By RON FRIEDMAN
Israel is stifling the Palestinian economy by implementing a "closure regime," and blocking it from developing export markets, the former Palestinian minister of national economy, Bassem Khoury, claimed Wednesday.
Speaking at a conference in Jerusalem, he said that the Palestinian Authority was at risk of failing economically due to reduced donations from foreign countries and the continued Israeli blockade on Gaza.
Khoury spoke at a conference held by the Israel-Palestine Center for Research and Information, a joint public policy think-tank. The conference was dedicated to Palestinian economic priorities.
"The Palestinian economy is missing $250 million to complete the year," said Khoury. "The major reason is a 55% drop in the foreign aid as compared to 2008.
"One wonders how this whole dream of changing reality crumbled to where it is now," said Khoury, who recently resigned from the Palestinian government due to its delay in endorsing the Goldstone Report.
Khoury said that the Palestinians ought to be proud of three government achievements: bringing law and order back to the streets, the engagement with the international community and the $800 million stimulus package it introduced to help face the global economic crisis.
"The Palestinian government was the first government to take such a measure, which saved us from collapse," said Khoury.
Khoury said that Prime Minister Binyamin Netanyahu's attempts to promote "economic peace" were worthless without a political agreement.
He said that the economic path was the same route that was attempted during the Oslo peace process and that it failed then too, because it didn't address the vital issues at the heart of the conflict.
"Palestinians will not accept anything less than 23% of historic Palestine. I have reconciled with the fact that I won't be able to return to my grandfather's village in the Galilee, but I believe that the Green Line should be our red line," he said.
Speaking about a permanent solution between Israel and the Palestinians, Khoury said, "Israel has to decide whether to marry us or let us go. The government has to decide if it wants a two-state solution or a one-state solution."
Khoury said that the reform plan drawn up by Palestinian Prime Minister Salaam Fayad and approved by the government, prepares the ground well for the day after the occupation ends, but that without engagement with Israel and its government's consent, nothing will take place.
"There is a lot we should do and are doing, but we will not be able to change the dynamics unless the closure regime ends," he said.
Khoury described the Goldstone Report as a watershed.
"I believe the Goldstone Report is a way that should set a foundation of future relations between us and the Israelis," he said. "Israel always thought they could do whatever they want and they will have impunityâ€¦
"I am sure the next time we have a conflict in the area, Israeli generals will think more than twice before giving orders to commit war crimes," he said.
Khoury recently returned from the United States, where he attended J-Street's first annual convention. He said he was gratified to hear voices different than those of what he referred to as the "wrong-wing government currently in power in Israel."
Khoury said that meeting people there had "brought him back from the brink of despair."
Ephraim Kleiman, an economist from Jerusalem's Hebrew University, said that there was no chance of Palestinian economic growth, unless restrictions on movements of goods were reduced.
"No investor in his right mind would invest in Palestinian businesses unless movement is enabled," said Kleiman.
Kleiman suggested the Palestinians should move forward in two stages, the first a restructuring phase, where they would bring the economy back to what it was before the outbreak of the second intifada, and the second a development phase, where they would build on their relative strengths.
Kleiman said that the Palestinians couldn't hope to return to the levels of labor in Israel that they had before 2000, because "Israelis discovered the advantages of employing foreign workers and would not go back to hiring Palestinians."
Kleiman suggested that as a first step, the Palestinians should focus on housing construction and public works. Though it isn't a solution for the long term, since it doesn't generate income, it provides jobs and upgrades the standard of living, said Kleiman.
"They should start by upgrading the refugee camps," he suggested.
Kleiman also said that the Palestinians should look to expanding their export market, rather than depending on the Israeli market.
An important step, according to Kleiman, was the development of a credible standards institute.
Another resource that the Palestinians could take advantage of, said Kleiman, is the Palestinian diaspora.
"There are currently about 5 million Palestinians who live abroad, but their cooperation with the Palestinians in the West Bank and Gaza is minimal," he noted.
"Palestinians could learn from Zionist history. Granted it was easier for us under British occupation than for them under Israeli occupation, but there are a lot of things to learn," said Kleiman. "Fayad's document reminds me of the Jewish Plan for Palestine, which was published by the Jewish Agency before the state was formed."
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