Doing Business in the West Bank
Yes, you can do business in the West Bank! Many American firms have established agencies and distributorships, and Palestinian consumers have a strong preference for a wide variety of U.S. goods and services.
Many American companies have reoriented their marketing efforts to acknowledge the Palestinian market as culturally, economically, and commercially distinct from the Israeli market. The U.S. Commercial Service in Jerusalem encourages American exporters wishing to market their goods in the West Bank to use local Palestinian agents and distributors. Using Israeli agents for Palestinian markets does not utilize local, Palestinian market expertise, and does not allow U.S. firms to maximize their sales exposure to the local market. We can help you find well qualified Palestinian agents and distributors for your products.
Market Overview
- In 2008 GDP reached $4.80 billion an overall growth rate of 6% over 2007.
- In 2008 total Palestinian imports of goods and services were $3.5 billion, and exports were $558 million. West Bank and Gaza imports come mostly from Israel, Europe, Turkey, Egypt, Jordan and China.
- The Palestinian market relies heavily on Israel as a trading partner; it accounts to 80% of total Palestinian imports and 90% of Palestinian exports go to Israel.
- In 2009 imports from the U.S. were estimated at $150 million.
- The information technology sector is a promising sector in Palestinian markets, as are the cellular and landlines telephone services. Palestinian stone and marble exports have remained strong, in particular to the United States. The handicraft market has begun to expand into export markets for a range of products.
- International donor investment in basic and social infrastructure in WB/G will continue to present opportunities for U.S. contractors. From 1994 UNTIL 2010, the U.S. Agency for International Development (USAID) has provided more than $2.9 billion in economic assistance to Palestinians living in the West Bank and Gaza.
Market Challenges
- The second Intifada that began in the fall of 2000 has significantly damaged the economic and commercial environment in the West Bank and Gaza. Movement of goods into and out of Palestinian markets has been heavily restricted.
- The June 2007 takeover of Gaza by Hamas has resulted in the closure of borders with Israel and the cessation of trade between Gaza and the outside world including West Bank, except for goods that are classified as humanitarian. Recently however more goods are going into Gaza from Israel including new cars.
- Commercial law enforcement differs between West Bank and Gaza. In West Bank in some cases Jordanian and Ottoman laws apply, while in Gaza it is Egyptian or British Mandate Laws.
- WB/G remains highly dependent on Israeli supplies, and export opportunities. All Palestinian exports must go through Israel or Israeli-controlled checkpoints.
- Per capita GDP has fallen from a high of $1,612 in 1999 to $1,340 in 2008.
- The falling exchange rate of the U.S. Dollar has reduced the real value of remittances from abroad; current exchange rate for $1 is NIS 3.60 versus NIS 4.30 two years ago. However this has made American made products more competitive.
- Israeli Standards Institution (ISI) adopts mostly European Standards and can delay shipments into Palestinian markets by requiring onerous standards testing on products entering the West Bank and Gaza.
Market Opportunities
- Infrastructure development, both donor and privately financed is on the rise.
- Projected major projects include electric power generation plant and a national electricity distribution company in the West Bank; introduction of the third mobile operator in 2013; expansion of telecommunications infrastructure equipment and services; upgrading and expanding of sanitation, waste disposal, and water services; upgrading of WB/G roads.
- Expected future demand for private housing construction for middle and lower middle-income families. There is a growing trend, toward building large commercial and multi story residential buildings. One new town project “Rawabi” is under construction North of Ramallah, while another commercial and residential project is El Ersal also in Ramallah
- Expansion can be expected in processed foods, olive oil, pharmaceuticals, textiles, hardware, wood and cane furniture, plastics, and house wares manufacturing. Construction inputs such as cement and steel products also could see heavier demand.
- Franchising and distributorships are popular with the best prospects in fast food, computers and electronics.
- Expanded imports of healthcare products, such as medical equipment and disposables due to increased international donor support to this sector.
