Norway chairs the donor support group to the Palestinian Territory. We are taking the floor today to draw attention to the dangers threatening the foundations of a viable Palestinian State. And to point out that removal of these dangers and obstacles could clear the way for the Palestine State without any further delay.
In recent years we witnessed unprecedented progress in the quality and functioning of Palestinian institutions, high levels of growth, improved living conditions and security in the West Bank, and the revival of hope for the people. These positive trends were halted in 2011 and are now being reversed. Now, early in 2012, reduced international financial support and shrinking private sector investment increase the budget deficit and create an acute liquidity crisis for the Palestinian Authority. Furthermore, the Israeli occupation undermines the potential for growth. In particular, the Israeli restrictions of access for Palestinians hamper economic activity in Area C of the West Bank.
Norway is gravely concerned about the continued expansion of Israeli settlements in the West Bank and East Jerusalem. The settlement activity is illegal under international law and a lethal threat to the two-state solution. The parties have the opportunity to prove their commitments to a two-state solution through concrete actions on the ground. In continuing settlement activities, Israel is doing the opposite. Israel must stop all settlement construction.
The deep impasse between the parties cannot endure without undermining the vision of the two-state solution. This is also why the efforts of Jordan to facilitate talks within the framework proposed by the Quartet are so important and must be supported.
The donor support group will reconvene in Brussels on 21 March this year. The meeting will discuss how we can enhance the sustainability of the Palestinian Authority, how private sector-led growth can be strengthened in the Palestinian economy, and how the situation in Gaza can be improved.
These four points are essential:
First, Palestinian revenues must be increased by a widening of the tax base and improved tax collection. Two thirds of these revenues are collected by Israel and subsequently transferred to the Palestinian Authority each month. There is scope for improving the efficiency, transparency and predictability of this mechanism.
Second, Israel must take further steps to ease restrictions on access and movement on development, trade and exports in the West Bank and Gaza. Restrictions, in particular those in Area C, including East Jerusalem, reduces the space in which the Palestinians can sustain their livelihoods. According to the UN, today 43% of the West Bank is essentially off-limits for Palestinian use. Palestinians must be able to utilize their natural, productive and land resources in area C which are crucial for a viable Palestinian economy.
Third, the donors must continue to provide assistance for covering Palestinian recurrent costs for a transitional period in the time ahead. Without such assistance it will be difficult to ensure the long-term viability of the Palestinian Authority and the readiness of the Palestinian institutions for statehood.
Finally, Gaza. UN Security Council resolution 1860 calls upon Member States to support international efforts to alleviate the humanitarian and economic situation in Gaza, and it condemned all violence and hostilities directed against civilians and all acts of terrorism. While important progress has been made regarding the import of goods and the implementation of infrastructure projects, these improvements are not sufficient to provide the economic growth that would realize the full economic and social potential for the population in Gaza. At their next meeting, the donors must take further steps to find a solution within the framework of Security Council resolution 1860 that lifts the closure and ensures movement and access through the legitimate crossing points, while also taking security challenges into account.