"EXPOTECH" WEEK PROMOTES PALESTINIAN INFORMATION

UNCLAS JERUSALEM 002025 SENSITIVE SIPDIS STATE FOR EEB AND NEA/IPA, PASS USAID FOR BORODIN E.O. 12958: N/A TAGS: ECON EINV ETRD EAID KPAO KWBG IS SUBJECT: "EXPOTECH" WEEK PROMOTES PALESTINIAN INFORMATION TECHNOLOGY SECTOR, SEEKS FOREIGN INVESTMENT ¶1. (SBU) Summary: The annual "ExpoTech Technology Week" in Ramallah brought together representatives from international and local information and communication technology firms. The week-long exhibition, funded in part by a $139,000 grant from USAID, promoted international investment in the Palestinian IT sector. PA officials pledged rationalized market regulation, plus liberalization at the expense of the current telecom duopoly. Private sector contacts called for greater incentives for investors, and assistance with continued GOI restrictions on importing IT-related goods to the West Bank. While local companies report increased hardware sales, they said that continued growth depends on the easing of import restrictions. End summary. USG Joins with Palestinian Firms to Promote IT Sector -------------- -------------- ¶2. (U) The Palestinian Information Technology Association (PITA) and Palestinian Information and Technology Incubator (PICTI) hosted the sixth annual "ExpoTech Technology Week" in Ramallah from November 1-5. This year's program was expanded to include a day-long conference with a video conference link for Gazan participants; well-attended training sessions in major West Bank cities hosted by Microsoft, Cisco, and Google; networking opportunities; and a trade show that attracted an estimated 33,000 attendees. USAID contributed $139,000 to ExpoTech, and received prominent media coverage. A ConGen Econ Officer served as moderator for a panel discussion on building a knowledge-based economy. ¶3. (SBU) Prime Minister Salam Fayyad kicked off the week-long event with a speech emphasizing the growth potential of the IT sector, noting that 49 percent of Palestinian families own computers, Internet penetration is nearly 30 percent -- much higher than the 10 percent average in the Middle East -- and IT currently ranks as the third-largest sector in the Palestinian economy. Note: While accurate, the relative size of the sector is misleading, given that it includes PalTel and its subsidiaries. Contacts estimate that, without PalTel, IT companies contribute 2-3 percent of GDP. End Note. Minister of Telecom Abudaka stressed the importance of market liberalization, adding that prices must come down by January 1 or sole operators "PalTel and Wataniya would get the shock of their lives." He also pledged that a fully independent regulator would be set up before the end of the year, a project that is already underway with USAID assistance. Import Restrictions Continue to Plague the Sector -------------- -------------- ¶4. (SBU) The Consul General toured convention exhibits on November 4, meeting local IT executives, including distributors of U.S. products. Private sector representatives told the Consul General that consumer spending has sharply increased sales (one contact reported he expects to double his sales in 2009 to $10 million) but generally noted a continued -- if not increased -- difficulty in importing IT products to the West Bank. The permit procedure continued to lack transparency, relying on personal and constant intervention with the GOI, a hardware distributor said. He added that "this was possible when I had a few shipments coming in a month, but with my increase in sales, I no longer have the time to go and have coffee at Beit El every day." Note: Beit El, an Israeli settlement in the West Bank near Ramallah, is the location of the Israeli Civil Administration Offices. End Note. RUBINSTEIN