Madison-Rafah Journal

Economic sanctions are keeping Palestinians from building a life

Salam Fayyad, Los Angeles Times, March 31, 2007

TWO WEEKS AGO, I became the minster of finance for a people whose economy has all but collapsed. It was the start of business for the new Palestinian unity government, born after months of tricky on-again, off-again negotiations and amid economic sanctions, bloodshed and misery.

The government came together after a bad year for the struggling Palestinian Authority. Our economic difficulties grew much worse during that period, in the aftermath of a free and fair election that brought Hamas to power. Because Hamas' political platform did not conform to key elements of the peace process, including Palestinian recognition of Israel's right to exist and a commitment to renounce violence, the international community imposed sanctions on the Palestinian Authority.

Although much of the discussion leading to the formation of the unity government has focused on these two commitments, their validity should not have been much in question. After all, these commitments were made by the Palestine Liberation Organization, the legitimate representative of the Palestinian people, in a crystal-clear and binding agreement in 1993, and no Palestinian government has the authority to revoke them. In fact, the unity government's platform explicitly states that it will honor all PLO agreements, which, to be sure, include these two commitments.

As someone who has long worked for peace and reconciliation with Israel — a peace based on mutual recognition of each people's rights — I have always subscribed to the PLO's political program and all the commitments it embodies, including the recognition of Israel's right to exist and the renunciation of violence. I still do. My top priority is to lead the effort to end the economic sanctions and to restore the integrity of our public finance system.

A harsh and painful year after the onset of the sanctions, staggering poverty and unemployment rates prevail. Today, almost two-thirds of the Palestinian population lives in poverty, with per-capita income at 60% of its level in 1999. But as Thomas Jefferson said: "If we are to dream, the flatteries of hope are as cheap, and pleasanter, than the gloom of despair." As a Palestinian, I have a duty to hope and to work tirelessly to make the dreams of my people a reality.

We Palestinians dream of living normal lives. We dream of an end to the days when Palestinian farmers in the West Bank watch their crops destroyed to make way for Israeli-only roads, an end to the days when Palestinian children must brave Israeli military checkpoints to get to school and an end to the days when Gaza's 1.4 million Palestinians are sealed inside their territory, cut off from the rest of the world. Like all people, we deserve freedom in our own land. We deserve democratic, transparent and accountable institutions. And we deserve to live in peace and economic cooperation with all our neighbors, including Israel.

Over the years, the international community has encouraged and supported Palestinians in building democratic institutions to serve as the foundation of our future state. Donor assistance helped pay for the building of schools, hospitals and roads in addition to supporting good governance and providing the know-how to create a functioning administration.

In my previous term as finance minister, from June 2002 to December 2005, I played a leading role in establishing transparency and accountability in government finances through the introduction of a series of deep, wide-ranging reforms that helped bring our public finance system up to international standards. These included the consolidation of all government revenues in the Ministry of Finance, the elimination of extra-budgetary spending and the regular publication of detailed financial statements.

Since the international sanctions were imposed, aid has continued to flow, which has helped prevent starvation. But by channeling funds so that they bypass the Ministry of Finance, donors have unintentionally contributed to reversing these institution-building gains. The money coming in can no longer be traced, and we cannot ensure that it is not being misappropriated.

Also, our dependence on foreign-aid handouts is increasing while our economic development is stifled. In 2005, for example, only 16% of European Union aid to Palestine was classified as humanitarian. Last year, that figure rose to 56%.

We do not aspire to be a beggar nation, dependent on the world to feed our people. We have the capacity, education and talent to build a thriving economy and a strong democracy. But we cannot do so while Israel seals our borders and withholds tax revenue it owes us, or while U.S. banking regulations prevent banks from handling government business.

In order that we may begin again to develop the institutions and systems that will make us self-reliant and that will buttress the foundation of our future state, the sanctions must be lifted.

The U.S. has long acknowledged — as has the entire world community — that the formation of a viable, independent Palestinian state on the West Bank (including East Jerusalem) and the Gaza Strip is the way out of this nearly 60-year-old conflict. But until the international community demonstrates the political will to help bring about a comprehensive settlement — one that will grant Palestinians the freedom to build our own economy and institutions in our own land — we will all continue to pay the price. Despair will continue to erode hope. And, lest we forget the words of Jefferson, hope is indeed "as cheap, and pleasanter."

SALAM FAYYAD is the minister of finance in the Palestinian unity government.

Copyright 2007 Los Angeles Times