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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.

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Indeed, for some Palestinians, the outsourcing business is one way of nourishing their own fledgling technology sector. Though the industry is still embryonic on a global scale, executives argue that it has the potential to one day serve as a pillar of the private sector.

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"Any sector that depends on Palestinian brain power is a promising sector. Frankly speaking, this is about the only thing that we have," says Bashar Masri, a member of Asal's board of directors.

Despite differing politics, 'as a company we work together'

To be sure, not all Palestinian technology executives see outsourcing to Israel as the best way to prosper. Andre Hawit, the chief executive of Ramallah start-up gSoft Technology solutions, says the Palestinian technology sector shouldn't become dependent on Israel. Building original products is a better way to attract talented programmers and venture capital and is a growth model "more resilient to political and physical limitations on the ground," he says.

There are signs of optimism for Palestinian start-ups: This month, Sadara Ventures, the first-ever Palestinian technology venture capital fund, announced it had raised some $29 million from investors like Google, Cisco, and former America Online CEO Steve Case. It plans to expand to $50 million next year.

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The fund is being comanaged by Yadin Kaufman, a veteran Israeli venture capitalist who joined with Palestinian software entrepreneur Saed Nashef after he realized that there is technology know-how in the West Bank but no capital to fund it. "It is an untapped opportunity," says Mr. Kaufman, who says the fund invests solely in Palestinian firms rather than Israeli-Palestinian joint ventures. "If a high-tech knowledge-based economy can flourish there, I think this is good for everyone in the region...."

Mellanox is also looking to invest more in the West Bank. If its research and development center opens by year-end as planned, Mellanox would become the first publicly listed Israeli technology company to open a branch in the West Bank.

Asked whether the Israeli-Palestinian conflict ever puts a chill on the daily relations between Israeli and Palestinian programmers, Waldman insisted that current events don't affect the work environment.

"They can have their own politics and we can have our own politics," he says, "but as a company, we work together as a team."

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