A Palestinian farmer carries boxes of tomatoes from a greenhouse before they are exported to Israel. Khalil Hamra / AP Photo
A Palestinian farmer carries boxes of tomatoes from a greenhouse before they are exported to Israel. Khalil Hamra / AP Photo
A Palestinian farmer carries boxes of tomatoes from a greenhouse before they are exported to Israel. Khalil Hamra / AP Photo
A Palestinian farmer carries boxes of tomatoes from a greenhouse before they are exported to Israel. Khalil Hamra / AP Photo

Palestine can be built, one business at a time


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I have written before of some of my Palestinian American heroes, including men like Ibrahim Abu Lughod and Zahi Khouri. I want to add my friend Sam Bahour to the list.

Two and a half decades ago, Ibrahim was a respected tenured professor at Northwestern University and Zahi was chairman of the board of a major Park Avenue-based investment group. Sam, the youngest of the three, was a successful small businessman in Youngstown, Ohio.

When the Oslo Agreements were signed 22 years ago, these three made tough and courageous choices. Realising that the struggle to build a new Palestinian reality was beckoning, they moved to the parts of Palestine that were newly assigned to the fledging Palestinian Authority to become a part of the building process.

Ibrahim, who had been an important mentor to me in my formative years, moved to Birzeit University and dedicated himself to mentoring a new generation of Palestinian youth. Ibrahim passed away in 2001.

Zahi moved to Jerusalem where he waged a difficult but ultimately victorious struggle to win the right to operate the Coca -Cola franchise in the Palestinian territories. To do this he had to wrest control of the franchise from an Israeli owner who wanted to maintain control over both Israel and the occupied Palestinian lands.

For his part, Sam made a seamless transition using both his business and political acumen to contribute to setting up the first Palestinian telecommunications company, Paltel, and the first modern Palestinian shopping centre, Plaza. Sam focuses his organising around key issues of importance to the Palestinian American community. For many years now, Sam has been the central resource for information on the difficulties Israel has created for Palestinian Americans travelling to and working in the Palestinian Authority areas. When the then senator Barack Obama made his first visit to the West Bank in 2006, Sam joined the Palestinian business community to brief him about the burdens imposed on them by the Israeli authorities. On his return to the US, Mr Obama told me how much he had learnt from the group.

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Read more about Palestine:

Settlements sabotaged talks, not Palestinians

Non-violent resistance is Palestine's most powerful weapon

The real criminal is the occupation

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Now, Sam Bahour has launched a new and important venture. Working with a number of other Palestinian American business leaders and an impressive group of American business executives, they have launched Americans for a Vibrant Palestinian Economy (AVPE).

I met with the group a short while back and recognised that driving their efforts were the same convictions that motivated former US vice president Al Gore’s Builders for Peace project, with which I had been associated two decades ago.

First and foremost, there is the recognition that building the private sector, especially through the creation of small and medium-sized enterprises, is the key to job creation and economic growth and is also central to democracy. Another important consideration is that these efforts cannot take a back seat to political developments.

They also realise that the Israeli occupation has placed crippling impediments on the Palestinian business community, leading to distortions in the Palestinian economy. Palestinians can’t freely import raw materials or export their products. Their access to external and even internal markets is limited by the Israeli occupation, so businesses can’t easily grow or benefit from economies of scale. As a result, the Palestinian Authority has become the single largest employer and has, itself, become dependent on foreign financial support.

And finally, they understand that despite these difficulties, the enterprising Palestinian private sector has not only survived, but has continued to play a central role in the economic life of Palestine. The private sector accounts for almost two-thirds of all employment in the territories.

The bottom line is that the private sector is essential, resilient and dynamic. And because it is surviving against amazing odds, it deserves support.

This important truth was never understood by the Clinton administration’s “peace team”. Instead of seeing business development as an essential parallel track to the “peace process”, they deemed it unworthy of their attention.

The Palestinian private sector was left to fend for itself – until now. AVPE is determined to change this negative dynamic by “linking American businesses to Palestinian partners in an effort to bolster the Palestinian economy’s ability to withstand continued Israeli constraints on growth”.

The AVPE effort is not a substitute for Palestinian independence. It recognises that only with independence can the full potential of the Palestinian economy be realised. At the same time, AVPE knows that creating jobs, finding markets, and growing the private sector can’t be set aside for another 20 years.

James Zogby is the president of the Arab American Institute

On Twitter: @aaiusa

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Dhadak

Director: Shashank Khaitan

Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana

Stars: 3