Joe Grabiner on the optimism to be gained from Israeli/Palestinian textile manufacturers.
Myself and my sister have had the pleasure of working for the grandly named Israeli-Palestinian Chamber of Commerce. This is a very small (one man) organisation that works to build commercial links between the two (nearly) states. When introduced to our task- researching future opportunities in the textile and garment industry- we were not overly excited. What followed whowever as a highly interesting series of meetings and encounters that got me thinking.
First, some context:
In 2008 the total GDP of the West Bank was $6.641 billion of which 13.6% was generated from the industrial sector, with 23% of the total workforce in the West Bank working in industry. Ultimately any investment in the West Bank is highly important. As of 2010, unemployment was at 17.3%.
The textile industry is the second largest employer in the Palestinian territories. Around 30% of Palestinians are employed in textiles. There are officially 17,562 garment and textile workers within the Palestinian Authority. However, due to the informal and small-scale nature of many family enterprises, employing less than ten people, there may be many more. Even most registered manufactures employ less than twenty workers.
There are now around 720 member companies of the Palestine Textile and Garment Union. (In order to be a member, a business must have at least ten sowing machines, probably excluding a number of small home-based enterprises). This means textiles and garments represent 19.7% of all industrial establishments. Most businesses are micro or small-scale: 50% employ between one to four workers, and only another 27% employ between five and nine workers.
The Palestinian textile industry is almost entirely dependant on the Israeli market; 80% – 90% of the textile and garment factories in the Palestinian Authority are subcontractors to Israeli companies. This means that the political situation has a great effect on business. For example, in the 1980s and 1990s, there was a substantial increase in Israeli demand from factories in the Palestinian territories because of international free trade agreements. Contrary to this, during the second Intifada, the total output of the Palestinian textile industry decreased from $96 million in 2001 to $70 million in 2004. However, as well as the issue of over-dependence, this close relationship also benefits the Palestinian manufacturers as the Israelis bring experience and know-how.
The relationship between Israeli companies and Palestinian manufacturers is very clear. The Palestinian partners are involved in the sowing, ironing and packaging stages of manufacture (labour-intensive work with low profit margins) whereas the Israeli contractors are in control of the raw materials, design, marketing and distribution. With this division of processes, Palestinian companies usually use low-tech traditional methods, like simple electric sowing machines. This is clear in the Palestinian industry statistics as only 12 % of West Bank manufacturers have access to local raw materials. It is positive for the Israeli side to do business in the Palestinian Authority and encourage subcontractors to establish their own factories there because the wage structure is a lot lower than Israel, at a ratio of approximately 1:4.
The unofficial aim of the parent organisation that the chamber of commerce falls under is to create a Palestinian middle class. At the present time there is a small, rich ruling class (much of which is politically driven and unstable) and below them is a wide base of poor men, women, and many children. To create a middle class is to create a group in society who own property, have stable wages, and care about their community. This also has the purpose of giving them something to lose. For those Palestinians living in partially built homes or refugee camps, living off the money that the municipality sends them they have nothing to lose. Contrast this with a homeowner who has 3 employees working in his factory and both his children in full time education. The latter character will demand more from their government- most acutely they will be demanding peace and stability. This is why building trade links between the Palestinians and Israelis is important, and hugely necessary in terms of building the base on which I hope the Palestinian nation can succeed.
The research we were doing took the form of traditional Internet searches but more usefully we were able to go and meet some of the people already involved in work in the textile industry that crosses the border. (The normal set up is that Israeli companies will design a garment, buy the fabric, dye it, and then cut it at which point it will be sent to a factory in the West Bank for sowing, ironing, and packaging and then brought back to Israel to be exported or sold).
The first man we met was Mr. Business Owner A. He was an older man who owned a big clothes company in Israel who had been working in the West Bank for over 20 years. It was striking hearing him articulate his passion for the Palestinian cause. He was completely removed from politics (or as far away as one gets in Israel) yet he told us flat out that given a choice between cheaper Egyptian manufacturing and more expensive Palestinian manufacturing, he would choose the latter. He continued to tell us that there are no better, more trustworthy, or hard working people than the Palestinians. I never expected these businessmen to open up as much as they did- let alone on such an ideological level. “I feel its important for the Palestinians to flourish” he demanded in his Israeli-eastern European accent. He continued, “In order to get peace, we need to support these people. They need help and we can give them that help.”
The next day we were able to travel to Kfar Saba from where we took the 10 minute taxi ride to the Tzofim check point at the entrance to the West Bank- close to the town of Qalqilia. Walking the 5 meters across the checkpoint we were subjected to an inconvenience not even comparable to that of the abuse the locals suffer. These 4 young IDF soldiers found it hard to comprehend why two British teenagers wanted to go into Qalqilia, let alone go and talk to the factory owner there. However on the presentation of our glistening maroon passports they withdrew back into their shady kiosk. (As I side note, I definitely take my British passport/citizenship for granted…amazing the opportunities that arise out of the good luck of being born in a certain place in the world).
On the other side of the checkpoint we were greeted by a smiling Palestinian man sitting in the front seat of a shiny, air-conditioned 4×4. His name was Ashraf. He was in charge of his father’s factory while his dad was in Mecca this Ramadan. He spoke no English but had sufficient Hebrew for my sister to hold a conversation with him. He drove us through Qalqilia to his family’s factory. This was my first visit to the West Bank (apart from a few journeys from Tel Aviv to the desert going through the southern West Bank). It is not big by Israeli standards but sprawls its way over hills and wasteland. No building was more than 4 storeys high and most were 2-floored concrete squares that had been started but not finished with holes for windows and certainly no plaster on the walls. One of the more amusing sights in the town were the half a dozen or so donkey-drawn carts ridden by old men. I was unsure if they were transporting goods around the town or whether this was strictly their chosen mode of transport. Even so, it put things into perspective that here people were riding donkeys and just 15 minutes away was the Kfar Saba mall where we later went to slurp on an ice coffee.
Arriving at the textile factory we were met by yet another smiling man. This was Ahmad. He worked for an Israeli company who used the factory in Qalqilia to make goods. In fact- the man who we had met on the previous day owned the Israeli company who used it. As Ahmad was an Israeli-Arab who lived in the Galilee he was able to act as a go-between the Israeli company and the Palestinian factory and had very good English too. He showed us around the small factory and answered some of our questions too. There were 90 people all together in the factory. Around 50 women who would sit upstairs by sowing machines and then a further 40 men downstairs who would handle the ironing and packaging procedures. The factory one of the biggest employers in the whole of Qalqilia, in fact it was second only to the municipality. We found out that the man who found the factory, Ashraf’s father, was able to do so as he had previously worked for the Israeli company in Israel and twelve years ago when he was told that all production would be moving out of Israel he was encouraged by his supervisors to set up his own factory in the West Bank. The enterprise was admirable to say the least. Ahmad had a lot to say, mostly concerning the process by which the workers sow underwear together (which I shall not tell you about) however about 20 minutes in when we thought we had finished our interview he surprised us. He made a point of noting “I am now saying this for myself” as a way of indicating this was purely his own opinion but went on to plead and say how much help the Palestinians want and need. “They want to work, they want to meet with more Israelis, but they need help”, he said. It was very interesting hearing the two sides of the same story that in this case were not all that different. He asked us to go back to Avi (the man we were working with) and tell him that they need more help. It was uplifting to see the successful economic cooperation between Israelis and Palestinians but quite a reality check to hear Ahmad’s tirade.
Several days passed and many more boring people were met however the last encounter of the week was certainly the most sobering. This was the managing director of a big Israeli clothes manufacturer who outsourced most of their production to the Far East or to Romania but used a small factory in the West Bank in order to produce quantities that were too small to send away or things he needed back quickly. This man, Mr. Business Owner B, was different. It was not just that he did not share the ideological zeal of Mr. Business Owner A but he gave us something altogether more negative about the situation. He said that in the 1980s and early 1990s he would travel around the West Bank and feel safe, and do business easily however after he first and second Intifadas his feelings changed drastically. He openly said that he no longer trusted the Palestinians and that if he could avoid it, he would not do business with them. It was clear that because of periods of violence against Israel he tarnished almost all Palestinians with the same brush- that of a suspected terrorist. It was a reminder of the plurality of views in Israeli society and the harsh truths that it is not just about convincing businesspeople to make deals but building the trust between them that will then allow them to talk- let alone to business.
The one conclusion we drew from our week was that there is potential for further co-operation between Israeli companies and Palestinian manufacturers within the textile industry. There is willingness on both sides to do more business however both sides need to feel like they can trust one another. The only way to achieve this is to get them to meet. Currently, it is illegal for (almost) all Israelis to go into the West Bank and problematic for Palestinians to travel freely around Israel. This makes it even more important to seek dialogue. Without dialogue there will be no trust. Without trust- no economic prosperity.
A version of this piece originally appeared on http://lobashamayimhi.wordpress.com/