DATELINE: LEBANON

Making the guerrilla wheel go ’round

A far-reaching business empire operates in the shadow of the PLO’s military wing

Robin Wright November 16 1981
DATELINE: LEBANON

Making the guerrilla wheel go ’round

A far-reaching business empire operates in the shadow of the PLO’s military wing

Robin Wright November 16 1981

Making the guerrilla wheel go ’round

DATELINE: LEBANON

A far-reaching business empire operates in the shadow of the PLO’s military wing

Robin Wright

In a grungy basement workshop in Beirut, Ahmed Mergi hunches over an old Japanese sewing machine, making corduroy trousers, some 15 pairs a day. Muen Srougi is a carpenter in a sawdust-filled former warehouse in the rubble-strewn Beirut suburb of Bourj Al Barajneh, where he cuts and sands frames for cabinets, chairs and beds. Daoud Al Bina supervises the Arabic dubbing of British and American films at the ultramodern headquarters of Rock Cinematographic Industries, working amidst posters of Garbo and Chaplin, Gable and King Kong.

Mergi, Srougi and Al Bina represent an emerging trend within the Palestine Liberation Organization (PLO). After 17 years of functioning as a terrorist guerrilla group, the PLO is now developing a second reputation as an

organization synonymous with big business and sophisticated management. Known officially as Samed, the entrepreneurial wing of the PLO is also known locally as the “Palestinian Martyrs’ Works Society.” Samed products include kitchen spatulas, Louis XIV chairs, safari suits and hand-embroidered dresses, candy, poultry and butter. “Our gross profit for the last fiscal year was about $40 million [U.S.],” says Samed general manager Ahmed Abu Ala’a, who is responsible for nine consumer product factories, a film studio, two farms in Syria and six “model agricultural” projects in Africa. A major part of this profit comes from Samed’s latest initiative: exports. According to Abu Ala’a, the Soviet Union now regularly orders shirts and jeans; Kuwait

and Iraq buy children’s clothes; the Saudi royal family has ordered specially made living and bedroom suites; and Samed-dubbed movies and educational films circulate throughout the Middle East.

In many ways, the PLO’s businesses reflect the well-known Palestinian business acumen. Started in 1969 in a PLO refugee camp in Jordan, the economic wing of the revolutionary group has expanded to the point where it now employs 6,500 people full-time, mainly refugees, and another 4,000 workers part-time. One Western diplomat in Beirut described the civilian side of the PLO operation as “one of the largest em-

ployers in Lebanon.” And these employees are distinct from the 15,000 guerrillas of the PLO’s eight military factions.

Even though their employees are not militarily involved, PLO businesses are not without political purpose. Samed’s heavy propaganda line—outlined in the 18page introduction to its 1981 pocket diary—states that “Samed strives to further a crucial aspect of the Palestinian revolution, that of the social, economic and humanitarian struggle, along with preserving Palestinian popular heritage.” The back of the blue diary has a four-page tirade entitled: “Zionism, the obstacle to peace,” supplemented with two maps of Israel and its occupied territories. And while the dubbing at Rock Studios includes Walt Disney’s Snow White, the film lab is also endeavoring to finish its first film, The Olive Branch, a glowing history of the PLO.

Despite its economic success, the Samed operation is not without drawbacks. Working conditions are generally substandard, with the exception of the film lab, which was opened only last June. Industrial safety precautions are limited, equipment is antiquated, and pay is low. Mergi, a former Haifa tailor, earns only $300 a month, barely enough to support his family of six. But without Samed, he would be unemployed. “I make fine suits, three pieces, but there is no business. A man cannot live without something to do,” he says shyly. Private enterprise has dwindled during the six years of civil strife in Lebanon, and for Palestinians, who are often disliked and ostracized by many Lebanese, life has been anything but easy. Srougi, 17, who makes $220 a month as a

carpenter, has been working at the furniture factory since he was 12, when he was forced to find a job due to his father’s illness. He and an older brother, then 14, supported the family of 10. “No one but the PLO would employ boys of that age,” he explains.

Samed goods, all labelled with small SMX tags, enjoy a favorite-son status with foreign importers, and although Abu Ala’a admits the quality of Samed goods has not quite reached competitive standards, it has improved during the past few years. “I remember in 1973 to ’74, our products were accepted in Arab

countries only because they were produced by children of martyrs,” he says, “not because of quality. But now I can say that whenever there is a tender, Samed products are accepted because of good quality.”

Even though the Samed operation is prospering, it does not make a signifi-. cant contribution to over-all PLO profitability, according to Abu Ala’a. This is in large part due to the fact that counted among the PLO products are military uniforms, boots and basic essentials for guerrillas operating in southern Lebanon—in other words, net losses. Samed does not make anything resembling weaponry, however, except an imitation grenade lighter, complete with false detonating pin. The profitability of the businesses has also been compromised by the 12,000 refugees who have used them for on-the-job training and then gone on to more rewarding endeavors. Abu Ala’a claims that whatever profit there is goes toward expansion—to employ more refugees and buy new equipment.

As far as Western diplomats in Beirut are concerned, the PLO is the bestorganized guerrilla group in the world. But it can afford to be: the PLO is also the richest and, probably, best-managed revolutionary organization in the world, and the financial contribution made by Samed is a relative drop in the PLO’s monetary bucket. Contributions to the PLO are estimated to be more than $1 billion a year, giving the exter-

nal wing of the PLO a budget bigger than that of many small nations. And this figure does not include donated weapons and medical supplies, military vehicles or the $194 million provided by the United Nations Relief Works Agency for Palestinian refugees.

Most of the money comes from Arab nations—the Arab summit alone contributes more than $500 million a year, with countries such as Saudi Arabia throwing in an additional $120 million or so for special projects or specific factions, particularly Yasser Arafat’s terrorist group AÍ Fatah. The PLO also

derives several million dollars a year from the Palestinian “head tax,” the five to 10 per cent deducted from salaries of all working Palestinians, mainly in the oil-rich Gulf states. Over the years, the wealth has accumulated to the point where the PLO now maintains an investment portfolio, much of it in European and American companies. Because of its controversial reputation, the PLO invests quietly through private brokers, most of whom are Palestinian. One Western diplomat in Beirut claims that if all aid to the PLO dried up today, the organization could go on operating from its reserves and investments for up to eight years. With a twinkle in his eye Salah Dabbagh, chief PLO fund raiser and a U.S.-educated lawyer, claims that many Western nations would be surprised at the amount of PLO money invested in companies in their states. He explains that all funds are “laundered”through various Arab banks before the brokers even get to them.

Despite its assets, the PLO still claims it has budgetary problems, in large part due to fluctuations in contributions. After a guerrilla raid on Israel, or an Israeli attack on PLO camps in Lebanon, the money tends to flow in. But peace usually means dry times, financially. Dabbagh says that roughly 70 per cent of the PLO budget goes to nonmilitary activities—a figure not disputed by diplomats who monitor the organization. Specifically, the expenditures include running 108 “diplomatic” offices in most of the 116 countries that have officially recognized the PLO. The organization also runs eight hospitals in Lebanon, employing 300 doctors and an even larger nursing staff. The PLO funds more than 100 schools, a radio station, one daily newspaper, several magazines, a research centre, a team of academics and a garbage collection service in all the Palestinian refugee camps scattered throughout Lebanon. “It is a bureaucratic empire,” one Western diplomat concluded. “If you took away its military involvement, the PLO would amount to one of the fastest-growing, most successful business operations in the world.”