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Palestinian Market Briefs

Energy (Oil & Gas Electrical Power)

Energy (Oil & Gas Electrical Power) Three electricity distribution companies operate in the West Bank: the Jerusalem District Electric Company (JDECO) that serves East Jerusalem, Jericho, Ramallah and Bethlehem; the Northern Electricity Distribution Company (NEDCO) operating in the northern West Bank; and the Southern Electric Co. (SELCO) serving the southern areas. The three companies purchase 95% of the needed electricity from the Israel Electric Corporation (IEC), which they transmit over a grid that is currently owned by IEC. The remaining 5% of electric power used in the West Bank comes from Jordan. In Gaza, the Palestine Electric Company (PEC) operates a power station, which currently generates 70MW covering 30% of the 240 MW demand. Egypt supplies Gaza with 20 MW and Israel supplies the remaining 150 MW.

The electricity systems in the West Bank require substantial upgrading and expansion to meet current demand. Over the next few years, infrastructure development, including upgrading of the electricity network and establishing a national electricity distribution company in the West Bank, will be a major growth sector of the Palestinian economy. Also, another opportunity exists for establishing a solar energy generation plant in the West Bank.

The West Bank and Gaza, like other developing countries, depend on oil as the main source of energy. Palestinians import all their petroleum products from Israel. Prices are high due to heavy taxation. Several years ago, natural gas was discovered off the Gaza coast. British Gas holds a license to explore the gas fields and the company has been involved in negotiations to secure a supply agreement with Israel, the main potential customer for the gas. Once an agreement is reached and the infrastructure to transport the gas is developed, the Gaza power station will begin to operate on natural gas. Future demand for gas is estimated at 1.1 BCM/pa.

For more information, please contact Assad Barsoum directly at Tel: 972-2-625-4742, Fax: 972-2-623-5132, or E-mail: Assad.Barsoum@trade.gov

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Safety and Security Equipment and Services

Safety and Security Equipment and Services The West Bank and Gaza (WB/G) is home to approximately 4.2 million Palestinian and has a population growth estimated at about 3.6%. Despite ongoing political conditions, the influence of Palestinians familiar with American culture opens the door to numerous export opportunities for American companies in establishing agents, distributors, and partners.

The market for safety and security equipment in the WB/G is estimated at $2 million and is dominated by imports coming from Taiwan, U.K., France, and the United States. The market for such equipment has shrunk sharply in recent years due to the outbreak of the Intifada in October 2000. However, as the political conditions improve in the short-term, the demand for security equipment will grow considerably.

There are no restrictions on importing safety and security equipment into the WB/G and the Palestinian Authority is beginning to develop a formal tendering and bid process for government contracts. However, the WB/G has no indigenous ports or freight-handling airports and all goods must transit Israeli ports. The Palestinian Ministry of Interior (the Palestinian Police in particular) is the main end user of security equipment followed by banks, hotels, big companies, and foreign representative offices. Good export opportunities exist for CCTV, ID systems, data cards, surveillance systems, fire alarms, sirens, burglar alarms, metal detectors, and access control.

For further information about the Palestinian market for safety & security equipment, please contact Assad Barsoum directly at Tel: 972-2-625-4742, Fax: 972-2-623-5132, or E-mail: Assad.Barsoum@trade.gov

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Information & Communications Technologies

The Palestinian Information and Communication Technology (ICT) sector employs around 4,500 individuals in 300 companies in the West Bank and Gaza. All types of ICT companies exist including: computer hardware and office equipment importers, software development houses, business consulting services, Internet Service Providers, and telecommunication companies. In 2015, total investment in the sector was estimated at $700 million and the sector contributed 7% of GDP. With the development of the Palestinian ICT sector, the demand for computers and peripherals, telecommunication equipment, mobile handsets, and web designing services is growing.

The telecommunications sector was privatized in 1997 with the establishment of Paltel- the Palestine Telecommunications Company as the fixed line operator in the West Bank and Gaza. In 1998, Jawwal was established as the first Palestinian cellular company. In 2009, Wataniya Mobile entered the market as the second mobile operator in the West Bank only. Also, a number of VOIP and broadband companies have recently entered the West Bank. Currently, Paltel has 406,000 fixed line subscribers. Jawwal has 2.85 million mobile subscribers and Wataniya Mobile has 700,000.

Internet serves as an important communication tool within the West Bank and Gaza and with the outside world. Today, an estimated 2 million people use the Internet; representing approximately 48% of the population. There are 15 main ISPs in the West Bank and Gaza who have around 275,000 users. Most of Palestinians use the Internet for knowledge, research, studying, business-to-business activities, and entertainment.

In 2015, 63% of Palestinians owned a computer. Most of the computer hardware companies import directly from international vendors. Exports are limited to software, research and development, and outsourcing services. Some software companies have outsourcing and developing projects for regional and international companies.

The Palestinian ICT sector is represented by PITA, the Palestinian IT Association of Companies; a membership-based non-for-profit organization. With its 150 members, PITA has been very active in representing the interests of its members, in developing the Palestinian ICT sector, and in increasing the partnership between the public and private sectors.

For additional information on the Palestinian market for information and communication technology, please contact Assad Barsoum directly at phone: 972-2-625-4742, fax: 972-2-623-5132 or e-mail: Assad.Barsoum@.trade.gov

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Educational Services

Educational Services Summary Palestinian students represent a distinct opportunity for American suppliers of post-secondary educational services. In 2003, more than 7,000 Palestinian students in the West Bank and Gaza requested information about studying in the United States. In 2002, 38,411 Palestinian students graduated from 554 high schools.

Student Demographics 1. The West Bank and Gaza (WB/G) have a population of around 4 million and boast one of the highest per capita rates of university graduates in the Arab world. Palestinians have a long-standing tradition of spending generously on higher education, regarded as an asset. 38,411 students graduated from WB/G high schools in 2002. About 18,000 enrolled in local institutions for advanced studies. There are ten universities and twenty community colleges in WB/G. Enrollment in these schools reached 89,668 students in 2002. The Open University accounts for 29,845 students. In 1999, revenues of local universities and community colleges reached $45.1 million. During 2003, 7,235 Palestinians requested information from AMIDEAST and the U.S. Consulate Jerusalem about studying in the United States.

Opportunities for American Providers of Higher Education Services 2. There is an excellent niche opportunity for American universities, colleges and other educational organizations to capture a larger part of the Palestinian higher education services market. The opportunity is greatest in the Ramallah, Bethlehem and Jerusalem areas, where there are many private schools that graduate students with high English proficiency, prime candidates to continue higher education in the United States. Family incomes in these areas are the highest in the West Bank and Gaza (WB/G).

Market Background and Characteristics 3. Until local universities were established in WB/G in the early 1970’s, Palestinian students enrolled at universities in the United States, Lebanon, the U.K., Jordan and Eastern Europe. The early university graduates established themselves in the job markets in the Arab world, particularly in the Gulf States, since the early sixties and became role models for Palestinian high school graduates. In the past ten years, however, Jordan has become the primary choice for a large number of Palestinian students because of its proximity and the proliferation of Jordanian private universities. Tuition fees at these universities are high, comparable to, and in some cases higher than, those at some American universities.

U.S. Special Scholarship Programs 4. The vast majority of Palestinian undergraduate students who go to study in the United States pay their own way. However, several graduate and postgraduate scholarship programs are available to Palestinians. They include the Fulbright Scholarship Program (FSP), the Presidential Scholarship Fund (PSF) and the Ford Foundation’s International Fellowships Program (FFIFP).

5. AMIDEAST, an American education NGO based in Ramallah, runs the Fulbright Scholarship Program (FSP) and the Ford Foundation’s International Fellowship Program (FFIFP) programs. The Presidential Scholarship Fund (PSF) is another relevant program, funded by USAID that provides scholarships to Palestinian graduate students. The (PSF) is managed by the Academy for Educational Development (AED), which has a contract from USAID to run the program through 2007. The most active program is the Fulbright Scholarship Program, which has been running in WB/G since 1970.

Preferred Specializations 6. Palestinian undergraduate students select a wide range of specializations, but the greatest demand is for business administration, computer science and technology, pharmacology and the various engineering fields. Graduate students’ preferences also cover a wide range of majors, mainly business administration, chemistry, education and civil engineering.

Level of Interest in American Education 7. Palestinians in WB/G are interested in American undergraduate, graduate, postgraduate, high school, short-term study, non-degree, and correspondence study programs, but graduate and undergraduate studies are the two most popular choices. According to 2003 AMIDEAST statistics, a total of 5,938 Palestinians requested information and showed interest in graduate studies, while 1,297 requests were made for information on undergraduate studies programs.

Matriculation Exams and the School System in WB/G 8. Out of a total of 554 high schools in the WB/G, 64 are private. In Ramallah, there are 10 private schools that operate on the American curriculum. Many Ramallah students are related to Palestinian immigrants living in the United States. Missionaries run many private schools in Jerusalem and Bethlehem, where great emphasis is placed on foreign language skills.

9. All public school students have to sit for the matriculation exam known as “Tawjihi” at the end of twelve years of schooling. The results of this exam are the sole criterion for getting accepted at a university and the choice of major in WB/G and Jordan. Private schools on the other hand offer students the choice of two curricula, the “Tawjihi” or the General Certificate of English (GCE). The (GCE) exam entitles passing students to be accepted at universities in the U.K. At the ten private schools in Ramallah that run the American curriculum, senior students sit for the (SAT) exam.

Why do Palestinian Students Study in the USA? 10. Palestinian students choose to study in the U.S. because of the quality of education, the wide choice of specializations and the experience of living in the United States. Family connections also play a major role, especially in the Ramallah area. It is estimated that around 60,000 Palestinian immigrants in the United States are related to residents of Ramallah and its environs. These immigrants have maintained strong family ties with their hometown, and the United States has become the natural choice for university education for many high school graduates in this city.

11. WB/G universities are limited in the scope of specializations currently offered. Studies have often been interrupted over the last four years because of the current unrest in the area. Public universities in Jordan are subsidized by the government and have always been the first choice for Palestinian students. However, when a quota system was introduced at Jordanian universities, the number of eligible students from WB/G sharply decreased, and Palestinians started enrolling in the private universities that have mushroomed in Jordan in the last ten years. Private universities have more limited fields of specialization and do not always carry the same level of prestige considered important for landing the best good jobs after graduation. The “Tawjihi” scores also limit acceptance and the choice of major. Acceptance at universities in Lebanon and Egypt has also become more difficult because of travel restrictions currently imposed by those two countries on Palestinians coming from WB/G.

12. Palestinian high school graduates are proficient in English language and academically prepared to study in American universities. In WB/G, English language is a must, starting from first grade in all public and private schools. There are also several private schools that run American or English curricula, particularly in the cities of Ramallah, Bethlehem and Jerusalem. High school graduates of these schools are good candidates to enroll in American universities.

Israeli Arab Students’ Demographics 13. Another niche market that American institutions of higher learning can tap into is the Israeli-Arab sector. Statistics reveal that in 2002 the number of Israeli Arab students in the senior class was 13,019. Out of that, 11,640 sat for the Israeli Matriculation Certificate (Bagrut) exam and 6,843 passed. That same year 4,151 high school graduates became eligible to study at local universities after passing the unified Israeli university entrance exam known as (Psychometric). Also in 2002 the total number of schools in the Israeli Arab sector, (secondary and elementary), was 123 while the schools’ population stood at 56,514 students. Israeli-Arab students and their families will be encouraged to attend either the Tel Aviv or the Jerusalem events.

For further information on the topic, please contact Issa Noursi directly at Tel: 972-2-625-5201, Fax: 972-2-623-5132, or E-mail: Issa.Noursi@trade.gov

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Automotive Aftermarket Products

Automotive Aftermarket Products Market Overview The automotive aftermarket sector in the West Bank and Gaza is made up of the Original Equipment Manufacturer (OEM) parts and their substitute. According to figures released by the Palestinian Central Bureau of Statistics (PCBS) imports of auto parts totaled $17 million in 2002. It is estimated that the total number of vehicles in WB/G is 150,000 including trucks, buses and other commercial vehicles and only 2% are from the U.S. and the rest from Europe and Asia.

There are ten authorized importers of new cars in the WB/G and they use OEM parts. They import European, Asian and American vehicles. Leading the list of new car imports is VW, followed by Audi and then Peugeot.

Because of generally lower incomes, there is considerable demand for competitively priced auto parts and used cars in the Palestinian market. Imports of three years old cars are allowed and they come mostly from Israel and used car markets in Germany. Used and refurbished auto parts however cannot be imported and expensive parts are refurbished locally. Demand for refurbished and competitively priced new parts has increased in the last three years due to the prevailing economic conditions.

The city of Nablus in the West Bank is considered the hub for importers and distributors of auto spare parts of European and Japanese make especially Mercedes Benz and VW/Audi. All commercial and transport vehicles like buses and minivans for passengers transport run by diesel fuel and the majority of passenger cars run on gas.

Imports of auto spare parts come mostly from Europe and the Far East yet American made parts are recognized for their high quality and are now more competitive with the rise in the value of the Euro versus the U.S. dollar.

Opportunities for U.S. Exporters of aftermarket products and services The Palestinian market is currently price sensitive and Palestinian importers look for competitively priced products.

Best Prospects:

Service parts: disk brake pads, shock absorbers, front suspension parts, filters for oil lubrication, air conditioning parts

Car body: front and rear lamps, bumpers, radiator grills, hood and trunk lids

Replacement service parts: tires, fan belts, water hoses, water pumps, brake components, engine and transmission components, electrical components

Vehicle accessories: car care products, polish, wax, upholstery spray

Water-cooling (Glycol) for radiators

Universal lubricants: lubricating oils, wax, glycol

For further information on the topic, please contact Issa Noursi directly at Tel: 972-2-625-5201, Fax: 972-2-623-5132, or E-mail: Issa.Noursi@trade.gov

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Healthcare Products & Services

Healthcare Products & Services The population in the Palestinian West Bank and Gaza is 4 million. The population growth rate is 3.9% and around 47% of the population is 14 years or younger. GDP in 2006 was $4.394 billion and in 2009 the local economy grew by 8%.

The size of the medical equipment and supplies market in the West bank and Gaza has been estimated to $20 million annually. The figures change depending on international donors’ support for specific health projects carried out in the area. The market is made up of medical capital equipment, medical supplies, and lab equipment and lab disposable supplies. There is no domestic production of medical equipment and supplies, so Palestinians depend 100% on imports. Germany and the UK are the primary sources, and are followed by European and Asian countries, the United States and Israel.

The U.S. share of the market is roughly 15% of the total, but two factors are expected to change the percentage: the falling value of the U.S. dollar vs. the Euro that makes U.S. exports more competitive and the continued support by USAID of healthcare projects in the West Bank and Gaza. USAID regulations stipulate that funds can be spent on American-made equipment only, and the Agency has pledged $86 million for the coming five years to help reform the Palestinian healthcare sector.

There are no import duties on U.S.-made goods entering the West Bank and Gaza, however products are subject to value added tax that is currently 14.5% and purchase tax. In order to benefit from duty free entry, products must have a U.S. certificate of origin for exporting to the West Bank and Gaza. Also prior to shipping approvals must be obtained from both the Palestinian and Israeli ministries of health for any medical product coming into the area.

The majority of the Palestinian population relies on medical services provided by public hospitals that are run by the Palestinian Ministry of Health under a general health insurance program. The Ministry is in charge of providing all medical equipment and supplies that are paid for mostly through international donors support programs. The total number of public and private hospitals in West Bank and Gaza is 72 and total number of beds is 5,000.

For more information, please contact Issa Noursi directly at Tel: 972-2-625-5201, Fax: 972-2-623-5132, or E-mail: Issa.Noursi@trade.gov

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Building and Construction Sector

The building and construction industry is one of the leading economic sectors in the West Bank and Gaza. Home building makes up the bulk of investments. Although spending in this sector has somewhat diminished over the past four years, it is estimated that in 2002 total output in this sector amounted to $300 million. From a high of 5,803 new building licenses in 1999, the number came down to 1,913 at the end of 2002. The current number of housing units is estimated at 676,029 and is expected to reach 973,761 by 2010.

Over the past 30 years, the growth rate in the home construction sector lagged behind the 3.9% population growth rate of the Palestinian West Bank & Gaza. Demand for housing also grew after the return of expatriate Palestinians soon after the Oslo Peace Agreement and, in 2002, home construction amounted to 57% of total construction spending in WB/G. Construction of office buildings also increased, spurred by demand from new local companies that were set up, and the Palestinian Authority that started renting out premises for its different ministries and agencies.

Preferences for house ownership are for individual homes with large spaces, while living in apartment buildings is the least desirable. The average size of a Palestinian family in the WB/G is 6 persons. In Gaza however, because of scarcity of land, the trend has been to build high-rise office and apartment buildings.

The situation in Gaza should significantly change after Israeli settlements were razed down that freed more land for construction. A lot of investments are expected to be made in building new houses especially for citizens who had their homes demolished by the Israeli army and to alleviate the housing shortage in Gaza. Gaza is one of the most densely populated tracts of land in the world: population count is approximately 1.5 million living in an area of 360-square/km and growth rate of 3.90%.

The private sector leads the construction sector and according to Palestinian Central Bureau of Statistics’ figures; there are 348 enterprises in the construction contracting business that employ 3,500 workers. In the public sector, most projects are geared towards infrastructure and are financed by international donors mostly USAID. These projects mostly focus on the provision of potable water, sewage disposal and road construction.

Stone is used in construction in the WB/G because it is readily available and cheaper than wood. It is estimated that there are 297 quarries and 5633 stone and marble cutting operations in West Bank and Gaza. Also climatic conditions make wood less desirable as the winter season is relatively short, and mild to hot weather prevails throughout most of the year. All other materials are imported and the list includes; lumber wood used to make doors, furniture and kitchens; steel, cement, aluminum profiles, glass, heavy equipment and machinery used in construction, and elevators.

For more information, please contact Issa Noursi directly at Tel: 972-2-625-5201, Fax: 972-2-623-5132, or E-mail: Issa.Noursi@trade.gov

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Environmental Water Technologies

Environmental Water Technologies Short and medium-term environment sector opportunities in the West Bank and Gaza are very small and limited to public projects that are undertaken by municipalities. These are small wastewater treatment or solid waste removal projects that are funded by international donor agencies like USAID and World Bank. However given the scarcity of water resources in the region, long-term prospects for water treatment for reuse could become a viable prospect. Solid waste removal and recycling could also become a viable industry but needs huge investments in equipment and educating the public.

An Overview of Some Water Projects Undertaken by USAID in West Bank and Gaza The Environmental Sector in the West Bank and Gaza is being developed with financing from international donors, mainly USAID, World Bank and the EU. Projects are being undertaken to increase the amount of fresh water available to the population by digging new wells in the West Bank, and desalination of seawater and wastewater treatment for reuse in Gaza. This creates an attractive niche market for U.S. exporters of environmental technologies particularly in desalination and wastewater treatment.

The Gaza Coastal Aquifer Management Program Between 1999 and 2005, USAID will provide $100 million to support a program of activities to protect and better manage the Coastal Aquifer, the only local source of fresh water in Gaza. Overuse and pollution endangers the aquifer, and intrusion of urban and agricultural pollutants and seawater is further limiting the amount of water that can be used. The cornerstone of this work will be construction of a desalination plant that will purify up to 20 million cubic meters of sea water each year, equivalent to nearly 40% of Gaza’s current municipal consumption. A water carrier project will also be constructed to distribute the water and finally a wastewater treatment and reuse system is planned for Gaza over the next three to five years. On a fee-for service basis, farmers will reuse wastewater after it has been treated. To date, this ongoing program has been obligated a budget of $26 million.

Construction of a New Wastewater Treatment Facility is planned for the Hebron area in the West Bank, home to more than 120,000 Palestinians. Currently, municipal sewage is dumped untreated into neighboring streambeds. The plan also includes pilot projects to improve the treatment of industrial waste. $12 million has been obligated to date.

The West Bank Water Supply Program aims to increase the amount of water available to Palestinians in the West Bank region chronically short of this vital resource. The program involves the drilling of new wells, construction of reservoirs and transmission systems to take water from wells to towns and cities; and building distribution systems to deliver water to homes. Budget obligated to date: $53 million.

For more information, please contact Issa Noursi directly at Tel: 972-2-625-5201, Fax: 972-2-623-5132, or Issa.Noursi@trade.gov

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