PA, Russia step up economic ties

As part of efforts to boost cooperation, the Palestinian Authority and Russia signed understandings on energy, customs and labor exchanges at the third meeting of the Russian-Palestinian Intergovernmental Commission on Trade and Economic Cooperation.

al-monitor Russian President Vladimir Putin meets Palestinian President Mahmoud Abbas at the Kremlin in Moscow, Russia, July 14, 2018. Photo by Mikhail Svetlov/Getty Images.
Ahmad Melhem

Ahmad Melhem


Topics covered

economic agreements, bilateral trade, free trade zone, russia in middle east, palestinian economy, russian interests

Nov 15, 2018

RAMALLAH, West Bank — The Palestinian Authority and Russian Federation have their given bilateral commercial and economic ties a major boost. Palestinian Minister of National Economy Abeer Odeh and Russian Minister of Labour and Social Protection Maxim Topilin signed a protocol Nov. 7 at the third meeting of the Russian-Palestinian Intergovernmental Commission on Trade and Economic Cooperation held in Ramallah. The protocol includes agreements and memoranda of understanding (MoUs) in a number of sectors.

The two countries signed MoUs on energy, customs and employment at the end of the meeting, which Al-Monitor attended. The meeting sought to spur Russian energy companies to invest in the Palestinian territories and discuss the possibility of setting up Russian industrial zones and joint factories in the Palestinian territories. Another MoU offering customs exemptions to Palestinian exports to Russia is expected to be signed.

Odeh said in her address at the meeting, “The commission meeting reflects hours of work by the joint commission and diplomatic channels to conclude business partnerships on the ground and improve bilateral trade.” She praised work toward “granting the Palestinian products preferential treatment to enter Russian markets, increasing trade volume between the two countries by encouraging direct Russian imports to Palestine to achieve economic growth in both countries and implementing joint industrial zones projects.”

Odeh expressed a Palestinian desire to promote economic, educational, cultural and industrial relations with Russia as well as bilateral ties in the tourism, energy and communications sectors. She said these efforts will open up new horizons for cooperation between the two countries’ private sectors and promote Russian investments in the Palestinian territories next year.

Odeh went on, “Palestine is proud of [its] skillful labor force," saying, "The Palestinian and Russian Labor Ministries signed a cooperation agreement to help create jobs for Palestinian youths in Russia in light of the elevated unemployment rate in Palestine.” The Palestinian Central Bureau of Statistics indicated in its Nov. 8 report that unemployment has hit 31.7% in the Palestinian territories (54.9% in the Gaza Strip and 17.3% in the West Bank).

There are no official figures on the Palestinian labor force in Russia, but its presence is so far minimal.

Topilin said in his own address, “This is the third time that the joint commission has convened, which affirms that bilateral ties are an important factor for our foreign policy. We are currently active in promoting political and commercial relations,” he added.

“Russia emphasizes cooperation between the two countries, the quest for peace and economic growth in Palestine,” he stated. “Via the joint commission, both the Palestinian and Russian sides concluded important agreements, including the Russia-Palestine Agreement on Promotion and Mutual Protection of Investments signed before 2017, which will help Russian and Palestinian businessmen promote bilateral cooperation,” he added.

Topilin indicated that it is important to activate industrial and economic cooperation between the two countries, particularly setting up industrial zones in Palestine.

During the session, disparate figures emerged on trade between the two countries. While Palestinian statistics indicated that trade exchange volume ranges between $10 to $15 million, Russian figures put it at about $4 million. The two sides signed an agreement standardizing trade data collection. Topilin said, “We invite Russian and Palestinian businessmen to make direct contacts for the execution of joint projects, particularly since trade exchange volume is climbing every year and surged by 60% in the past eight months.”

Palestinian Ambassador to Russia Abdel Hafiz Nofal told Al-Monitor, “The commission’s key goal is to heighten and advance trade exchange between the two countries, with the aim of establishing a free trade zone through which specified goods and products enter without being subjected to custom duties.”

He added, “The joint commission’s meeting affirms the willingness of both countries’ political leaderships to facilitate cooperation and friendship in all fields and proves that there is genuine potential for economic cooperation between the two countries.”

He indicated that the Palestinian efforts to promote bilateral ties with Russia come upon the directives of President Mahmoud Abbas, who desires to make economic relations as strong as political relations.

Abbas received Topilin Nov. 6 at the presidential headquarters, where he stressed “the importance of the special bilateral relations in the promotion of economic and trade relations” and “Palestine's keenness to strengthen them in a way that serves the interests of the two countries," Wafa reported.

One of the most promising sectors is that of the energy. Nofal disclosed that the Palestinian side will propose the idea of ​​setting up a Russian power plant and cooperating in gas field exploration.

Zafer Melhem, the acting chairman of the Palestinian Energy and Natural Resources Authority, told Al-Monitor that the intergovernmental commission's joint committee on energy is designed to promote cooperation in the energy sector, such as developing renewable and traditional energy technology, cooperating in oil and gas exploration, providing the Palestinian labor force with training and exchanging knowledge and experience in a way that serves both sides.

Melhem said that he will visit Moscow in the first quarter of 2019 to discuss implementation mechanisms. He noted that there will be cooperation in the exploration of oil and gas fields, citing “our need for geological studies and land and aerial survey of Palestine. Russia has a great experience in this field,” he added.

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