Investing in Gaza - New York Times

Investing in Gaza - New York TimesJuly 6, 2005
Investing in Gaza
By THOMAS L. FRIEDMAN

GAZA CITY

I was having coffee at a Gaza hotel on Saturday with a group of Palestinian and Egyptian businessmen when one of the Palestinians, half-serious, half-joking, gave me a stock tip: "Nablus." The Palestine Securities Exchange, located in the West Bank town of Nablus, has skyrocketed since the Israeli-Palestinian cease-fire went into effect in February. And check out Paltel, the Palestinian phone company. It's almost as hot as Google. You don't have a broker in Nablus? Sounds a little risky? No problem. Check out the Tel Aviv Stock Exchange. It's also soared since the cease-fire and Israel's decision to withdraw from Gaza.

The simultaneous boomlets in the Israeli and Palestinian stock markets highlight one of the most important political facts I encountered traveling in Israel, Gaza and the West Bank: a groundswell of relief that both sides have found a way, even temporarily, to stop the insane cycle of Palestinian suicide bombing and Israeli retaliations that totally distorted daily life here. Quite simply, Israelis and Palestinians are really enjoying this calm after four years of mutually assured destruction. Palestinian restaurants in Ramallah are full again. Hotel owners in Gaza are repainting their lobbies. Israel is again awash in tourists.

No leader or party can ignore how much people want this calm to hold - even Hamas. As Ghazi Hamad, editor of the Hamas newspaper Al Risalat, said to me, "One reason Hamas agreed to the cease-fire was to give people a chance to breathe and rest."

The other hugely important fact is that Israel is going to begin withdrawing from the Gaza Strip in mid-August. In a courageous move to shrink Israeli control of Palestinians, Prime Minister Ariel Sharon is risking his life, and defying all the schemers and backstabbers in his party trying to topple him, to unilaterally uproot the Jewish settlers in Gaza.

This pending withdrawal and the eruption of a pent-up desire for normalcy among both Israelis and Palestinians together form the foundation for rebuilding the crumbled peace process. That's the good news. The bad news is that although this Israeli withdrawal is unilateral, for it to provide the peace and prosperity that both sides want from it requires a series of complicated agreements about how Gaza will relate to Israel and the rest of the world. Many key details are still not fully baked - at all.

Just a few of the unresolved issues are: Who will control the border area between Gaza and Egypt to prevent arms, terrorists and illicit goods from coming in? What will be Gaza's legal status? Will the U.N. confirm the Israeli withdrawal from Gaza, as it did from Lebanon, creating an internationally recognized border that will also constitute what a Haaretz essayist, Ari Shavit, calls "an invisible wall of international legitimacy"? (Even terrorists today are deterred by the legality of the Israel-Lebanon border.) Who will control the customs and security at Gaza's airport and seaport? How will trucks carrying goods from Gaza to Israel be inspected? Where do we go next?

The answer to these questions will determine whether Gaza will be really open to the world, and that will determine whether it is a platform for a real Palestinian state or a big prison.

One reason these issues have not been resolved is because Mr. Sharon has not resolved them in his own mind. He had the instinct to withdraw. It is a good one. But it is unclear where he wants to go with it.

Crucial details are also uncooked because Mahmoud Abbas, the Palestinian president, while firm in his resolve to end the violence, has been very weak so far. He has not confronted the corrupt and feckless old guard that Yasir Arafat left behind. He has not brought in the young generation. And he has not put his security forces in order. I spent a day in Gaza and did not see one Palestinian policeman, but I saw green Hamas flags everywhere.

Finally, if this Gaza withdrawal is going to happen in a way that lays the foundation for a wider settlement, which it can, it will in the end require a U.S. broker, guarantor and arm-twister - at the highest level.

So far, Secretary of State Condoleezza Rice has just breezed in and out. Bad call. Not only will she not escape failure, but she is also missing how emotionally important and helpful a high-level U.S. embrace of the Israeli majority's desire to get out of Gaza would be right now. Also, helping to knit together all the unresolved issues would not only bring off the withdrawal in the right way, but would also bolster America's standing in this region at a key time.

God created American secretaries of state for this kind of moment.