenty-five
percent, with forty percent of the population living below
the poverty line.

A "Ramadan Gift" from the GOI:
Arab-Israelis in yellow-plated cars
--------------


6. (C) The businessmen all praised the GOI decision to allow
Arab-Israelis and their cars to enter Nablus during the month
of Ramadan. According to the Chamber of Commerce,
approximately 350 Arab-Israeli vehicles entered Nablus daily
during Ramadan, carrying an average of three to four
passengers each. The businessmen report there were no
physical changes to the checkpoints' infrastructure and wait
times were consistently less than an hour. Our contacts
estimate that Arab-Israelis contributed an additional 10-15

JERUSALEM 00001906 002 OF 002


percent to the city's economy during the month and said
Israeli security officials recognize that the visits came off
"without a single security incident." A number of
Arab-Israelis stayed overnight in the city, and the visitors
had a particularly positive impact on Nablus restaurants.


7. (C) The businessmen said the month could have been even
more successful if the GOI had allowed Arab-Israelis to make
larger purchases (such as furniture),instead of limiting
them to what could be carried in personal vehicles. The
successful month, however, has only increased frustration now
that the policy has returned to the pre-Ramadan status quo
and Israeli-Arabs are no longer allowed in. A number of
businessmen claimed that the experience only demonstrates the
city's residents will get "nothing in return" from the GOI
for improving the security situation.
WALLES