Americans Seek a Peace Dividend for Palestinians : Business: U.S. executives and activists believe investing in the West Bank and Gaza is the best way to ensure the success of self-rule.

They are Arab Americans and American Jews, entrepreneurs and exporters, international economic pioneers driven by a combination of idealism and a new chance to turn a profit. Above all, they are willing to take big risks for big rewards.

They are undertaking, or at least exploring, steps once thought all but impossible: investing in businesses or development projects in the poor, violence-racked territories of the West Bank and Gaza that Israel is to turn over to Palestinian control.

Despite daunting obstacles, an impressive group of about 80 business leaders and political activists have joined forces at the behest of the Clinton Administration following the Sept. 13 signing of the Mideast accords. Dubbed Builders for Peace, the group aspires to make the fruits of the treaty evident quickly to long-suffering Palestinians by helping create jobs and economic opportunity.

“As Palestinians become vested in developing their economy, Israel will also experience greater security and the benefits of regional stability and cooperation,” said James Zogby, co-president of Builders for Peace and president of the Arab American Institute in Washington. He called the effort “a way of not only investing but, to some extent, investing in each other.”

The architects of this endeavor, which was announced by Vice President Al Gore on Nov. 30, hope to show that economic progress is possible even as Israelis and Palestinians are still killing each other. They hold out particular promise in the fields of agriculture, tourism, energy and water development.

Zogby and his co-president, former California Rep. Mel Levine, along with several people interested in doing business in the region, will join Commerce Secretary Ronald H. Brown on a mid-January trip to Israel, Jordan, Gaza and the West Bank, where they plan to announce the first few ventures. A U.S. Trade and Development Agency mission early next month may help by starting feasibility studies.

One of those who plans to make the trip is Ziad Karram, an American Palestinian who was born in Damascus, Syria, and came to the United States at age 16. Karram is president of a consortium of small companies in Fairfax, Va., that builds hotels, schools, shopping centers and other commercial structures. He intends to construct a hotel in Gaza.

“A lot of people are going to come to Gaza, and they have no place to do business with all the Western facilities,” said Karram, a member of the Builders for Peace advisory board. “A good hotel to handle all these people has big potential.”

Karram has lined up financing with Middle Eastern banking institutions, and Builders for Peace has found his company a partner in Gaza who will provide the site. He said his incentive is not entirely financial.

“Our objective is to do it as soon as possible so we have tangible materials on the ground that people can see and touch so that we can convert the skepticism to a positive reality,” said Karram. His firm is interested in eventually building a hospital, schools and housing in Gaza as well, he said.

Beyond the persistent physical dangers in the impoverished region, the hurdles are formidable. The eventual governance of Gaza and the West Bank remains uncertain under the agreement between Israel and Yasser Arafat’s Palestine Liberation Organization. Public works such as sewers, wells and telecommunications systems are in short supply. There is a dearth of roads connecting towns and villages.

Banking, commercial and legal systems are yet to be adopted. And a new, and more relaxed, regulatory regime must be established after years of tight Israeli control that Zogby calls “forced underdevelopment.” The gross domestic product of the West Bank and Gaza is just $2 billion annually; the entire industrial output is less than $18 million a year.

“Clearly, a lot of investors want to have a sense of the legal and structural framework before they sink significant resources into this region,” said Levine, who was a leading pro-Israel advocate in Congress and is now in private law practice.

“There is a strong sentiment in the Jewish community that they want this to work, but there is an understandable initial reluctance--until the situation on the ground becomes stable and until people feel safe--to take what will be perceived as significant risks.”

An exception is Leo Kramer, an international business consultant who has been exporting strawberries and tomatoes from Gaza and grapes from the West Bank for two years. He said he’s had to overcome the reality that “you’re dealing with a non-country and most of the rules and laws of the world relate to a country.”

Kramer, who is Jewish and is a member of the Builders for Peace advisory board, says he became involved in the region because “I thought it was to Israel’s advantage that the Palestinians have a stake in their lives, and the best way was to help them make a living. . . . And the thing that they produce best with quality is agriculture.”

Kramer hopes to construct an olive-oil packaging plant in the region that will export to Europe.

He said he is optimistic because the Palestinians are a well-educated and industrious work force. Zogby said the region’s hundreds of small enterprises represent “an extraordinarily vibrant sector of very skilled and creative people.”

The Clinton Administration is augmenting the initiatives of Builders for Peace.

The Overseas Private Investment Corp., which assists U.S. investors operating in developing nations, has agreed to make $100 million in loans, loan guarantees and insurance for losses due to political upheaval available to American investors in the region. Also, an interagency task force is coordinating and helping American investors in the occupied territories.

This kind of momentum encouraged Jamie Farr, a Lebanese American and an actor best known for his role in the “MASH” television series, to become involved in a project to import jewelry, home furnishings, rugs and other goods from the territories. Farr intends to sell Middle Eastern articles on a Home Shopping Network show that he will host in 1994.