VZCZCXYZ0001
RR RUEHWEB

DE RUEHJM #2244/01 3441538
ZNR UUUUU ZZH
R 101538Z DEC 09
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC 6950
INFO RUEHAM/AMEMBASSY AMMAN 8716
RUEHTV/AMEMBASSY TEL AVIV 5055
RUEHEG/AMEMBASSY CAIRO 5314

UNCLAS JERUSALEM 002244 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/IPA AND EEB, NSC FOR KUMAR, STATE PASS TDA 
FOR KRESS/BATANEH, USAID FOR BORODIN 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV KPAL KWBG IS
SUBJECT: NABLUS AREA BUSINESSES: CONTRAST BETWEEN CONSUMER 
SPENDING AND EXPORT-ORIENTED GROWTH 
 
REF: JERUSALEM 1765 
 
¶1. (SBU) Summary.  Private sector contacts report 
consumer-fueled economic improvement in Nablus resulting from 
movement and access easings, new business from visiting Arab 
Israelis, and the continued payment of PA salaries.  However, 
stone and marble companies operating in the area continue to 
struggle with Israeli restrictions in Area C, equipment 
seizures, the costly and time consuming back to back process 
for exports, and disappearing ties with Israeli middlemen who 
used to purchase their stone.  End Summary. 
 
Jamma'in Quarries in Area C Shut Down, Equipment Seized 
--------------------------------------------- ---------- 
 
¶2. (SBU) EconOffs visited Nablus area businesses on December 
9 to discuss economic conditions and business trends in the 
wake of movement and access easings over the past year. 
 
¶3. (SBU) The small town of Jamma'in depends on and is 
surrounded by quarries, with some houses perched on the very 
edge of 50 foot deep holes, but the town's 80 quarrying 
operations are prohibited by the GOI from expanding their 
operations to the surrounding 500 dunnums (about 125 acres) 
of Area C land.  Despite these restrictions, about 20 small 
companies had been working quarries in the area since the 
mid-1990s, and have recently faced equipment seizures and 
fines of up to NIS 24,000 (about USD 6,300) from the IDF. 
After the latest seizure of several pieces of quarrying 
equipment in November, the quarries that had been operating 
in Area C shut down (one-quarter of Jamma'in's overall 
production), putting over 150 people out of work. 
 
¶4. (SBU) Overall, Jamma'in's quarries employ 1500 people 
(many from Hebron, Nablus, Ramallah, and the surrounding 
villages), and residents estimate that income from the 
quarries support up to 30,000 people.  The local stone union 
estimates that roughly 70% of its stone is sold to Israelis, 
who then re-sell it to Israelis and international buyers, and 
30% is exported to Jordan.  Business is markedly worse this 
year than last, according to Jihad Fatallah, head of the 
Jamma'in Union of Stone and Marble, both because of the Area 
C restrictions and due to increasing difficulties 
establishing ties with Israeli middlemen as a result of the 
tighter policing of Israelis entering Area A with commercial 
vehicles.  Like most of our private sector contacts, Fatallah 
said that the back to back process at crossings between the 
West Bank and Israel (Jamma'in uses Sha'ar Ephraim) adds 
considerable cost, breakage, and time to the export process. 
 
A "Pointless" Permit Process 
---------------------------- 
 
¶5. (SBU) The Israeli permit process for Area C quarrying 
requires the applicant to submit maps and details about the 
proposed quarrying operation to the Coordinator of Government 
Affairs in the Territories (COGAT) office in Beit El and pay 
a fee of approximately NIS 1000 (USD 265), according to the 
Jamma'in Union of Stone and Marble.  While COGAT tells 
applicants to expect a response on applications in six 
months, quarry operators in Jamma'in, like their colleagues 
from Bethlehem (reftel), call the effort "pointless" and say 
they have never received a response on any application. 
Ayman Majabi applied in 1995 for a permit to work his quarry 
in Area C, but never received a response.  He reapplied this 
month, following his equipment seizure, but said he expects 
the same result. 
 
Nablus Economy Responds to Arab Israeli Shoppers 
--------------------------------------------- --- 
 
¶6. (SBU) Separately, Nablus businessman and Anabtawi Group 
Chairman Ziad Anabtawi said business is up from 5 to 15% this 
year throughout his group of companies, which include a 
distributor of imported consumer products, a distributor and 
bottler of vegetable oils imported from the U.S., a 
supermarket, and a Jerusalem-based logistics company. 
Anabtawi said business has also markedly improved within 
Nablus - particularly over the November Eid holiday - due to 
the increased numbers of Arab Israelis now able to enter the 
city, the payment of PA salaries, and the movement and access 
easings for local residents.  He pointed to the small 
surrounding villages that had commercially re-oriented 
towards Ramallah as a result of the previous restrictions 
around Nablus, and said they are now returning to Nablus for 
their business needs. 
 
 
¶7. (SBU) Despite these improvements, Anabtawi noted that the 
Nablus economy still lags 25% behind where it was in 2000. 
In order to capitalize on the security gains and economic 
improvement, he emphasized the need to attract the Nabulsis 
who had left for Ramallah and abroad during the difficult 
years following the Intifada, as well as investment and 
businesses.  Job opportunities, improvements in the 
educational system, and tax and other business incentives 
would all help. 
 
RUBINSTEIN