Friday September 19, 2014

I've Been Thinking:

Saudi Arabia opened the bidding yesterday. They pledged $500 million to help rebuild Gaza. That is about 1/6-1/8 of the entire estimated cost which has been put at $3-$4 billion.

The pledges will come. And as per normal, most pledges will only be partially filled.

But to what use will those pledged funds be going?

The real practical issues of rebuilding Gaza have not yet been resolved. We know that the Palestinian Authority will be supervising the rebuilding and we do know that Hamas will be sidelined. But so far, there is no organized method to plan and rebuild.

Just finding cement is a problem. Rebuilding Gaza will require approximately 10,000 tons of cement per day. Up until now, 30 tons per day are brought in and Israel just increased that three-fold making it about 100 tons per day. They will need those 10,000 tons per day for at least 6 months.

The PA has said that they do not want to buy cement from Israel. There really is no other choice. Importing that much cement from Cyprus or from parts of Europe into Gaza will prove to be financially prohibitive. So despite Palestinian reservations, a private Israeli company will provide the cement necessary to rebuild Gaza.

That will most likely be the case with other construction supplies as well.

There is no irony or surprise here. Israel and the Palestinians are inextricably linked inextricably one to the other. Palestinian growth, Palestinian development and the Palestinian economy need to feed off of Israel. And major sectors of the Israeli economy feed off services provided to Palestinians.

Conflict, destruction, rebuilding and even terror are part of their ongoing relationship. I do not see that changing - even with a peace agreement or the declaration of an independent Palestinian state.

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