For years we have heard warnings of the imminent collapse of the Palestinian economy. While the socio-economic situation remains dire, there have been some positive developments. Support from donors has increased.
Negotiations between the parties continue, and the Palestinian Authority is implementing key projects. But beyond these achievements, it is hard to see even the outlines of a sustainable Palestinian economy, unless Israel delivers on its promises to lift restrictions.
Economic growth is key to political progress. The international donor community has spent years supporting Palestinian institution-building and promoting accountability. Actions such as Israel’s recent restrictions on money transfers to Palestinian banks in the Gaza Strip undermine Palestinian institutions. If the Palestinian Authority is unable to pay salaries, it will lose popular support. With restrictions on money transfers, the UN is unable to pay its staff and disburse emergency support. Such restrictions undermine legitimate institutions, bolster the black economy, and embolden radical organisations.
In the West Bank, settlement activity continues to increase. Israel’s 2007 census show that the settler population has increased from 130.000 in 1995 to more than 270.000 today. Israel deserves recognition for the evacuation of the unlawfully occupied house in Hebron two weeks ago. But we remain deeply concerned with the emerging pattern of destruction of Palestinian houses and evictions of Palestinian families. These actions are contrary to international law and prejudice the outcome of future negotiations.
Israeli settlements and closures have evolved into a coherent infrastructure throughout the occupied territories. This infrastructure that strangles the Palestinian economy, undermine Palestinian institutions and prevents the development of a Palestinian state. Settlements and closures have become a fundamental threat to the vision of two states.
On the Palestinian side we have seen dangerous fragmentation. Militant Palestinians continue to undercut bilateral negotiations by indiscriminately aiming their violence at Israeli civilians. Negotiations may come to naught unless they are supported by Palestinian unity. Support for renewed reconciliation efforts is urgently needed, along with an effective cease-fire in and around the Gaza Strip.
We are faced today by political uncertainty on many fronts. To support ongoing negotiations, decisive action by key stakeholders is needed. As donors we need to remind ourselves of the connection between financial support and political results. We must to join our efforts in our support for the peace process. Fragmentation among donors will only harm prospects for peace.
We welcome the recent adoption of Security Council Resolution 1850, which calls on donors “to assist in the development of the Palestinian economy, to maximize the resources available to the Palestinian Authority, and to contribute to the Palestinian institution-building programme in preparation for statehood”. The Ad Hoc Liaison Committee remains the key instrument for mobilising and coordinating donor support, working in tandem with the Annapolis-process. We have succeeded in mobilising today’s high levels of contributions to the Palestinian Authority under President Mahmoud Abbas’ and Prime Minister Salam Fayyad’s able leadership. The AHLC meeting in September this year confirmed the renewed commitment of all parties – Israel, the PA and donors – to support the creation of a Palestinian state. The willingness of donors to continue to support the process, rests on whether the parties achieve results. But the opportunity is there and the momentum must be consolidated towards a negotiated solution to the conflict and the establishment of a viable Palestinian state.
Thank you, Mr President