Quietly, Israeli high-tech companies contract Gaza engineers

Quietly, Israeli high-tech companies contract Gaza engineers

In Hamas-led Strip, where collaboration with Jewish state can be deadly, some Palestinian firms increasingly forge business ties with Israeli industry

Representatives for Mellanox, Rawabi and ASAL discussed the prospects for Israeli and Palestinian tech partnerships, in Tel Aviv. 12  July 2017 (Courtesy)
Representatives for Mellanox, Rawabi and ASAL discussed the prospects for Israeli and Palestinian tech partnerships, in Tel Aviv. 12 July 2017 (Courtesy)

When Dan Leubitz needed a contractor for a project with his Israeli tech firm, one address in the list of tenders caught his eye: Gaza.

It was 2015, only a year after Israel fought a war with Gaza’s terror rulers Hamas.

Leubitz’s rapidly growing firm Innitel was scouting for a contractor in low-cost, highly skilled tech hubs such as Eastern Europe and India.

But the Israeli-American had never considered looking in a territory just 50 miles away.

The Israeli and Gazan firms have since formed an unlikely alliance, doing business worth around $10,000 a month.

“Now friends at other companies ask me ‘do you have the guy’s number?'” said Leubitz, whose firm provides cloud-based call center software.

It is not uncommon for high-tech companies from the West Bank, run by Hamas’s secular rival Fatah, to work directly with Israeli counterparts.

Illustrative: Palestinian entrepreneurs brainstorm ideas as they compete for acceptance in the third version of Mobaderoon project, hosted by the Islamic University’s Business and Technology Incubator in Gaza City on November 24, 2015. (Khalil Hamra/AP Photo)

But in Gaza, which has seen three wars with Israel since 2008, it is almost unheard of.

Hamas executes Gazans for “collaborating” with Israel, while the Jewish state maintains a blockade on the coastal enclave, worried that materials entering the Strip will be diverted by the terror organization’s military aims.

Hamas has fought three wars with Israel, most recently in 2014, since wresting control of the enclave in 2007. The terror group has attacked Israel through a network of underground cross-border tunnels and has fired thousands of rockets on Israeli cities. Israel attributes the Palestinian death toll in the conflicts — over 2,000 in the 2014 round of fighting — to the terror group’s practice of embedding itself in the civilian population and says most of those killed were fighters.

Though Israel imposes restrictions on trade, the online nature of the tech industry largely avoids the rules that limit other sectors.

Leubitz’s partner firm has now expanded to work with a number of Israeli companies.

Tech giant Mellanox — which makes technology that connects computers, databases and servers — employs 10 of the Gazan company’s staff and plans to double that.

AFP has chosen not to name the company in Gaza for security reasons, but did visit its offices in Gaza City.

Its CEO said that despite the potential gains, he believed it was the only Gazan tech company working with Israeli counterparts.

“It isn’t an easy decision,” he said. “But we have complete conviction to take our services to the Israeli market.”

Eyal Waldman, President and CEO of Mellanox Technologies Ltd. (YouTube)

He stressed that the relationship was purely financial and didn’t stray into politics, arguing that Gazans were simply looking to sell their services to Israel.

As Israel controls what enters the enclave, many Israeli products are imported and sold in Gaza.

“Where do we buy yogurt from? From Israel. And the petrol, where does it come from? From Israel. Some of our fruit we buy from Israel,” he said.

“Does anyone criticize this business? No. As they benefit from us economically, we should benefit from them by selling our services.”

He pointed out that Palestinian companies in the West Bank now deal with Israelis with relative ease.

“At the beginning they had problems. Now there are companies that have dozens of employees,” he said.

Israeli chip maker Mellanox Technologies Ltd., marks Geek Pride Day in a recent video. (YouTube screenshot)

In theory, both sides have plenty to gain. Nearly three out of five young Gazans are unemployed, one of the highest rates in the world. Despite being well-educated, the population has few meaningful job opportunities.

Israeli firms meanwhile benefit from far cheaper labor. Hiring a Gazan engineer costs around a fifth of the price of hiring an Israeli once taxes and other costs are factored in, Mellanox CEO Eyal Waldman told AFP.

The firm also benefits from English-speaking staff in the same time zone.

“There is talent there and they have nowhere to work. So we thought, let’s enjoy… the top talent in Gaza and have them work for us,” Waldman said.

The Gazans, Waldman said, have worked on a variety of research and development projects.

He hopes even such small-scale coordination can have another impact.

“You have Palestinians talking to Israelis that are 20 to 30 years old. They have never talked to Israelis — they see them as the enemy. Now they talk about soccer and joke.”

So far the Gazan company hasn’t faced pressure from Hamas.

When Mellanox announced it was going to take on staff in Gaza, it was covered in both Israeli and Palestinian media.

Hamas, the Gazan CEO said, could reasonably guess the company but taking action would make dozens of people unemployed and their families poorer.

“Gaza is small and everyone saw the news. No one said anything,” he said.

Yet having lost a family member in the 2014 war, he said he could understand that most Gazans were not ready to work with Israelis.

Waldman said right-wing Israeli politicians had spoken out against the idea.

“We also have some employees that have extreme right political views. They definitely voiced their views,” he said.

None of the staff working in Gaza for Mellanox were willing to speak, even on condition of anonymity.

And while the 10 staff in Gaza are effectively employees of Mellanox, their salaries are paid through a Palestinian firm to avoid tensions.

“We felt it was too sensitive for them to have an Israeli company there,” Waldman said. “One missile can blow the whole thing up.”

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