What Happened to This West Bank Boom Town?

After a promising three years, Ramallah residents' hopes for peace and prosperity have largely been dashed

Once again, smoke spews from burning tires in the streets of Ramallah, this hilly West Bank city. Shots ring out. Youths rush forward with stones in their fists. Cars race from behind to pick up the wounded. Children's voices are no longer heard on the playgrounds. Midday business lunches are a thing of the past. Getting on with one's daily life was, it seems, an interlude.

Ramallah appeared to be speeding ahead with its newfound prosperity. Former political prisoners waited tables, installed electricity, or pruned fruit trees during the day. At night they strolled with their families along neighborhood streets.

As the de facto administrative center for the West Bank Palestinian Authority (PA), Ramallah became a boom town. Real estate prices soared. The PA's fast-growing clerical staff and expanding police force needed apartments, groceries, furnishings, and cars. By last month, its payroll was estimated at near 70,000. A substantial portion of those salaries went to shopkeepers, restaurateurs, and builders in Ramallah.

The city also was injected with private capital. Between the time of the Madrid talks through the Oslo accords, many Palestinian-Americans who originated in Ramallah and the nearby towns of el-Bireh and Beit Hanina returned home. Their US-born children needed schools, Nike shoes, pizza, Oreo cookies, and more. To answer the needs of these families, American-curriculum schools and US-style supermarkets sprung up.

Like Palestinians everywhere, Ramallah residents knew the Oslo accords were not equitable. Their share was small. The PA had a long way to go to realize its promised statehood. Even so, these people dove into the peace with enthusiasm. Take Bassam, a carpenter and a former political prisoner. Arrested during the intifadah, he lost four years of his youth. His release was delayed for a year after the Oslo accords. Yet he was ready to move ahead.

When we met last year, he and his brothers were elated with the community's prospects, as well as their own. Talal, the eldest, visited from Philadelphia at his brothers' urging. Mohammed, who once wanted to emigrate to the US, now made plans with Bassam and Talal to develop a building the family owned. With the construction boom, the warehouse could become a real income for the brothers and their families. Talal began to think of moving his family back to Ramallah. Yet none of that happened.

Talal went back to Philadelphia to his job as a taxi driver. Bassam is struggling to make a living, now that construction in the area has slowed to a trickle. Mohammed's job at the Ramallah town hall barely pays for the family's food. The warehouse is closed up. So what went wrong?

The quiet of the past three years was not peace, Palestinians say. It was an agreement by the Palestinian public to give peace a chance. The treaties Yasser Arafat signed in Oslo and Washington weren't ideal. But Palestinians said, "We're tired. Let's get on with our lives." They pinned their hopes on the prosperity part of the peace deal that the US and Israel held out to them.

Today, despite the influx of capital after 1991, despite investments from abroad and the return of many Palestinians with cash and international experience, the economy is in sharp decline. Money has dried up without creating jobs. And much of what arrives in the coffers of the PA to support its huge bureaucracy flows into the hands of Israeli manufacturers and suppliers.

Across the world, Palestinians were a model of refugees who started with nothing and built fortunes in a few years. Known for their industriousness and entrepreneurial skills, they welcomed Mr. Arafat's declaration that the new and free Palestinian areas were an "open market."

BUT after all this effort, the most successful Palestinian merchants find they have failed. When they try to build a factory or communicate with business partners in other towns, they encounter one obstacle after another. To export or import any product, they need an Israeli agent. They say they receive no help from Palestinian officials. Indeed, they witness corruption spreading among the very people to whom they looked for leadership. "The Palestinian Authority itself undermined private initiatives by their people. After three years, the PA hasn't build a cement factory, nor has it any housing project under way," notes Ramallah-based economist Dr. Adel Samara, who blames the administration for bad planning and corruption.

Few today try to hide their bitterness. Samir moved with his family from New York to Ramallah a year ago. He planned to open a soda factory. "It was impossible to get the licenses I needed," he said wearily. "I don't know of any Palestinian manufacturer who is able to compete with the Israelis, price-wise. The public is buying all Israeli-made goods."

Abu Hamid was in Italy for 15 years. He came back and opened a pharmacy. "Business was good for two years," he reports. "Now it's steadily declining. People don't have the money."

These are not refugees who fled to the West Bank in 1948 and lived on PLO handouts and United Nations aid for 50 years. They are not children spawned in crowded refugee camps without running water. Nevertheless, they are joining with those from the refugee camps in what seems the only option - protests in the streets.

* Barbara Nimri Aziz, a broadcaster and writer who specializes in the Arab lands, frequently visits the West Bank and Gaza.

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