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Benjamin Netanyahu, Prime Minister of Israel addressed the United Nations General Assembly.

Benjamin Netanyahu UN General Assembly
Benjamin Netanyahu addressed the UN General Assembly.
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Is a Palestinian Statehood in the Near Future a Realistic Proposition?

February 8, 2011  |  Hadar Sela & Eli E. Hertz


On December 13th 2010 the European Union's Foreign Affairs Council issued a press release on the subject of its meeting held on the same day to discuss the Middle East Peace Process.[1] The document included the following clause:

"The EU commends the work of the Palestinian Authority in building the institutions of the future State of Palestine and reiterates its full support for their endeavours in this regard and the Fayyad plan. Recalling the Berlin Declaration, the Council reiterates its readiness, when appropriate, to recognize a Palestinian state. We welcome the World Bank's assessment that 'if the Palestinian Authority maintains its current performance in institution building and delivery of public services, it is well positioned for the establishment of a State at any point in the near future.' "

The reliance of the European Union upon the cited World Bank assessment, together with the fact that the World Bank is one of the members of the Quartet Task Force on Palestinian Reform which reports to the Ad-Hoc Liaison Committee [AHLC], makes an examination of the criteria and methodology employed, essential.

The World Bank:

In September 2010, the World Bank presented a report to the Ad Hoc Liaison Committee[2] which concluded with the words:

"In closing, we are encouraged by the reform efforts of the PA, the loosening of some restrictions by the GOI [Government of Israel] but concerned by the current fiscal difficulties faced by the PA [Palestinian Authority]. The latter, which are largely tied to donor support, are likely to continue if collectively we cannot find solutions to put the Palestinian economy on a more sustained footing. The PA's institution–building record is strong, positioning the society for the establishment of a state at any point in the near future.

"That said, those robust institutions will not be enough to underpin a viable state if there is not also a strong path to sustainable growth."

In the body of the report, the assertions made regarding the reasons for lack of sufficient growth in the Palestinian economy relate entirely to restrictions initiated by the Government of Israel, such as the limitations on the import of certain raw materials to and exports from Gaza, the limitations upon freedom of movement (checkpoints) in Judea and Samaria and the anti–terrorist fence, to which the World Bank had expressed opposition even before it was built.[3] Other factors cited include unpredictability as a discouragement to investment, the separation of eastern Jerusalem from Palestinian Authority controlled areas and the lack of Palestinian ability to exploit natural resources in Area C.

However, the report makes no serious reference to the very real Israeli Government concerns for the security of its civilians which, in light of bitter experience, brought about the movement and access restrictions in place today.

Neither does it acknowledge that the current status of Area C and eastern Jerusalem is a result of the Oslo accords signed by the Palestinian Authority and that the anticipated continuance of negotiations was terminated by the decision of Palestinian leaders to launch the second Intifada, known also as the "Terror War" that cost the lives of hundreds of Israeli civilians. Equally, no reference is made to the reasons for the current stalemate in negotiations on core issues such as the status of Jerusalem.

In fact, an uninformed reader of this report might remain completely unaware of the Oslo peace process, the past and ongoing terror attacks upon Israeli civilians, or the rift between Palestinian political factions which results in 40% of the Palestinian population living under a regime which does not participate in the Palestinian Reform and Development Plan.

Unfortunately, the September 2010 World Bank statement is not attributed to any particular writer, but one presumes that is was prepared by members of the World Bank Country Team which administers the Palestinian Reform Development Plan Trust Fund,[4] established as a result of the International Donors Conference for the Palestinian State held in Paris in December 2007.[5]

It was at the Paris Conference that the PA caretaker Prime Minister, Salam Fayyad, presented his Reform and Development Plan 2008–2010, otherwise known as the "Fayyad Plan," which was adopted by the conference and which forms the basis for subsequent World Bank appraisals of PA performance and assertions regarding readiness for statehood. However, the report presented by the World Bank to the Paris Conference[6] itself raises concerns regarding themes and methodology, which are repeated in both prior and subsequent reports and appraisals.

The report relies heavily upon reports and contributions from the non–independent Palestinian Central Bureau of Statistics [PCBS], the President of which is directly nominated by the PA Chairman, and which is directly accountable to the Palestinian Council of Ministers within the Palestinian National Authority. In an EU report, the President of the PCBS is reported as saying that:

"The current situation in the country puts the NSI [National Statistical] and the NSS [National Statistical System] at large in a very difficult situation, with minimum options for surviving and maintaining professional ethics."[7]

An additional source used by the World Bank in its report for the Paris Conference is the United Nations Office for the Coordination of Humanitarian Affairs [OCHA]. As pointed out by NGO Monitor in relation to a previous World Bank report[8] using the same source, the use of highly politicised groups has become a feature of this and other World Bank reports.

 "OCHA's biases and inherent lack of credibility reflect those of its employees, including Allegra Pacheco, who heads the Information and Advocacy unit at the UNOCHA in Jerusalem. Before taking this position, Ms. Pacheco was deeply involved in radical anti-Israel campaigning, and this ideology and core bias is reflected in OCHA's publications, including ReliefWeb, which helps give additional publicity to claims by politicized NGOs, [as documented by NGO Monitor]. Many of Pacheco's speeches and writings including oped articles use the rhetoric of demonization to refer to Israel, such as "apartheid", "collective punishment", etc., while blatantly erasing the context of Palestinian terror. In September 2000, Pacheco addressed a pro–Palestinian political rally in Washington DC, whose official slogan was "No Return – No Peace" and urged the dismantling of the Jewish state. Pacheco called for the abolition of Israel, declaring "The solution is Awda, complete and unrestricted return to Palestine, all of it from the Jordan River to the Mediterranean Sea."[9]

Other political NGOs used as sources of information for World Bank reports include B'Tselem, Peace Now, HaMoked, Bimkom and Amnesty International. In a 2008 report submitted to the Ad Hoc Liaison Committee[10], credits for 'active contributions' were given to most of the above organizations, along with Gisha, Yesh Din, Physicians for Human Rights and the IPCRI [Israel–Palestine Centre for Research and Information], the leader of which, Gershon Baskink – who apparently favours an "imposed solution" rather than negotiation – claims to have negotiated with the US with regard to waiving its UN Security Council veto in the event of a proposal to accept a unilaterally–declared Palestine as a member of the UN and seemingly is enthusiastic about the prospect of the UN sending a coalition of troops to the region in order to impose a solution on Israel.[11]

Also acknowledged in the 2008 report is Ben–Or Consulting, an employee of which, Didi Remez, is also credited with contributing to the preparation of the report. One of the founders of Ben–Or Consulting was Jeremy Ben Ami; to date the president of the controversial lobbying organization J–Street and still a shareholder in the firm. Didi Remez is a founding member of Yesh Din and provides consultancy services for many of the political NGOs listed above, as well as the World Bank itself. Remez is also a frequent participant in demonstrations organized by far–Left and sometimes anti–Zionist groups.

The Palestinian Reform and Development Plan:

Due to the fact that the EU decision to recognize a Palestinian state "when appropriate" is based upon the World Bank assessment that the Palestinian Authority is "well positioned for the establishment of a State at any point in the near future," and because this assessment is being based upon the periodic appraisals of the implementation of the Reform and Development Plan 2008–2010, it is necessary to examine the content of that plan as a basis for state–building.

Since its establishment in 1994 the Palestinian National Authority has been financed by donor contributions and its financial affairs overseen by the IMF [International Monetary Fund] and the World Bank. Despite tutorage from international financial institutions, some $900 million of revenues were diverted by Chairman Arafat to non–PA bank accounts between the years 1995 to 2000, very little of which was recovered.[12] Concerns raised by the international community at various Ad Hoc Liaison Committee conferences were ignored by the PA until the IMF Resident Representative Dr. Salam Fayyad initiated a plan of reform in 1999. However, the proposed reforms were not fully implemented and a second wave of reform had to be initiated in 2002 when Salam Fayyad was appointed as Minister of Finance to the PA.

Also in 2002 the Quartet, comprising the EU, US, Russia and the UN as represented by UNSCO [Office of the United Nations Special Coordinator] was formed. This body instigated the Task Force on Palestinian Reform, made up of the Quartet, Japan, Norway, the World Bank and the International Monetary Fund. Its role is to monitor and support the implementation of Palestinian civil reforms, and to guide the international donor community in support of the Palestinian reform agenda. The Task Force works with and reports to the Ad Hoc Liaison Committee – a product of the Oslo Accords established in 1994 to co–ordinate donor assistance and projects. It is chaired by Norway and the World Bank is the secretariat.

In 2003 the Quartet produced the Roadmap,[13] which stressed, along with additional issues, Palestinian institution building and was designed to be performance–based and monitored by the Task Force. Areas where reform was considered necessary within the PA were financial accountability, market economy, local government, ministerial and civil service, judiciary, elections and civil society.

However from the outset, the performance-based Roadmap, designed to progress in modular stages, was plagued with setbacks. Even its initial clause has yet to be implemented:

 "Palestinian leadership issues unequivocal statement reiterating Israel's right to exist in peace and security and calling for an immediate and unconditional ceasefire to end armed activity and all acts of violence against Israelis anywhere. All official Palestinian institutions end incitement against Israel."

Despite this, the international bodies continued to support the PA financially and to concentrate on Palestinian institution building and reform rather than the obvious building blocks of a real peace agreement. A 2005 World Bank report[14] states that "[a]s in 2004 the Quartet has had limited success in persuading either party to abide by its Roadmap commitments" and yet whilst it admits that "some (Palestinian terror) groups refuse to be bound by the ceasefire negotiated by the PA in early 2005, and violence has not ceased" it still continues to apportion the blame for the lack of growth in the Palestinian economy upon Israeli security measures.

In fact, a universally held premise which runs through all World Bank reports to the AHLC appears to be that Palestinian violence is a result of economic hardship caused by Israeli actions. It is impossible to find any attempt on the part of the World Bank as advisor and field reporter to the institutions supposedly steering the peace process to address the subject of the ideology behind Palestinian terror, let alone its religious and political roots.

Even following the Israeli disengagement from Gaza in 2005, the PA elections of 2006 and the June 2007 violent Hamas coup in Gaza, with the splitting of the PA and the formation of a caretaker government, World Bank reports still continued to focus upon the limitations on Palestinian freedom of movement as the main obstacle to economic regeneration, and therefore peace, with remarkably little attention paid to the Hamas rocket attacks upon southern Israel and their inevitable and predictable consequences.[15]

It was in the aftermath of the implosion of the PA following the Hamas coup in Gaza that by then, Prime Minister (albeit unelected) Salam Fayyad presented his Reform and Development Plan 2008–2010[16] to the Paris Conference and received international support for his initiative. World Bank monitoring of the success in implementing this plan forms the basis of recent assessments regarding the PA's readiness for statehood.

The Reform and Development Plan focuses on issues of economy, finance and infrastructure of government and social services. Many of the areas cited for attention and improvement are exactly the same ones as those highlighted in numerous previous reports and reform plans such as government transparency, financial accountability, local government reform, the development of the private sector, the reduction of the number of employees in the public sector, pension reform, the rule of law and judicial reform. As in the past, the implementation of the Reform and Development plan hinges entirely upon continued foreign financing of the PA.

Despite the fact that the Fayyad plan focused upon many areas which have been highlighted as being in urgent need of reform since well before launch of this latest initiative, and despite the impressive amounts of donor aid allocated to the project of Palestinian state building, it is evident from the World Bank's Third Quarter 2010 report[17] that although the three years allocated under the Fayyad plan have come to an end, the PA's success in meeting its objectives has been limited.

The report indicates that the PA's fiscal position did not improve, with revenues below budget targets, development spending significantly larger than its financing, wage expenditure above budget and increased arrears due to borrowing. An independent study by economic analyst Eyal Ofer and financial consultant Adam Roiter[18] indicates that over 60% of the PA's GNP comes from donors such as the US, EU, UN and World Bank and that during 2009 and 2010 the PA's reliance upon donations actually increased, with a 20% growth in donations, despite which it was not able to balance the budget. By contrast, in the year 2000, donor aid made up 10.47% of the PA's GNP and at the Fayyad plan's starting point in 2007 – 35.9%. The study points to the fact that donor aid is being used to finance government and administration rather than being invested in development projects which would promote the building of a sustainable Palestinian economy – a point which calls into question the claims of Palestinian economy growth as publicized by the IMF when such growth is based upon donations rather than an independent functioning economy.

In addition to the failure of the PA to meet the economic, financial and administrative goals specified within the Palestinian Reform and Development Plan, it is equally important to examine the PA's performance on other issues which are no less vital in the process of state building. The long succession of World Bank reports and the Fayyad Plan itself fail to address subjects such as the PA's Human Rights record, freedom of the press, freedom of Trade Unions, corruption and government–sponsored incitement against Israel.

Equally, the fact that according to the Palestinian Basic Law[19] (which functions as a temporary constitution), elections both for the PLC [Palestinian Legislative Council] and the presidency are long overdue and in effect the Palestinian leadership currently functions without a legitimate mandate, is ignored in all World Bank reports, as is the fact that the PA does not have control over the Gaza Strip which is home to some 40% of the Palestinian Arab population. In fact, Professor Yezid Sayigh, case study author for the World Bank's West Bank & Gaza team, is reported to have stated[20] in March 2010 that:

 "Everyone I talk to who knows about the West Bank thinks that Hamas enjoys huge support there, and were it not for Israel's overarching control there and the continuing Israeli raids into the supposedly Palestinian–controlled areas, Hamas would take over. People there support Hamas even though they also appreciate the relative normalization of daily life that the Fayyad government has brought."

Highlighting yet another aspect of the problematic method of basing reform of the Palestinian Authority on one man alone, commentator Khaled Abu Toameh pointed out in April 2010 that Salam Fayyad not only lacks credibility on the Palestinian street, but that when he and his political party stood for election in 2006, they gained less than 2 percent of the votes.[21]

In short, the World Bank's long history of almost exclusive concentration in its reports to the AHLC upon fiscal and administrative matters within the PA, together with its overriding tendency to blame Palestinian economic difficulties solely upon Israeli actions and policy, most likely due to the unfortunate habit of collecting disproportionate numbers of assessments and opinions from politically motivated sources, has lead it – along with the EU – to believe that the PA is ready "for the establishment of a state at any point in the near future" despite the obvious existence of numerous very worrying factors.

In the 2011 Freedom House report,[22] both the Gaza Strip and the West Bank are categorized as "not free" with the former scoring 6 on political rights and 6 on civil liberties, and the latter 6 on political rights and 5 on civil liberties (7 being the lowest score – least free – and 1 being the highest – most free). These findings correlate with the reports coming out of both regions on subjects such as the persecution of religious minorities and homosexuals, the erosion of women's rights and the lack of freedom of the press.[23]

The last Global Integrity report[24] (2008) – indexing governance and corruption – on the Palestinian Authority-controlled areas rated them as "very weak," stating that:

"Civil society, government accountability, administration and civil service, and the rule of law are all rated as very weak. Other bad news includes an ineffective audit institution, weak regulations on political financing, and a lack of institutional mechanisms through which citizens can gain access to public information."

A 2010 report by the International Foundation for Electoral Systems[25] severely criticizes the illegal cancellation by the Palestinian Cabinet of local elections due to be held in the Palestinian Authority – controlled areas in 2010.

An additional important factor which is repeatedly ignored by the World Bank in its reports is the Iranian support of the Hamas regime in the Gaza Strip, both in terms of funds and weapons, which obviously not only promotes the likelihood of conflict with Israel but forms the backdrop for some of Israel's security measures which the World Bank then goes on to criticize as impediments to the development of the Palestinian economy. It is estimated that Iran provides some $100 million per annum to Gaza itself, as well as unknown amounts of additional funds to the Hamas Political Bureau in Damascus for the purchase and shipping of weapons to Gaza.[26] By eliminating this factor from its analysis, the World Bank fails to address the subject of the roots of the ongoing conflict, both with respect to regional power struggles and the political and religious ideologies which make up the backbone of the conflict.

Any focus on security in the World Bank's reports is presented in terms of an assumption that past involvement in terror was a derivative of economic hardship and that relief from poverty will prevent regional violence in the future. This particular approach obviously ignores the numerous academic studies[27] which at most show poverty to be only one of several contributing factors along with religious fanaticism, nationalistic fanaticism, exploitation and psychological profiles, all acting within a specific social atmosphere sympathetic to terror. It also ignores the fact that terrorists do not act alone – they are the last link in a long organizational chain which goes back to the political and religious leaders who promote and finance terrorism and who rarely suffer from poverty themselves.

The obvious question to be asked, even if the World Bank's assumptions are to be taken at face value, is what guarantee is there that Palestinian citizens would not once more take to terror should their post–statehood (and hopefully donor–independent) economy encounter difficulties, as occurs even in the most developed and robust of economies? The World Bank and the Quartet can of course guarantee no such thing because they consistently ignore the climate created by PA-funded incitement[28] to terror and violence which is spread through the official media and mosques as well as the PA initiated glorification of terror as seen in the naming of streets and institutions after terrorists.

European Union Cognitive Dissonance:

It is clear that any near future recognition of a Palestinian state by the European Union or any other member of the Quartet would, under the present circumstances, be in contravention of the criteria and conditions for a peaceful solution to the conflict achieved through negotiation – as they themselves set out in the Roadmap.

Beyond this, it is also clear that the European Union, in its readiness to accept the status quo as currently found within territories administered by the PA as being sufficient for the establishment of a state, applies very different standards to   and has much lower expectations of – a Palestinian state than it has for the citizens of the nations wishing to join its own august ranks.

It is interesting to compare the European Union's standards when applied to the subject of the accession of Turkey to its ranks with those it finds sufficient for a Palestinian declaration of statehood.[29] The Turkish application for accession was made in 1987 and was recognized as a candidate for full membership in 1999. Negotiations commenced in 2005 and it is generally accepted that they will last at least a decade, although in 2006 European Commission President José Manuel Barroso estimated that the process could take at least until 2021. Since then, negotiations have hinged on Turkey's fulfilment of the Copenhagen criteria [30] and the 35 chapters of the acquis communautaire or EU law. EU demands for change within the Turkish system include the issue of Cyprus, the peaceful settlement of border disputes, as well as economic reforms and a very long list of political and social reforms including freedom of religion, women's and children's rights, labour and trade union rights, protection of minorities, prevention of torture, access to justice and freedom of expression.[31]

In other words, a total overhaul of the legal, political, judicial, fiscal, economic and social systems is demanded even before the subject of Turkey's membership can come up for vote. The contrast between the detailed and in–depth EU progress reports[32] which monitor the ongoing reforms in Turkey and the superficial reports on the PA as presented by the World Bank is particularly striking. Assessments of Turkey's progress are performance–based [as was supposed to be the case with the Roadmap] and the 10 to 15 year accession process of a country already considered trustworthy enough to be a NATO ally can be reversed if deemed necessary by the EU.


Europe, of course, has the right to demand and ensure that before it accepts Turkey as a member of its Union, that country is capable of economic independence and stability and that it lives up to standards of democracy and rule of law, civil, political and social rights.

Israel has just as much right to demand from the EU and other Quartet members not to be forced into accepting a Palestinian Arab state on its borders which they themselves would not accept as a functional country.

The accession of a country to the European Union is an act of political and economic consequence which can be both enforced and monitored. The creation of a new country is an irreversible process about which very little can be done if it subsequently turns into a rogue state. The current fractured political map within the Palestinian Authority and the alliances of the terror group Hamas with extremist Islamist elements, Iran and other terror organizations indicate that this is a very real possibility.

At present, the international community, including the EU and the rest of the Quartet, is adopting a disturbingly low standard by which to judge PA readiness for statehood and should it continue upon its present course, it is highly unlikely that the creation of such a state will lead to the stability and prosperity so badly needed by the Palestinian Arab people, let alone bring about an end to the regional conflict.

All quotes included in this document are taken verbatim from the given source.









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[12] See Chapter V


























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