Wishful thinking

The Paris Donor Conference may make the Palestinian Authority richer but it cannot improve the economy of a no-state under Israeli occupation, writes Khaled Amayreh from East Jerusalem

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While the Palestinian Authority is euphoric about the more than $7 billion pledged by the Paris Donor Conference to help rebuild the ravaged Palestinian economy, many Palestinians remain sceptical about whether such a goal is possible under military occupation.

Monday's one-day donor conference was attended by representatives of more than 90 countries. Islamic and leftist camps within Palestine, though, view the Paris pledges as little more than an attempt to buy political concessions from a Palestinian government almost entirely dependent on international aid. Their scepticism will only have been reinforced by the continued killing of Palestinians by the Israeli army -- 10 Palestinians were murdered on Monday alone -- and by relentless settlement expansion in the West Bank, especially in and around East Jerusalem.

Ramallah-based economist Adel Samara dismisses hopes for genuine economic recovery under the Israeli occupation. "It is akin to trying to breed fish in toxic water," he says, alluding to restrictions imposed by the Israeli army on free movement of individuals, goods and services within the West Bank and the hermetic blockade of the Gaza Strip.

"Israel, not the PA or even the international community, holds the key to the success or failure of the Palestinian economic recovery plan. And Israel will only be cooperative if the PA makes political concessions."

Palestinian Authority President Mahmoud Abbas, now enjoying unprecedented international backing, recognises this reality, if somewhat begrudgingly. Addressing the Paris conference, he did not seek to conceal his fears that Israel could easily "rock the whole thing" if it continues to foster an atmosphere of terror and repression in the West Bank.

There have been no indications Israel is about to reconsider its repressive measures against the Palestinians in either the West Bank, the seat of the PA regime, or in Gaza, where a million and a half Palestinians have been effectively cut off from the outside world.

In an interview from Paris with the Maan News Agency Abbas's prime minister, Salam Fayyad, underscored that Israel would make or break the PA's economic plan.

"The Palestinian economy is fully under the Israeli occupation's control," he said. "Israel controls all the borders and border crossings of the occupied Palestinian territories. Not a needle can get in or out of the West Bank without an Israeli consent."

Despite repeated calls for an end to crippling restrictions, Israel has been unwilling to remove any of the 650 roadblocks in the West Bank that make normal economic activity impossible. Coupled with the siege in Gaza, which many observers describe as slow motion genocide, the Palestinian Economic Plan could easily prove to be still-born.

According to Reuters, Hamas, which gathered nearly half a million people to celebrate the group's 20th anniversary, has called the Paris conference a "declaration of war on Hamas".

Hamas leaders have lambasted the PA for repeating the same blunders of Oslo.

"With all the money in the world you can't do anything if you have no control on the ground, if you can't travel freely and move freely. You can't even move a truckload of potatoes from Jenin to Hebron," said one Hamas leader.

Palestinian lawmaker Hanan Ashrawi is not so convinced. She told Al-Ahram Weekly that the fate of the Palestinian Economic Plan doesn't automatically depend on what Israel may or may not do. "If we play our cards cleverly we could generate enough international pressure on Israel. Besides, Israel is already blackmailing us and killing us on a daily basis. It doesn't need an economic incentive to do that."

Ashrawi points out that peace and stability in Palestine are high on the international agenda and she believes the world will not sit idly by and allow Israel to scuttle all hopes of a settlement.

Interestingly, she says, Israel has for some time been pushing for the Palestinian economy to be given more attention. Not that this reflects any genuine concern over the Palestinian's prosperity. Rather, Israel hopes that the generous pledges made at the Donor Conference will eventually lead to either of two scenarios. Israeli officials, including Foreign Minister Tzipi Livni, hope that any boost to the economy in the occupied territories might eventually induce the Palestinian leadership to exercise more "political flexibility" in final-status talks, which will include issues like the future status of Jerusalem, the final borders of a Palestinian state and the right of return for five million Palestinian refugees. In the Israeli lexicon "political flexibility" is synonymous with Palestinian willingness to abandon their demands for a complete Israeli withdrawal from the West Bank and a just resolution of the refugee plight.

Under the second -- there's no such thing as a free lunch -- scenario Israel hopes that the international community will pressure the PA to show "the required flexibility" through financial inducements.

If many Palestinians are dubious about the possibility of any economic recovery, they are also worried that in the absence of complete transparency the bulk of the money pledged will simply evaporate in the corridors of the notoriously corrupt PA regime.

Perhaps the only insurance policy against a recurrence of the kind of rampant corruption that became the PA's modus operandi during the 1990s is the person of Fayyad, who has gained respect for his competent administration of the PA's finances. Fayyad, though, has been facing increasing pressure from the Fatah organisation to resign, or at least act more compliantly when it comes to Fatah demands.

Corruption has been at the heart of the growing tensions between Fayyad and Fatah. A few months ago Fayyad fired thousands of Fatah operatives and activists who for many years had been receiving salaries while either sitting at home doing nothing or else occasionally arranging public activities for Fatah in the occupied territories.

It is uncertain if Fayyad will be successful in weaning these activists off the public payroll. The one thing that his attempts to do so have made clear is that financial transparency is not easy to impose in the absence of true democracy. Which begs the question on which bedevils all Palestinians: What on earth can democracy mean in the absence of a state?