- The Washington Times - Friday, May 23, 2008

BETHLEHEM, West Bank - As a truck bomb exploded at a Gaza border crossing, Palestinians yesterday held a conference in a gleaming convention center to encourage investment in spite of the political and security risks.

The three-day Palestine Investment Conference, which drew more than 2,000 participants to Bethlehem, is an effort by the U.S.-backed Palestinian Authority to boost its economy by presenting the region as rich in business opportunities.

As if to underline those uncertainties, the convention center compound was secured by military guards carrying machine guns. And even though Israel helped smooth the passage of participants through checkpoints at the entrance to Bethlehem, some investors remained skeptical about whether now is the time to get involved.

“This is my first time I’m in Palestine. I find it a virgin atmosphere for businesses which can be developed,” said Abdel Rahman Abu Yusef, who has tourism and telecommunications businesses in Saudi Arabia.

However, Mr. Abu Yusef said he is skeptical about whether the barriers to movement in the West Bank would make investing in the Palestinian economy a viable option right now.

“When we went to visit colleagues from Nablus and its surrounding villages, we found checkpoints,” he said. “In view of the present situation, it will be very difficult to invest.”

Headed by President Mahmoud Abbas, the Palestinian Authority hopes billions in pledged donor aid and private-sector investment will boost the West Bank economy and strike a contrast with the Islamist Hamas-controlled Gaza Strip. The conference was the idea of Prime Minister Salam Fayyad, a U.S.-educated economist who worked with the International Monetary Fund.

Palestinian Planning and Labor Minister Samir Abdallah said several business ventures had been signed in the run-up to the conference, and that he expected several deals to come out of the talks, though he declined to provide details of the transactions. He did say high-tech businesses Cisco and Intel were considering the establishment of training centers in the West Bank.

Though the public-address systems often screeched and simultaneous translation transmitters went dead, Mr. Abdallah argued that the large turnout for the conference was evidence of its success. “This indicates trust and confidence in our economy, our private sector and our government,” he said.

But a Palestinian American corporate lawyer noted a relatively small number of Israelis present at the conference.

“If you walk in this lobby you would think you´re are in New York or Paris,” said the lawyer, who asked not to be identified. “But when it comes to substance, business people are suffering.”

The truck bomb in the Gaza Strip exploded at the Erez Crossing, the station on the northern tip of Gaza where Palestinians with humanitarian travel permits cross into Israel.

Despite the violence, the conference held a session on investing in the Gaza Strip. Panelists concurred that the current situation in Gaza - brought on by an economic siege enforced by Israel - makes investment there a difficult proposition. One participant from the Bank of Palestine estimated it would take $20 billion to $30 billion in investment to rebuild the blighted strip.

Mr. Fayyad said more patience is necessary before Gaza and its population of 1.4 million can become beneficiaries of the influx.

“There has been a massive deterioration in the economy, and commerce cannot flourish under the special situation we’re going through,” Mr. Fayyad, a former World Bank economist, said at the conference. “This will still take some more time to address.”