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 SIPDIS NEA FOR FRONT OFFICE; NEA/IPA FOR GOLDBERGER/LENTZ; NSC FOR PASCUAL; TREASURY FOR AHERN DEPT PLEASE PASS TO USAID FOR ANE/MEA:MCCLOUD/BORODIN 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