Sunday, January 6, 2008

Dictatorship Of The Bourgeoisie, Please

“On average, donors annually injected $350-450 million into the Palestinian Authority from 1994-2000,” my friend, the Ramallah entrepreneur and consultant Sam Bahour, lamented to me; “from 2001-2007, about $650 million annually; this amounts to over $7 billion, more per capita than anyplace in the world except for Israel, which is heavily subsidized by the U.S. Yet of those funds, less than 5% were invested in the development of the private sector. This underinvestment in businesses is a disaster.”

If you think these are the sour grapes of a Palestinian capitalist, feeling cut out of a feeding frenzy, you don’t know Sam or Palestine. An MBA raised in Youngstown Ohio, the scion of a grocery business, Sam came to Ramallah in the early nineties to build a country (though the Israeli government has, perversely, made it hard for American-Palestinian professionals like him to get permanent visas).
It is fine and well to talk about a secular national movement, Sam understood, but what this ultimately means is Palestinian contractors, software engineers, etc. who'll be using their freshly printed passports to get out and compete in the world; Palestinians who have the technological and management know-how to make things regional—even global—customers really want, while providing rewarding jobs for youth who would otherwise seek solidarity in gangs and meaning in noble deaths.
“Everywhere you go in Palestine you see pictures of martyrs,” he told me, driving me past a large poster in a square, commemorating the deaths of two youths killed by stray IDF fire; “The pictures of the Israeli army’s innocent victims merge into pictures of suicide bombers and real insurgents, looking sincere and ready for sacrifice. This kind of thing works on our young people. We are surrounded by a kind of big, morbid memorial. We have got to create another reality fast.”
THE REALITY SAM created is a shopping center, the first in Palestine with an genuine supermarket called (fittingly) “Bravo” serving as its anchor store; a center complete with an Italian restaurant and play-jungle upstairs where kids can go to climb, burrow, play fussball or video-games, while their parents shop for food. “There was an initial idea that we would charge admission to the play area, but I said ‘no way.’ These kids are lining up at road blocks all the time. Could you imagine a line of kids waiting to get into the slides and jungle-gyms?”
Security is provided by an independent force, to preclude any discomfort some would feel if this or that militia showed itself. The supermarket, only a couple of years old, is starting to turn a profit. The shopping center has prompted construction of another one across the street (“It took away our ‘Colors of Benetton’ store—fine with me...”), and directly across the street a new ten-story office tower is rising. (“There was supposed to be a limit of three stories, according to municipal regulations, but somebody got Arafat's approval,” Sam winked.)
“BRAVO” STRIKES THE eye as an unremarkable supermarket, which is precisely what makes it remarkable, particularly coming off the helter-skelter streets of Ramallah. The floors and shelves are organized and immaculate; the bar-codes are neatly lined up on products from everywhere, including Israel (“how could we not offer Israeli products, when our economies are entwined?”), but emphatically not from Jewish settlements across the Green Line. What doesn’t meet the eye is even more significant, for it is a microcosm of the entrepreneurial efficiencies, pragmatism, and cooperative groundwork that makes the peace process less abstract for Palestinians and Israelis both.
“The point-of-sale system here is Retalix, the Herzliya solutions company,” Sam told me, recalling the days when he was CEO of Bravo. “I told my board, I can go to Houston, look at the price-performance specifications of all the systems, and buy a more expensive Retalix product in the form of their American version. Or I could go to Herzliya and get a better deal, save the time and airfare, and get them involved in helping their neighbors become world class. My board went along. They made the right decision.”
For Sam, doing things well at these subtle levels will amount to a Palestinian counterlife, the alternative to a bureaucracy by turns starved or bloated by donors, or PA officials whose legendary corruption fuels Hamas’s rise. He is creating the DNA of a Palestinian national home. He's even persuaded one of Palestine's first banks, Arab Islamic Bank, to begin making business loans based on the strength of business plans, not only on collateral.
WHAT’S WRONG WITH this picture? In a nutshell, for DNA to propagate itself, cells need to divide, clone, connect and be nourished. Bravo cannot, and this is the disaster. The systems underlying the success of Bravo are really meant for a chain, you see. A whole network of Bravo stores would help revolutionize Palestinian merchandising, prompting copycat retail clothing and other chains; it could provide a natural channel for new food processing companies, which might go head-to-head with Israeli companies across Israel, Palestine, and Jordan. It could stimulate the creation of shopping centers in every Palestinian city, anchoring new construction projects that would define neighborhoods, preparing the ground for new housing stock—something you already see a huge demand for in Ramallah, which is developing quickly but in a less coherent way.
The problem is that no matter how good your inventory systems, they are pretty much worthless unless your suppliers can restock your stores in a predictable way. Supermarkets are really the hub of a complex system of logistics: the transportation infrastructure must be reliable, geographies must be convenient to one another, deliveries must be timely. This is exactly what Palestine lacks owing to the occupation. The most terrible cost of occupation is what businesspeople call opportunity cost.
THE BURDEN OF 540 checkpoints across the territories is not simply that individuals cannot get a spouse or child to a hospital, or that you cannot know if getting to the wedding of a cousin will take you 40 minutes or four hours. These are disgusting things, but they do not cripple a whole nation. The problem of so many checkpoints is that it makes things virtually impossible for the Palestinian middle class to build businesses, which create hope, which creates businesses, which create a secular civil society.
Bravo could be 40 stores. It has only three, two in Ramallah, one in Hebron. Investors, reasonably, hesitate to fund its expansion. This is a source of frustration for Sam, for he knows that in part he must deal with the inertia of a business class that has a very local and conservative mentality. But most of all he knows that they must deal with the occupation.
How do you convince investors to expand a grocery business when you cannot assure that produce will not rot on a truck, stranded at one of five checkpoints, along the road from Ramallah to Nablus? How can you believe in the future of cooperation when the reason for the checkpoint is not the fear of a suicide bomber in Tel-Aviv, but the protection of Jewish settlers on hills between Ramallah and Nablus? Worst of all, perhaps, how can you believe in peace, which will mean the return of millions of refugees, when the Israeli government continues to ring Jerusalem with Jewish neighborhoods, as if Hebron and Ramallah were not, in effect, suburbs of a future East Jerusalem metropole?
I don’t mean to underestimate the risks. Checkpoints are a network of their own, aiming at controlling a dangerous situation—a network of informers and inspections, which has grown over the years in a cycle of revenge (see my previous post from December 28). It is very hard to let go of the tiger’s tail; just last week, tons of material that could be used for explosives were uncovered by the PA.
Nor does Sam underestimate the dangers. He is far more vulnerable to radicals and killers than Israelis are, there on the other side of the wall. With poverty all around, it is easy to imagine Hamas militants carping at the dictatorship of the bourgeoisie; imagine that they’ll depict Bravo’s profits as a kind of theft from the hungry, depict Bravo’s organized way of making profit as a kind of corrupt materialism that must be countered by Islamist humility. But Sam, tooling around in his beaten up Hyundai, is willing to face the dangers. He knows that hopelessness is fueling the fanaticism much more than the other way around.
ISRAELIS AND AMERICANS do not seem to realize, Khalil Shikaki told me later, that the rise of Hamas can be directly traced to the compounded misery created by things like the internal checkpoints. The wall is a disgrace, but shouldn’t this be enough to give Israelis the sense of security that they need? “We get a lot of talk about improving things on the ground, but not one checkpoint has been removed. Olmert and Barak talk about security, or even coalition politics. These are very shortsighted considerations. We are seeing the imminent end of a secular national Palestinian movement. We have to see a dramatic improvement in people's lives this year, not somewhere on the horizon. If not, people like me will go plant gardens.”