VZCZCXRO3418
RR RUEHROV
DE RUEHJM #2025 3131412
ZNR UUUUU ZZH
R 091412Z NOV 09
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC 6617
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS JERUSALEM 002025 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB AND NEA/IPA, PASS USAID FOR BORODIN 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD EAID KPAO KWBG IS
SUBJECT: "EXPOTECH" WEEK PROMOTES PALESTINIAN INFORMATION 
TECHNOLOGY SECTOR, SEEKS FOREIGN INVESTMENT 
 
¶1. (SBU) Summary:  The annual "ExpoTech Technology Week" in 
Ramallah brought together representatives from international 
and local information and communication technology firms. 
The week-long exhibition, funded in part by a $139,000 grant 
from USAID, promoted international investment in the 
Palestinian IT sector.  PA officials pledged rationalized 
market regulation, plus liberalization at the expense of the 
current telecom duopoly.  Private sector contacts called for 
greater incentives for investors, and assistance with 
continued GOI restrictions on importing IT-related goods to 
the West Bank.  While local companies report increased 
hardware sales, they said that continued growth depends on 
the easing of import restrictions.  End summary. 
 
USG Joins with Palestinian Firms to Promote IT Sector 
--------------------------------------------- -------- 
 
¶2. (U) The Palestinian Information Technology Association 
(PITA) and Palestinian Information and Technology Incubator 
(PICTI) hosted the sixth annual "ExpoTech Technology Week" in 
Ramallah from November 1-5.  This year's program was expanded 
to include a day-long conference with a video conference link 
for Gazan participants; well-attended training sessions in 
major West Bank cities hosted by Microsoft, Cisco, and 
Google; networking opportunities; and a trade show that 
attracted an estimated 33,000 attendees.  USAID contributed 
$139,000 to ExpoTech, and received prominent media coverage. 
 A ConGen Econ Officer served as moderator for a panel 
discussion on building a knowledge-based economy. 
 
¶3. (SBU) Prime Minister Salam Fayyad kicked off the week-long 
event with a speech emphasizing the growth potential of the 
IT sector, noting that 49 percent of Palestinian families own 
computers, Internet penetration is nearly 30 percent -- much 
higher than the 10 percent average in the Middle East -- and 
IT currently ranks as the third-largest sector in the 
Palestinian economy.  Note: While accurate, the relative size 
of the sector is misleading, given that it includes PalTel 
and its subsidiaries.  Contacts estimate that, without 
PalTel, IT companies contribute 2-3 percent of GDP.  End 
Note.  Minister of Telecom Abudaka stressed the importance of 
market liberalization, adding that prices must come down by 
January 1 or sole operators "PalTel and Wataniya would get 
the shock of their lives."  He also pledged that a fully 
independent regulator would be set up before the end of the 
year, a project that is already underway with USAID 
assistance. 
 
Import Restrictions Continue to Plague the Sector 
--------------------------------------------- ---- 
 
¶4. (SBU) The Consul General toured convention exhibits on 
November 4, meeting local IT executives, including 
distributors of U.S. products.  Private sector 
representatives told the Consul General that consumer 
spending has sharply increased sales (one contact reported he 
expects to double his sales in 2009 to $10 million) but 
generally noted a continued -- if not increased -- difficulty 
in importing IT products to the West Bank.  The permit 
procedure continued to lack transparency, relying on personal 
and constant intervention with the GOI, a hardware 
distributor said.  He added that "this was possible when I 
had a few shipments coming in a month, but with my increase 
in sales, I no longer have the time to go and have coffee at 
Beit El every day."  Note: Beit El, an Israeli settlement in 
the West Bank near Ramallah, is the location of the Israeli 
Civil Administration Offices.  End Note. 
RUBINSTEIN