Are they really ready for prime time?
The Washington Institute for Near East Peace looks at the 'Palestinian Authority's readiness for 'statehood' and finds it wanting. The IMF report correctly emphasizes that Israel will play a central role in the PA's economic future: "To maintain the growth momentum, rebalance the composition of output, reduce regional disparities [i.e., Gaza compared to the West Bank], and accelerate the state-building process, it is essential for [Israel] to phase out all restrictions as soon as possible." This implies that a unilateral statehood declaration would not be the culmination of PA state-building efforts, but rather their undoing, since Israeli cooperation could not be counted on in such a scenario.But hey - don't let that spoil the party.
Consider the dramatic increase in PA tax revenue, which has reduced the Palestinians' past overreliance on foreign aid. Digging into the tables accompanying the IMF report, one finds that two-thirds of current PA receipts are "clearance revenues," that is, taxes collected on the Palestinians' behalf by Israel and passed on to the PA. These include taxes on goods shipped from Israel to the West Bank and Gaza, such as customs duties and heavy tariffs on petroleum products. In 2010, the PA received $1.26 billion in clearance revenues, compared to the $750 million in domestic revenue it collected on its own. In other words, the PA is able to pay its bills only because of the money transferred by Israel. If bilateral cooperation ceased, the PA would be in no position to pay salaries or meet its other commitments.
The Gaza situation highlights Israel's centrality to the PA economy. As the IMF and World Bank reports document, once Israel allowed more goods to be shipped into Gaza despite Hamas control there, the economy recovered nicely. The IMF report also praises one surprising example of Israeli cooperation in Gaza, namely, the manner in which Israeli commercial banks have worked with Palestinian banks to facilitate "timely and regular" cash transfers into the territory, overcoming Israeli concerns about the "legal implications" of conducting business with the terrorist organization Hamas.
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The World Bank and IMF are correct to praise the PA, and particularly Fayad, for their hard-won progress in building the economic aspects of a future state. Fayad's accomplishments came against long odds and will be vital to the success and sustainability of any Israeli-Palestinian peace agreement. But they have been put at risk by the stagnation of peace negotiations and the looming prospect of a unilateral Palestinian declaration of statehood. Moreover, they are insufficient without greater attention to the political aspects of state building. The PA and its Quartet partners -- the UN, EU, United States, and Russia -- would be wise to put the same sort of steady and determined work into these areas that Fayad has put into the Palestinian economy.
Read the whole thing.
Labels: Palestinian state RIGHT NOW syndrome, two-state solution, unilateral declaration of statehood
posted by Carl in Jerusalem @ 4:18 AM
1 Comments:
If Israel seals the borders, I don't give the PA and Hamas much chance of survival. Whether Palestinian Arab leaders want to acknowledge it or not, they are dependent on Israel to stay afloat.
And a unilateral declaration of statehood would be like destroying themselves... before they ever got off the ground. But then the Palestinians have never made any wise choices in the century since their conflict with Zionism began. And they're not likely to make one in the foreseeable future.
What could go wrong indeed
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