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Tech diplomacy: Israeli CEO hires Palestinian programmers

Doing so costs more for Eyal Waldman than outsourcing to Eastern Europe. But the CEO of Israel's Mellanox Technologies says the investment in peace is worth it.

By Correspondent / April 22, 2011

Murad Tahboub of Asal Technologies, a Ramallah tech company.

Joshua Mitnick

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Ramallah, West Bank

The last time chief executive officer Eyal Waldman had been to the Israeli-occupied West Bank was as a soldier. But when he needed to outsource some work for his fast-growing Israeli technology company, he chose an unconventional solution: hiring Palestinian programmers from Ramallah.

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The year-old experiment has worked so well that the firm, Mellanox Technologies, expects to establish a research and development center in Ramallah. Even if it costs more than a similar operation in Eastern Europe, Mr. Waldman says there's an intangible upside: boosting political stability by employing Israel's neighbors.

"We think that it makes our whole economy and whole geopolitical situation better," he says.

The CEO's vision of business and politics harks back to the 1990s, when excitement about the Israeli-Palestinian peace process prompted talk of a new Middle East – including burgeoning economic ties between Israel and Arab countries.

But in the ensuing decade Israel erected a security barrier to prevent Palestinian attacks, making any cooperation with Palestinians at least seem like a pipe dream.

In recent years, however, the Palestinian uprising has subsided and Israel has relaxed some of its movement restrictions, giving the West Bank economy a chance to grow. It's also provided an opportunity for cross-border joint ventures.

A viable Israeli-Palestinian business model

Mellanox's development teams usually hold meetings via video conference, but Palestinian programmers also travel through Israeli military checkpoints at least once every two weeks for meetings. Waldman himself has twice visited Ramallah, where he was impressed by the building boom under way in the city – the seat of the Palestinian government.

Israel's technology industry – which lures investment from leading tech multinationals – is located less than 50 miles from Ramallah, a proximity that facilitates cooperation. Asal Technologies, the outsourcing firm that supplies programmers for Mellanox, gets 40 percent of its work from Israeli companies and Israeli branches of multinational companies such as Intel.

"We are close by, in the same time zone, and have the same [Friday-Saturday] weekend. They know us and we know them," says Asal chief executive Murad Tahboub, who sees the potential for boosting not only business but peace as well. "Palestine was never on the radar of the information-technology industry worldwide. But there is a viable business model, and it helps the region.... Having a good economy is good for the Palestinians, which makes people more open to living peacefully."

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