An academic study conducted by a Palestinian researcher from the West Bank city of Bethlehem, revealed that the amount of investments by Palestinian businessmen in Israeli settlements and in Israel itself, amounted to $2.5 Billion in 2010.The study was conducted by Issa Smeirat, 43, as part of his M.A Degree. This is the first study of its kind, and its results surprised Palestinian and Israeli officials, Israeli Daily, Haaretz, reported.

Haaretz said that should these investments have been conducted in the West Bank, they could have created at least 213,000 jobs.

According to the study over 16,000 Palestinian businessmen from the West Bank, who hold permanent permits from Israel to enter the country, established businesses and firms inside Israel and its settlements. This includes establishing several factories and companies, many of which have numerous branches, all paying taxes to Israel.

Smeirat also studied the motives that pushed those Palestinian investors to invest in Israel and its illegal settlements, especially since the issue is very sensitive and more Palestinian organizations, activists and officials are calling for boycotting of Israel and its settlement products.

Talking to Haaretz, the researcher said that the sensitivity of this issue prevents the publishing of the identities of the investors, adding that while conducting his research, the Palestinian National Economy Ministry in the West Bank -the same ministry that launched the campaign to boycott settlement products- stated that the Paris Agreement does not prohibit investing in settlements.

He was referring to the Protocol on Economic Relations, which came as an annex to the Gaza-Jericho Agreement, the first peace agreement signed between Israel and the Palestinian Liberation Organization on May 4 1994.

The agreement incorporated the relations between the two parties, and was then incorporated and suppressed by Oslo II Agreement, and became known as the Interim Agreement on the West Bank and the Gaza Strip of 24 and 28 September 1995.

The study by Smeirat was presented at the end of this past summer at the Al-Quds University. He obtained detailed information from Palestinian Commerce and Industry Offices about Palestinian investors in Israel and its settlements.

He managed to contact 540 investors, and distributed 420 surveys to others, but only 374 of them filled in and returned the surveys. He also managed to conduct face-to-face interviews with over one-hundred investors.

His study revealed that most of the investors are fluent in Hebrew, and more than half of them are aged forty years or more. This shows that those businessmen worked in Israel before it began closing its borders to the Palestinians in the early nineties.

Approximately 23% of them worked as labourers in Israel before they established their firms and businesses, less than 1% of them speak no Hebrew.

One-fifth of the investors stated that their businesses are in Israel, Israeli settlements, the West Bank and abroad, while another one-fifth said that their investments are only in Israel and its settlements.

Approximately 90% of them said that their first ever experience in investments was conducted in Israel.

The researcher said that he believes that the main motive that encourages Palestinian investors to invest in Israel and its settlements is attributed to the limited capacity of Palestinian investments, especially since Israel controls 60% of the occupied West Bank. They also control most natural resources, especially water, in addition to Israel’s restrictions on the freedom of movement of the people and the goods, especially since its controls all border terminals in the West Bank, and has closed Israeli markets to Palestinian products.

The Israeli restrictions caused a sharp increase in production costs in the West Bank, comparing to production costs in Israel.

This is besides the sharp increases in prices of Palestinian lands (for sale and for lease), and the increase in the costs of water, power, and not to mention the lengthy wait that investors have to bear when importing raw materials. These factors increase cost production by approximately 30%.

The capital of 16,000 Palestinian investors in the Palestinian Authority areas are distributed as the following: 3,300 investors in Hebron; 3,100 in Ramallah; 3,000 in Nablus; 2,000 in Bethlehem; and 1,000 in Nablus.

Palestinian investments, according to Smeirat, are around 7 Billion U.S. Dollars; approximately $5 Billion of these investments are not in Israel and its settlements, as they are mainly invested abroad, either in projects or stocks, an issue that poses a significant challenge to investment opportunities within the West Bank.