Taybeh Beer's owner says the West Bank brewery was set up
to boost the Palestinian economy and national pride

For some, knocking back a few beers may be the only way to cope with the gloom surrounding the Palestinian economy, beset by Israeli controls and bureaucracy.

But by doing so they can now bolster the income of the territories, thanks to the success of one Palestinan business - Taybeh Beer.

Near Ramallah in the village of Taybeh, which means "delicious" in Arabic, the first and only Palestinian micro-brewery was established by Nadim Khoury in 1995.

Khoury returned from the US with his family to start the business and invest in the Palestinian economy.

"Our product encourages the economy of Palestine and tourism because, when tourists come to Palestine, they want to drink the local beer," Khoury told Al Jazeera.

Nationalistic product

"Before, we didn't have a local beer and now we are proudly promoting our country's product, which did not exist in the past, as well as nationalistic feeling," the 49-year-old said.

"Because we have been under occupation for so many years, we have lost that feeling."

It is like brewing beer at the end of nowhere

But in the Palestinian territories, business success means survival rather than profits.

Permits are required for goods and services going in and out of the territory and, with about 600 Israeli roadblocks in the West Bank alone, Palestinian businesses face increased costs and constant delays.

Hold-ups at Israeli ports can add thousands of dollars to import and export costs.

The Israelis say they impose such measures for "security reasons".

Less beer per shekel

The extra charges will ensure a 10 to 15 per cent price increase in 2008 for Khoury's four types of beer.

"It costs us more to transport goods from our village to the port in Israel, than the shipping from the port in Israel to Japan," Khoury said.

"We face a lot of problems getting raw materials and getting to distribution networks in Israel because of the security wall and closures.

Israeli checkpoints number into the
hundreds in the West Bank [EPA]

"It is like brewing beer at the end of nowhere. We don't have our own borders, port or airport," Khoury said.

The World Bank estimates that it takes an average 93 days to start a business in Palestine, compared to 34 days in Israel.

Taybeh Beer currently produces about 60 per cent of its output for the local market, 30 per cent for Israel and 10 per cent for export to Japan.

It is the first Palestinian firm to operate a franchise, with a brewery producing its beer in Germany.

But the firm is fortunate.

Its premises are in a Christian village away from Jewish settlements and refugee camps troubled by Israeli army incursions.

Taybeh is close to a bypass created for local Jewish settlements, meaning its goods can be transported to Jerusalem within half-an-hour and to the port of Ashdod on Israel's Mediterranean coast in an hour, pending security checks.

Khoury's family-run business employs staff who live in the village, limiting the effect of movement restrictions in the West Bank. This is a privilege not all local firms can ascribe to.

Palestinian companies in industrial areas in Ramallah or East Jerusalem have more roadblocks to navigate, hampering their access to local markets.

The number of roadblocks was increased by Israel after the start of the second intifada in 2000 and have forced many Palestinian firms to close.

Rising unemployment

The Palestinian economy has been propped up by international aid of at least $1.14 billion since 2004, but the Gaza Strip has been without assistance since Hamas took power there in March 2006.

Official unemployment rose from 15 to 18 per cent in the West Bank and eight to 32 per cent in the Gaza Strip in the third quarter of 2007, according to the Palestinian Central Bureau of Statistics.

Omar Sha'ban, a freelance economic consultant and head of PalThink, a think-tank, is based in Gaza and believes the situation to be much worse.

The Palestinian economy is a small business economy and small businesses are not strong enough to overcome all of these obstacles

"We are talking 80 per cent unemployment in Gaza," Sha'ban said.

"The West Bank suffers from several problems. The separation wall, which divided the Palestinians, and roadblocks separating villages from each other.

"Trade is crucial to the West Bank, and it is very difficult for small villages behind the security wall to trade with big cities.

"The Palestinian economy is a small business economy and small businesses are not strong enough to overcome all of these obstacles."

Sha'ban told Al Jazeera that the agricultural sector in the Gaza Strip is on the verge of collapse and education has dwindled.

The business export markets to Europe, Egypt and Morocco, built up over the past 20 years are being lost, as Israel prevents goods from leaving.

Tourism is virtually non-existent in the Gaza Strip, despite the 12 hotels and 420 rooms available.

In the mid-1990s, thousands of tourists would visit the Gaza Strip every month.

Agri-business in the West Bank, particularly olive oil, has been damaged by Israeli settlement building and restrictions on movement.

"In 1994, the GDP [Gross Domestic Product] of Palestine was $2.5 billion. In 2000 it reached $6 billion. The annual growth from 1997 to 1999 was eight per cent," Sha'ban said.

"This is very important because, in Gaza, the unemployment rate in 1999 was only ten per cent, so there was no extremism there.

"From 2000 to 2002 the GDP declined by 39 per cent. In 2004 and 2005 there was an estimated four per cent growth, but this was lost in 2006 and 2007.

"We now need another ten years to compensate for what we lost in the intifada," Sha'ban said.

"However, the West Bank situation is better than Gaza's, because they have raw materials, they are closer to Israel, and they can still trade with Israel."

'Enough is enough'

With fresh talks between Israeli and Arab leaders meeting in Annapolis, in the US, and Tony Blair, the Western quartet's envoy, visiting the Middle East this week, there may be some hope for initiatives to stimulate Palestinian economic activity.

Tony Blair (l) has put forward economic
boosting measures [EPA]

Blair has proposed a sewage project in the northern Gaza Strip, and, in the West Bank, increased tourist access to Bethlehem, a trade corridor in the town of Jerico and an industrial zone.

"What we need from Israel on the political level is our freedom to move and to utilise our entrepreneurial spirit, and our own state," Sha'ban said.

"No country in the world can make any development if they don't offer freedom for the businessman and the community.

"The Israelis can give us some technology. They have good business in the international market, very developed sectors in medicine and other service sectors.

"We can exchange some ideas with them. We are very good in the agricultural software, we have very educated people here in Palestine.

"So there is high possibility for equal partnership when the occupation subsides."

For the small businessman, the Annapolis talks bring some hope of relief from business problems, issues intertwined with basic daily needs.

"We hope it will bring some 'enough is enough' of fighting and arguing. Every time we argue we get into more problems," Khoury said.

"Israel has to open the door. People have to work and make money and feed their family, live in peace and live a normal life."

Source: Al Jazeera