Salam Fayyad
The Financial Times (Opinion)
December 14, 2008 - 1:00am

A full year after the Annapolis process began and with only two weeks before the end of 2008 – the target date for reaching a comprehensive Palestinian-Israeli agreement – one cannot but be disappointed that Palestinians and Israelis have yet to reach their shared goal of lasting peace. We Palestinians had also hoped that we would have had more to show on the ground for our commitment to the peace process.

Since the Annapolis conference was held in November 2007, Palestinian frustrations have mounted as Israel has accelerated its settlement construction in the occupied Palestinian territory, increased its demolition of Palestinian homes and intensified its siege of Gaza, all in violation of international law and recently renewed commitments.

Nevertheless, the Palestinian Authority remains steadfast in its peaceful pursuit of independence. Central to our approach is the idea that economic development is critical to the success of our state-building project. That is why events such as the Palestine Trade & Investment Conference, which opens in London on Monday, are so important.

Economic development is crucial to demonstrate to our people, particularly our youth, that diplomacy delivers what violence does not. Weariness with a seemingly endless peace process has caused many Palestinians to question the value of negotiations. Since the Oslo accords were signed in 1993, conditions have worsened for ordinary Palestinians. The Israeli settler population in the occupied territory has doubled; segregated road systems have been developed, roadblocks and checkpoints erected, olive groves torched; and an ugly wall is now snaking its malevolent way through the West Bank.

If the Annapolis process is to succeed, this pattern will have to be reversed. We are fighting to keep our people on the land: improving the plight of those hardest hit by the occupation; encouraging those who have the means to leave to stay; and enticing those in the diaspora to invest in their country. That is why the PA is working diligently to restore law and order and to bring economic stability and prosperity to the Palestinian people where we can as fast as we can.

Our reform and development plan includes investment in relatively low-cost, quick-impact community development projects. Their popularity has surpassed my expectations. They began with a budget of $36m (€27m, £24m). This has now swelled to $273m as more communities learn of the success of the projects and request their own. We now have 1,100 projects at various stages of implementation, with 300 already complete.

These initiatives have yielded other, less anticipated outcomes. Community residents are coming together in town hall meetings to discuss and agree upon the projects that they need to improve their lives. Companies are then being recruited in transparent bidding processes to turn plans into reality. In turn, community-level decisions are informing and shaping our national development plans, compelling regular reassessments and readjustments. Thus, an exercise in democracy, ownership and empowerment is under way.

While the PA is committed to creating the conditions conducive to private investment, only the private sector can propel Palestine into sustainable economic growth. This will require the removal of Israeli restrictions on Palestinian movement. Nevertheless, Palestinian enterprises have already demonstrated a remarkable ability to withstand, and even excel in spite of, the adversity created by Israeli settlement and occupation policies.

None of the PA’s development projects would have been possible without the interest and support of international donors and investors. But if foreign investment is to be effective, it must also be responsible. Companies that trade with Israeli settlements or invest in settlement expansion are doing bad business: not only are they missing a golden opportunity to profit from Palestinian enterprise and expertise, they are also severely undermining our attempts to secure a viable two-state solution by supporting the obstacles that impede that objective.

Nevertheless, a word of caution is required. Sound economics alone will not bring peace and security to our region. Ours is a political conflict, and it requires a political solution. There is no economic substitute for attaining – and implementing – a just peace agreement. Focusing on so-called “economic peace” – instead of actual peace – simply won’t cut it. Economic growth, no matter how important, cannot quell the Palestinian people’s determination to reach freedom and independence.

At the end of the day, development and peace are mutually reinforcing: economic growth is necessary to propel the peace process forward, while both Israel and Palestine stand to benefit from greater investment and tourism once a peaceful, stable environment is secured. The path to peace is strewn with risks. But if we join together to take those risks, and invest in the future, we will all reap the rewards.


American Task Force on Palestine - 1634 Eye St. NW, Suite 725, Washington DC 20006 - Telephone: 202-262-0017