There may have been no visible progress on the official Israeli-Palestinian peace process in 2017, but one tech entrepreneur has been working hard behind the scenes to lay the foundation for a future agreement. And he’s doing it through business, not diplomacy. Yadin Kaufmann, an Israeli-American venture capitalist, is finding ways that Israel’s vibrant tech sector can improve the Palestinian economy — and, in the process, build trust between two societies bitterly riven by suspicion and conflict.
The Palestinian economy has long lagged behind Israel’s. In 2015, for instance, Israel’s per capita GDP was $35,700 — roughly the same as France’s. For the West Bank, however, the figure stood at a paltry $3,700. This disparity is particularly obvious in the tech sector, where Israel has served as a regional hub since the 1990s — with companies like Apple, Facebook, Google, and Amazon maintaining outposts in the country. In 2015, Israel exported nearly $12 billion in high-tech goods such as software and computers; similar exports from the West Bank and Gaza totaled just $5 million.
In 2011, Kaufmann and his Palestinian-American partner Saed Nashef set out to help close this gap by launching Sadara Ventures, the first venture capital firm to exclusively target Palestinian start-ups. Theirs may be a small contribution to the peace process, Kaufmann explains, “but it’s an important element, especially in a situation and environment today where there is unfortunately little progress being made on the more traditional political front.”
Since its first investment in 2012, in the Arabic-language hotel booking site Yamsafer, Sadara Ventures has provided funding for six new companies throughout the West Bank. Five years in, these companies have created roughly 200 Palestinian jobs, Yamsafer has attracted attention in the international tech community, and Sadara itself has raised $30 million from firms like Cisco, Google, and the European Investment Fund. And in 2017, Kaufmann and Nashef started raising money for a second fund that will target start-ups in Jordan or those in Israel with at least one Arab founder.
Kaufmann isn’t alone in thinking tech can play a critical role in Palestinian economic development. “High-tech in many ways is an ideal type of area for development and joint ventures” between Israelis and Palestinians, says Robert Danin, a former representative of the U.N.-led Quartet, a multilateral organization involved in mediating the Israeli-Palestinian peace process. “It promotes entrepreneurship and a Palestinian middle class, which can help promote the conditions for peace.”
Many others see the benefit of fostering economic growth in the Palestinian territories. In 2015, Israeli President Reuven Rivlin wrote, “It is clear that cultivating channels of communication and cooperation between Israeli and Palestinian businessmen … improves our situation.” And in 2016, a group of prominent Palestinian businessmen launched what they called a “new vision for the revival of the Palestinian economy,” based partly on promoting investment in the private sector. “We are looking at things that can be successfully tackled under adverse conditions,” said Nabeel Kassis, the director-general of the Palestine Economic Policy Research Institute.
More recently, in May, President Donald Trump declared his intention to work with Palestinian President Mahmoud Abbas on “unlocking the potential of the Palestinian economy.”
Kaufmann knows that this kind of work won’t dissolve generations of hostility overnight.
“I don’t think that anybody can expect that technology is going to solve the region’s problems,” he says. “But on the other hand, it’s very important that young people have opportunities and can help develop the place where they live.”
Rhys Dubin is an editorial fellow at Foreign Policy.