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Viewing cable 06JERUSALEM4807, EXPOTECH 2006 DEMONSTRATES PALESTINIAN IT SECTOR

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Reference ID Created Released Classification Origin
06JERUSALEM4807 2006-11-16 14:37 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Jerusalem
VZCZCXYZ0070
OO RUEHWEB

DE RUEHJMA #4807 3201437
ZNR UUUUU ZZH ZUI RUEWCSE1476 3201429
O 161437Z NOV 06
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC0000
INFO ARAB ISRAELI COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS JERUSALEM 004807 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA/IPA FOR WILLIAMS/SHAMPAINE/STEINGER; TREASURY FOR 
SZUBIN/LOEFFLER/NUGENT/HIRSON 
 
E.O. 12958: N/A 
TAGS: ECPS ECON BEXP KWBG IS
SUBJECT: EXPOTECH 2006 DEMONSTRATES PALESTINIAN IT SECTOR 
RESILIENCE 
 
1.  (SBU)  SUMMARY:  THE THIRD ANNUAL PALESTINIAN IT SECTOR 
EXHIBITION EXPOTECH 2006 FEATURED A RECORD 49 COMPANIES, 
INCLUDING SEVEN PARTICIPATING FROM GAZA VIA A BROADBAND LINK. 
 A VARIETY OF PRODUCTS FROM U.S. IT COMPANIES WERE ON 
DISPLAY.  SECURITY-RELATED PRODUCTS WERE MORE PROMINENT THAN 
IN PAST YEARS.  DETERIORATING ECONOMIC CONDITIONS IN THE WEST 
BANK AND GAZA HAVE BUFFETED THE IT SECTOR.  ISRAELI LICENSING 
REQUIREMENTS AND LENGTHY INSPECTION PROCEDURES HAVE HAMPERED 
THE IMPORTATION OF U.S. PRODUCTS, ACCORDING TO PALESTINIAN IT 
COMPANY REPRESENTATIVES.  THE PALESTINE INFORMATION AND 
COMMUNICATIONS TECHNOLOGY INCUBATOR (PICTI), A LOCAL NGO 
ESTABLISHED WITH USAID SUPPORT, ANNOUNCED THE LAUNCH OF A 
FUND INTENDED TO PROVIDE INVESTMENT AND SEED MONEY TO 
EARLY-STAGE IT COMPANIES AND IT ENTREPRENEURS.  END SUMMARY. 
 
------------------- 
IT SECTOR EXPANDING 
------------------- 
 
2.  (SBU) EXPOTECH 2006, THE THIRD ANNUAL EXHIBITION OF 
PALESTINIAN IT COMPANIES, WAS HELD NOVEMBER 6-8 IN AL-BEIREH, 
NEAR RAMALLAH IN THE WEST BANK.  EXPOTECH 2006 WAS ORGANIZED 
BY THE PALESTINE INFORMATION TECHNOLOGY ASSOCIATION (PITA) 
AND THE PALESTINE TRADE CENTER (PALTRADE) WITH SIGNIFICANT 
FINANCIAL BACKING FROM THE PALTEL GROUP, THE MOST PROMINENT 
PALESTINIAN TELECOMMUNICATIONS COMPANY AND OWNER OF JAWWAL, 
THE SOLE OPERATING PROVIDER OF CELL PHONE SERVICE IN THE WEST 
BANK AND GAZA.  CONSOLIDATED CONTRACTORS COMPANY (CCC) AND 
ARAB PALESTINIAN INVESTMENT COMPANY (APIC), A RAMALLAH-BASED 
INVESTMENT HOUSE, ALSO HELPED FUND THE EVENT.  A RECORD 49 
COMPANIES PARTICIPATED IN THE EXHIBITION -- 13 MORE THAN LAST 
YEAR -- INCLUDING SEVEN FROM GAZA THAT PARTICIPATED VIA A 
SPECIALLY DESIGNED PAVILION IN THE MAIN EXHIBITION HALL 
OFFERING BROADBAND LINKS ALLOWING THE GAZA FIRMS TO INTERACT 
WITH FELLOW IT COMPANIES AND EXHIBITION VISITORS.  EXPOTECH 
FEATURED TECHNOLOGIES AND EQUIPMENT DEVELOPED WORLDWIDE AND 
ALSO SHOWCASED LOCALLY DEVELOPED INNOVATIONS AND SERVICES. 
 
----------------------------------- 
SALES CONTINUE DESPITE WEAK ECONOMY 
----------------------------------- 
 
3.  (SBU) THE PRODUCTS OF SEVERAL MAJOR U.S. IT COMPANIES, 
SUCH AS CISCO, HP, AND DELL WERE PROMINENTLY FEATURED. THE 
NUMBER OF BOOTHS OFFERING SECURITY EQUIPMENT AND RELATED 
SOFTWARE HADQEDLY INCREASED SINCE LAST YEARS EXHIBITION. 
 MOST OF THESE PRODUCTS WERE OF CHINESE, SOUTH KOREAN OR 
JQSE ORIGIN.  LOCAL SOFTWARE DEVELOPERS WERE WELL 
REPRESENTED, DEMONSTRATING THE ADVANCING CAPABILITIES OF THE 
PALESTINIAN IT SECTOR.  VENDORS COMMENTED THAT THE DOWNWARD 
TREND OF THE PALESTINIAN ECONOMY SINCE THE FORMATION OF THE 
HAMAS-LED GOVERNMENT IN MARCH 2006 HAS DAMPENED SALES, BUT 
PRIVATE COMPANIES, AFFLUENT INDIVIDUALS AND BANKS CONTINUE TO 
DEMAND THE LATEST TECHNOLOGY. 
 
--------------------- 
IMPORTERS FACE DELAYS 
--------------------- 
 
4.  (SBU) IMPORTERS OF U.S. PRODUCTS TOLD ECONOFFS THAT 
ISRAELI LICENSING REQUIREMENTS AND INSPECTION PROCEDURES 
SIGNIFICANTLY DELAY THE RECEIPT OF ORDERED GOODS.  ANY ITEM 
CONTAINING A MODEM, FOR EXAMPLE, HAD TO BE INSPECTED, 
RESULTING IN DELAYS OF UP TO EIGHT MONTHS, IN SOME CASES. 
(NOTE:  ACCORDING TO THE IMPORTERS, ISRAELI AUTHORITIES 
INSPECT A SAMPLE OF THE TARGETED SHIPMENT AND NOT EVERY ITEM 
IT CONTAINS.  THEY ASSERT THAT THE OFFICE THAT CONDUCTS THE 
INSPECTIONS IS OPEN ONLY ONE DAY A WEEK.  END NOTE.)  A 
PALESTINIAN IMPORTER OF MOTOROLA CELL PHONES SAID THAT IN 
SHIPMENTS SHARED WITH HIS ISRAELI COUNTERPART THE PORTION OF 
THE CARGO DESTINED FOR ISRAEL IS RELEASED IN 3-4 DAYS WHILE 
IT TAKES 3-4 MONTHS BEFORE HE SEES HIS SHARE OF THE GOODS. 
(NOTE:  ECONOFFS AND FCS JERUSALEM ARE ORGANIZING A MEETING 
WITH PALESTINIAN IT COMPANIES TO DISCUSS DIFFICULTIES THEY 
ARE EXPERIENCING WHEN IMPORTING U.S. IT PRODUCTS.  END NOTE.) 
 
 
--------------------- 
LOOKING TO THE FUTURE 
--------------------- 
 
5.  (SBU) PERSONNEL AT PICTI'S BOOTH ADVISED ECONCQEF OF A 
NEW PROJECT CALLED THE PICTI FUND INTENDED TO STIMULATE 
INVESTMENT AND PROVIDE SEED FUNDS TO EARLY STAGE TECHNOLOGY 
AND TECHNOLOGY-DRIVEN COMPANIES IN THE WEST BANK AND GAZA. 
THE FUND, A FOR-PROFIT LIMITED PARTNERSHIP, WILL INVEST IN 
 
 
THE DEVELOPMENT OF ENTREPRENEURS IN THE IT SECTOR, PROVIDING 
THEM WITH INCUBATION SERVICES, RESOURCES AND FINANCIAL 
OPPORTUNITIES.  THE TARGET SIZE OF THE FUND IS USD 5 MILLION. 
 (NOTE:  UNDER THE REVISED PALESTINIAN ASSISTANCE PACKAGE 
APPROVED JULY 2006, USAID PROVIDED USD 1.5 MILLION TO PICTI 
TO SUPPORT THE ESTABLISHMENT OF THE NEW SEED FUND.  THE USAID 
INVOLVEMENT IN THE PROGRAM ENDED SEPTEMBER 30, END NOTE.) 
PALTEL GROUP CEO ABDUL MALIK JABER DESCRIBED TO ECONOFFS 
PALTELS DECISION TO PROVIDE USD 3 MILLION TO THE PICTI FUND. 
 PALTEL WILL ALSO PROVIDE PICTI USD 150,000 ANNUALLY TO HELP 
COVER OPERATING COSTS.  JABER ADVISED THAT PLANS ARE 
CONTINUING FOR THE AWARDING OF THE FIRST PALESTINIAN 
ENTREPRENEURSHIP AWARDS, OF WHICH THERE WILL BE 12 TOTALING 
USD 250,000. 
 
6.  (SBU) A LOCAL SOFTWARE DEVELOPER OF MAPS AND MAP SOFTWARE 
CONVEYED TO ECONOFFS HIS CONCERNS ABOUT PERVASIVE 
INTELLECTUAL PROPERTY RIGHTS (IPR) VIOLATIONS IN THE WEST 
BANK AND GAZA.  HE ASSERTED THAT ONE OF HIS COMPANY'S 
SOFTWARE PACKAGES VALUED AT USD 20,000 CAN BE OBTAINED IN 
PIRATED FORM FOR A FEW DOLLARS.  HE ASSERTED THAT THE PA 
OFFERS NO PROTECTION TO LEGITIMATE SOFTWARE DEVELOPERS.  HE 
ASKED THAT THE USG, EU, WORLD BANK AND OTHER FOREIGN DONORS 
DO MORE TO ENSURE ADHERENCE TO IPR STANDARDS WHEN 
IMPLEMENTING THEIR ASSISTANCE PROGRAMS.  HE SUGGESTED THAT 
USAID CONTRACTORS AND OTHER RECIPIENTS OF USG FUNDS SHOULD BE 
REQUIRED TO ADHERE TO USG IPR REGULATIONS WHEN MAKING LOCAL 
PURCHASES.  THE SOFTWARE DEVELOPER, HOWEVER, DID NOT OFFER 
ANY SPECIFIC EXAMPLES OF IPR VIOLATIONS INVOLVING USAID OR 
ANY OTHER FOREIGN ASSISTANCE CONTACTS.  ECONOFF REPLIED THAT 
THE USG GIVES HIGH PRIORITY TO IPR CONCERNS BUT CURRENTLY 
CANNOT ENGAGE A HAMAS-LED PA GOVERNMENT ON THIS SUBJECT.  HE 
NOTED THAT USAID CONTRACTS INCLUDE CLAUSES REQUIRING 
ADHERENCE TO IPR REGULATIONS. 
 
 
WALLES