A month ago the international donor community, the Ad-hoc Liaison Committee, met here in New York to assess the progress on building Palestinian institutions in the Palestinian Territory. At that meeting The World Bank reported to the donor community that the Palestinian Authority (PA) now is, and I quote, “well-positioned for the establishment of a state at any point in the near future”, end of quote.
Over these last few years the PA has made an impressive effort in building transparent and accountable institutions. Economic growth, combined with a steady decline in budget deficits give hope that the Palestinian economy is gradually moving towards financial sustainability.
However, the World Bank-report also stated clearly that this emerging state structure in its current form is not sustainable, but remains dependent on foreign aid. 60 percent of the West Bank is still under full Israeli control. These areas are currently serving as military or environmental zones or occupied by illegal settlements, and the PA cannot serve the Palestinian population in these areas properly, neither with regard to security nor ensuring proper infrastructure and utilizing the economic potential.
For the PA to become independent of the support of the international donor community, it must be allowed to tap into the potential for economic growth that these areas hold. And the potential is substantial. Independent surveys suggest that The Jordan Valley could generate 1 billion dollars worth of industrial and agricultural output annually, and employ as many as one hundred thousand Palestinians. East Jerusalem has traditionally been the engine of the Palestinian economy.
Today, restrictions on movement of goods and people have severed ties between the city and the remainder of the West Bank, harming trade and economic growth. And the continued expansion of Israeli settlements, exemplified by the recent decision to add another 240 units to settlements on occupied territory, only adds to the separation of East Jerusalem from the West Bank. An expansion of PA-governance into these areas is necessary to secure economic growth and a sustainable Palestinian Authority.
At a time when direct talks have stalled over Israel’s decision to continue the expansion of illegal settlements, it is worth reminding that the stakes are high. The Palestinian state-structure is there, ready to assume statehood responsibilities. The donor community stands ready to carry its share of the burden in seeing the Palestinian state building process finalized. In the international community there is consensus that there is no alternative to the two-state solution. And that detailed final status negotiations over many years have dealt with many, if not most, of the critical issues. Norway strongly supports all initiatives to bring credible negotiations back on track, and support actions taken by the parties and the international community to underpin continued Palestinian state building efforts.