World Bank building entrance 370.
(photo credit: Wikimedia Commons)
Israel is expected to come under pressure Sunday at the biannual meeting of the
Ad- Hoc Liaison Committee to free up development for the Palestinian Authority
in Area C, the area in the West Bank under full Israeli control.
instance, a report on the economic situation in the PA written in advance of the
meeting by the World Bank, concluded that “the continued geographical
fragmentation of Area C [envisaged under the Oslo Accords as a temporary
arrangement], poses a binding constraint to real economic growth, essential to
support the future Palestinian state.”
The report said Area C “is the key
to economic cohesion and is the most resource-abundant space in the West Bank
holding the majority of the territory’s water, agricultural lands, natural
resources and land reserves that provide an economic foundation for growth in
key sectors of the economy.”
According to the report, the only way for
the PA to get out of its current fiscal crisis – in addition to continued
financial support by the international community and reform efforts by the PA –
is to significantly ease obstacles on the Palestinian investments in Area C. For
example, to build its economy, the report read, the Palestinian private sector
needed access to land in Area C.
One Israeli official responded to the
World Bank’s conclusions regarding Area C by saying they were as predictable as
they were shallow. “Of course they are going to blame the fiscal crisis on
Israel,” he said.
He continued, “There is not one word that Hamas took
Gaza, depriving the PA of access to the sea. There is no mention that the PA
pays salaries to workers in Gaza, but gets not a penny back in tax revenues, or
that Qatar and Saudi Arabia are withholding promised millions of dollars because
of squabbles with [PA President Mahmoud] Abbas.”
The 1995 Interim
Agreement between the PLO and Israel divided the West Bank into three areas of
civil and security control.
While Areas A and B fall under various levels
of Palestinian control, Israel maintains full control over Area C, which
represents some 62 percent of the territory, but is mostly rural and includes
only 6% of the Palestinian population.
Israel argues that the final
dispensation of Area C was to be dealt with under the accords in final status
negotiations, which never happened.
“If the Palestinians want to develop
Area C, they need to negotiate,” one official said. “We can’t just say,
‘do what you want there’ – this necessitates security arrangements, agreements
on exploiting resources and accords dealing with the transfer of goods, money
Development of Area C is a political decision that can only
be taken within a framework of the political negotiations, the official said.
“The World Bank ignores this necessary framework.”
The Foreign Ministry,
which will be represented at the meeting taking place on the sidelines of the UN
General Assembly meeting by Deputy Foreign Minister Danny Ayalon, released on
Wednesday the report it will present to the PA’s donors.
While the World
Bank report placed a heavy part of the responsibility for the PA financial
crisis on Israeli obstacles to Palestinian development of Area C, the Israeli
report said the crisis was caused by the shortfall in donor aid and the PA’s
overspending of its 2011 budget.
“The public finance management system’s
role in the current crisis may undermine its track record as a system that meets
the requirements of a well-functioning state,” the report stated.
Israeli reports also said that Israel has been forthcoming in Area C, and has
approved 328 projects there.
According to the report, some of the
projects were submitted by the PA, some sponsored by the international community
and some initiated by the Civil Administration.
“Israel welcomes the
international community’s support for approved projects in Area C and calls for
a coordinated application process through the legal procedures and the Planning
Committee,” the report read, giving an understated voice to Israeli frustration
at Area C projects being pushed forward by some countries without first
obtaining Israeli approval.
The Israeli report also underlined the degree
to which the fall of Gaza to Hamas has been a heavy drain on the PA economic
The Gaza Strip is outside of the PA’s reach, the report
“Despite this, the Gaza Strip places a significant financial burden
on the PA, accounting for more than 50% of the PA’s total expenditures.”