Palestinians plan to resurrect the pound from a six-decade hiatus if they manage to build a state, securing its value with a dollar or multicurrency peg, according to Palestine Monetary Authority Governor Jihad al-Wazir.
Wazir, the closest thing Palestinians have to a central-bank chief, also said in an interview that he was fighting to stop Hamas from tampering with Gaza Strip banks and to strengthen the financial system for a "tough" year ahead. For advice, he sometimes turns to Bank of Israel Governor Stanley Fischer.
"If you look at the history of central banks in third-world countries, they are full of broken dreams and economic and financial disasters," Wazir, 46, said Wednesday in Ramallah. "We have made so many sacrifices as Palestinians that we want our state not to be a failed state."
He said he hoped the new pound would become a strong symbol of independent statehood.
The Palestinian pound last circulated as legal tender in 1948, when the UK gave up its mandate over Palestine.
Wazir said he had discussed the idea of a currency peg with Fischer.
"One of the serious options would be pegging to the dollar," he said. "In one of my discussions with Stan Fischer, and he made this comment publicly as well, in terms of the long-term future, pegging to a currency on the way down is more conducive than pegging to a currency on the way up."
Wazir was born in the Gaza Strip four years before Israel captured the territory in 1967, according to the Palestine Monetary Authority's Web site. His father, Khalil al-Wazir, was assassinated in 1988, when he was Palestine Liberation Organization leader Yasser Arafat's top deputy.
While the father, known as Abu Jihad, ran operations against Israel from PLO headquarters in Tunis, Wazir studied electrical engineering at Marquette University in Milwaukee, Wisconsin. Later he earned a doctorate in business administration at Loughborough University in Leicestershire, England.
After returning to Gaza, he founded the Palestinian Internet Naming Authority and became managing director of the World Trade Centre Palestine, according to the authority's Web site. He later became acting finance minister and was appointed deputy governor of the monetary authority in 2006, rising to head the agency in January 2008.
One of the steps Wazir has taken in recent weeks to strengthen the banks is to increase their minimum capital requirement to $50 million from $35m.
About 20 commercial banks operate under supervision of the authority, including Bank of Palestine Plc, the biggest Palestinian lender, and Wazir expects some consolidation. One or two of the weakest could close by year's end, he said.
Founded in 1995, the authority is in the second year of a three-year plan aimed at creating a full-fledged central bank, Wazir said. For now, Gaza and the West Bank mainly use the Israeli shekel as a currency.
The authority, which will hold a ground-breaking ceremony for its new headquarters on Monday, is mainly concerned with bank supervision and overseeing payment systems. The office in Ramallah is atop an appliance store, with sales posters for refrigerators and washing machines in the lobby.
Among the trickiest aspects of Wazir's job has been maintaining supervision over the banks in Gaza since Hamas seized control of the territory in June 2007. It has periodically threatened to impose Islamic banking rules in the territory.
After attending a seminar discussion on deductive methodology with a retired officer from the IDF, Wazir said he had created a plan designed to keep Hamas from tampering with or taking over the banking system.
"I have a preapproved board decision," he said. "All I have to do is put in the date and we're shutting down the banking system in Gaza. The press release is already written."
Wazir's father's face stares from his computer desktop. He blames Israel for the killing; the Defense Ministry declined to comment.
"The revenge for the assassination of my dad will be the creation of the Palestinian state," Wazir said. "That's the ultimate revenge."
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