Last month, in two separate reports, the World Bank and the International Monetary Fund (IMF) corroborated what the Palestinian private sector has been saying for years, that the hope for sustainable economic development in the West Bank, as well as East Jerusalem and Gaza, is being structurally stymied by the Israeli government.
The World Bank report qualified the oft-observed growth in the Palestinian Authority by noting that the growth comes, in part, via “large inflows of donor assistance…Sustainability of the growth, given the reliance on donor assistance, is a cause for concern.” This “concern” should be shared by all involved, particularly President Obama as he contemplates what to do next. The World Bank’s analysis did not shy from next steps when it asserted, “the largest impediment to private sector investment in the West Bank and Gaza remains the restrictions on movement and access to resources and markets imposed by the Government of Israel (GoI).”
The international community seems more determined than ever to undo the Gordian knot created between Israelis and Palestinians over the past several decades. This comes not a moment too soon, at a truly decisive crossroads both politically and economically. So long as Israel’s military occupation remains in place, serious progress for investment in Palestine requires an intention – on the part of all stakeholders, including the occupier – to permit development to happen.
I manage the Palestine Investment Fund (PIF) – a publicly-owned investment company with an independent board and transparent governance system. PIF invests in Palestine’s future through an investment strategy focused on value creation. PIF is the national incubator of several strategic investment initiatives and a major contributor to building Palestine as the Middle East’s new “startup” nation.
The PIF has developed and is currently implementing an ambitious US$4 billion investment program which aims to create over 100,000 jobs in the private sector. Yet Israel’s complete control of our movement and access stifles job creation and upholds a choking dependency: Palestine’s airports, seaports, and bridge crossings – the gateways to world trade – are not under our control. Without control of our economic gateways, the task of building an economic foundation for statehood is daunting.
Palestinian President Mahmoud Abbas’ vow to breathe economic life into the notion of “viable” (as in a viable Palestinian state), however, inspires investment today for the post-occupation era.
Economic Viability
Palestine does not intend to remain dependent on donor handouts. As the Palestinian government painstakingly proceeds with public institution building, a parallel dynamic is underway – this one aiming to upgrade the Palestinian economy and make it competitive and economically integrated, both regionally and internationally, by incubating the development of several leading companies.
Our strategic projects are diverse, ranging from natural gas extraction from the seacoast off Gaza to affordable housing, including in areas currently designated as “Area C” (the 60 percent of the occupied West Bank remaining under full Israeli military and administrative control), and development of our tourism markets in Jericho, the Dead Sea, and East Jerusalem. These are live projects being implemented today. However, until the Israeli occupation is rolled back, these projects also share a common bottleneck – they require the international community’s support to obtain the necessary Israeli approvals.
Every strategic economic initiative we launch contributes to improving the quality of life across Palestine. Economic development cannot replace a political resolution to the conflict that provides full Palestinian freedom. But such development can tangibly reduce tensions and build much needed confidence between the parties so long as it’s not used by Prime Minister Netanyahu as a means to postpone Palestinian aspirations by giving the false appearance of substantive political movement.
Moving Forward
If allowed to succeed, our economy is poised to take its natural place in the community of nations. Palestinians, with their economic partners, are ready to change the economic reality in their cities, starting today. Unlock the gates and watch it happen.
The international community and President Obama have repeated their full commitment to realizing a free, viable and independent Palestinian state alongside Israel. The mantra of a viable Palestinian state, however, only acquires significance when joined to an economic program restoring Palestinian economic life and integrating us with the global economy. From our side, we stand ready with capital, labor, know-how and an open invitation for partners in these state-in-the-making endeavors.
Beyond the facilitation of our economic development while under occupation, our long-awaited independent statehood will ultimately allow us to reach new trade arrangements and establish our own gateways to the world.
The missing ingredient is the requisite political will from the international community – and the Quartet in particular – to assist us in building a new Palestine.
Dr. Mohammad Mustafa is CEO of the Palestine Investment Fund and Economic Advisor to Palestinian Authority President Mahmoud Abbas.
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