About the Author: Jennifer Butte-Dahl serves in the Office of Deputy Secretary of State Jacob J. Lew and provides her perspective the Deputy Secretary's recent visits to Jerusalem, Ramallah, and Tel Aviv.
I recently accompanied my boss, Deputy Secretary of State Jacob Lew, on a ten-day tour through the Middle East. Our trip began with a focus on strengthening long-standing relationships throughout the region. It ended with a focus on the future, as we engaged with Israeli and Palestinian officials, entrepreneurs, and innovators in Jerusalem, Ramallah, and Tel Aviv.
Our meetings began in the West Bank, where the economy is growing at a rate of 7%, up from approximately 4% in 2008 (according to the IMF). Over lunch in Ramallah, we discussed the achievements as well as the challenges with an impressive group of Palestinian businesspeople from the IT, banking, tourism, and manufacturing sectors -- all building successful ventures in the face of challenging odds. They spoke of progress: 46% growth in the number of IT companies over the last 3 years (according to the Palestinian Central Bureau of Statistics); a soon-to-launch $500 million mortgage facility that will expand access to affordable housing; and multiple venture capital funds in the works aimed at small- to medium-sized enterprises. Accordingly, Palestinian Authority officials are planning to hold an investment conference in Bethlehem in June 2010 to court the Palestinian Diaspora and Arab investors. All good news, though it was clear that Palestinian manufacturers still spend a significant amount of time working to bring in essential inputs and find creative ways to move goods to market. In a subsequent meeting, Prime Minister Fayyad predicted double-digit growth if restrictions on access and movement can be lifted further. U.S. General Consulate: Jerusalem
A few days later, after a series of fruitful meetings with Israeli officials, we visited the Better Place electric vehicle demonstration center in Tel Aviv (view video) and met with a group of inspiring Israeli high-tech and innovation personalities active in business, finance, government, media, and academia. Israel leads the world in start-ups and patent filings per capita, and it has more NASDAQ-listed companies than any other country in the world except the U.S. and Canada. It is also home to myriad entrepreneurs, scientists, engineers, and venture capitalists on the cutting edge of innovations in technology and renewable energies. Over dinner, we discussed some of the elements behind the country's remarkable success in the high-tech sector: uninhibited risk-taking, no fear of failure, a team-oriented mindset rather than a hierarchical one, strong government support, and access to international venture capital. All serve as building blocks, resulting in an extremely impressive array of products and ideas.
Throughout our visit, we were encouraged by discussion -- both in Tel Aviv and Ramallah -- of U.S.-Israeli-Palestinian private sector cooperation. For example, Israel hosts Cisco Systems' second largest design center outside of the U.S. Recently, Cisco outsourced five R&D projects to three Palestinian companies, which, in a very practical way, builds relationships and generates synergies between Israeli and Palestinian engineers.
Both Israeli and Palestinian entrepreneurs have a shared history of working under challenging conditions and achieving impressive results. As the United States continues to engage on a diplomatic level to bring about a two-state solution and comprehensive peace in the region, Israeli and Palestinian businesspeople are making their own progress in tangible ways, at times far beneath the headlines. Although there is a long way to go, they are working hard to create a brighter future, and on this trip we saw some of the real fruits of that labor.