Burgeoning IT sector aims to reverse Palestinian economic rot

Wed Apr 17, 2013 10:08am EDT
 
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By Noah Browning

NABLUS, West Bank (Reuters) - Nestled in a basin in the northern West Bank, the city of Nablus was for millennia a Palestinian cultural and commercial hub, attracting traders to its souk in the heart of the old town.

But Israel's occupation of the West Bank, and local policy paralysis, have since isolated the Palestinian economy from global markets and pushed unemployment up to nearly 25 percent.

Fledgling Palestinian high-tech firms hope they can now help revitalize the economy, making the West Bank more resistant to Israeli controls on land and the movement of goods and people and less dependent on fickle foreign aid flows, which are blighting the public sector.

"We're far, far away from being Silicon Valley," conceded Husam Dweikat, general manager of Isra Software & Computer Co., an e-commerce firm with 35 employees based near the old city.

"Still, we can become a sector that transforms the future of the Palestinian economy, despite the fact the Israeli occupation and our government have deprived us of the right infrastructure, skills and exposure," Dweikat said.

The information and communications technology (ICT) sector, which includes telecommunications, contributed 6.1 percent of Palestinian gross domestic product by 2011, a more than seven-fold increase since 2008.

Relatively high rates of computer literacy and English language skills compared to Arab neighbors offer advantages.

Paradoxically, proximity to Israel is also a boon. A powerhouse of global ICT, Israel provides Palestinian IT companies with outsourcing work from multinational firms that have subsidiaries in Netanya and Tel Aviv, just 20 kilometers from the West Bank.   Continued...

 
An employee stands in front of a file cabinet at Isra Software & Computer Co., an e-commerce firm in the West Bank city of Nablus April 8, 2013. REUTERS/Mohamad Torokman