Palestinians have been increasingly moving their businesses to neighboring countries in recent months.
Several factories were recently moved from Gaza to Egypt, including a toilet paper manufacturer that had been operating in Gaza for 25 years, and a textile factory from Beit Hanoun.
The phenomenon is new, and did not occur during the first year of the intifada, when business owners hoped things would improve.
Even business affiliated with senior Palestinian Authority officials, including a medical equipment plant associated with Mussa Arafat (Palestinian Authority chairman Yasser Arafat's cousin, who is also a senior security official) transferred its operations to Egypt. Textile plants have been transferred to Jordan, Morocco and other countries.
Retailers have also begun transferring their core businesses to Jordan and Egypt, due to the recession, cash shortage and absence of purchasing power in the territories. Palestinian import agencies have been opened in Oman, and agricultural ventures in Egypt.
The problems of the Palestinian market are contrasted with Egypt's huge market potential, the ease of exporting goods to other Arab states, lower labor costs and Egyptian government incentives. Egypt is also considered less corrupt, and business owners are less exposed to government intervention and disruptions.
"It is hard to operate in the Gaza Strip now, and many factories are closing," said a Palestinian industrialist. "It is hard to import raw materials, and transferring a container from the Ashdod port through the Almuntar/Karny crossing can cost NIS 6,000. Manufacturing doesn't pay. It is sometimes necessary to wait for days at Karny before goods can be brought in."
Published by Globes [online] - www.globes.co.il - on September 11, 2002