British minister: Israeli restrictions largest obstacle for Palestinian economy
Bethlehem – Ma’an Exclusive – The British government is pressing Israel to ease restrictions on Palestinian movement, which remain the largest obstacle to economic recovery in the West Bank and Gaza, the British Minister of Trade and Investment, Gareth Thomas, has claimed.

In an exclusive interview conducted via email Thomas responded to Ma’an’s questions about a conference that began on Monday in London aimed at boosting investment in the Palestinian private sector. The conference was attended by Palestinian caretaker Prime Minister Salam Fayyad, himself an economist and former World Bank employee.

The London meeting is a continuation of Fayyad’s policy of opening Palestine to investment now, before the creation of a Palestinian state, while cutting the Palestinian Authority payroll and reforming financial institutions. The gathering also follows a donor conference last year in Paris, and two investment conferences this year in Bethlehem and Nablus.

While praised by the International Monetary Fund and Western leaders, the strategy of building a Palestinian private sector under Israeli occupation has also drawn criticism. Opponents charge that the occupation makes business impossible, and that political progress, not private investment, is needed.

Thomas addressed these and other problems in the interview:

Ma’an News Agency: What are the aims of the London conference?

Gareth Thomas: The Forum will demonstrate the resilience of the Palestinian private sector, the economic progress achieved since the Bethlehem Investment Conference, and the considerable opportunities for partnerships with UK and other investors.

The conference will also launch the newly established Palestine Britain Business Council, a high level private sector led group of senior UK and Palestinian business representatives which will work with Government to follow-up the event and facilitate further UK/Palestinian trade and investment.

A high level delegation of over 60 Palestinian business representatives from East Jerusalem, the West Bank and Gaza will be attending. The enthusiastic response from both the Palestinian and British private sector to the Forum demonstrates a willingness from both sides to establish business relationships.

MNA: What sorts of projects are expected to be announced at the meeting?

GT: Numerous important developments will be announced at the Forum, including:

i. Establishment of the Palestine Britain Business Council. A private sector led group of senior UK and Palestinian business representatives to work with Government on follow-up to the Forum.

ii. Confirmation that Palestinian olive oil producers will achieve fair trade status in 2009 for the first time ever. These will open up access to British supermarkets, and should lead to a dramatic rise in sales.

A number of private sector led business cooperation initiatives are due to be announced on the day. Others will be discussed in the business to business roundtables.

Palestine is not the only country in the Middle East seeking business: other Arab states are also shaking off bureaucracy and courting investors. Unlike the PA, these states control their own borders, tax systems, customs codes and territories. Why should investors stake their money on Palestine?

Business can function in the Occupied Palestinian Territories, and this conference will demonstrate the considerable potential for investment.

Many investors in Britain, the Middle East and internationally realize that the promotion of a viable private sector and flourishing commercial environment is a fundamental factor underpinning the success of a future Palestinian state. This is something we all have a stake in as a keystone of peace and stability in the region.

MNA: The economy of the Gaza Strip has collapsed due to the prolonged closure of the borders. Is investment being sought for Gaza? If so, will the British government press Israel to lift the blockade and ensure that economic projects go forward?

GT: The British Government is focusing on Gaza. We have consistently pressed the Israeli government to comply with their obligations under international law and allow passage of relief supplies. This was the message the Foreign Secretary delivered in his meetings with Israeli leaders during his recent visit to Israel and the Occupied Palestinian Territories on 16-17 November 2008.

The UK plans to provide £100 million to the UN Relief and Works Agency (UNRWA) over five years to help Palestinian refugees in the region, of whom 70% are Gazan. This financial year, we have provided £19 million to UNRWA.

Gaza also benefits from the funding we have given for public services through the World Bank and the European Commission. These funds pay teachers, doctors and engineers, and keep basic services running.

A significant number of the Palestinian businessmen attending the forum are from Gaza, ensuring that the Gaza Strip will be firmly on the agenda.

MNA: In its most recent report on the macroeconomic situation in the West Bank and Gaza, the IMF stated that the PA has accomplished what Prime Minister Fayyad set out last year in the Reform and Development Plan (PRDP), in terms of fiscal austerity, reform of financial institutions, and improving internal security. Israel, on the other hand, has tightened the closure regime in the West Bank and Gaza. Without the easing of the closures, implementation of the PRDP, and improvement of the Palestinian economy, will be impossible. What is being done to ensure that 2009 will not bring more of the same, with an enthusiastic pro-business Palestinian prime minister unable to implement his vision because of the physical impediments of occupation? More to the point, what evidence is there for Blair's and Fayyad's thesis that building momentum for the private sector will spur political change?

We recognize the challenges of restrictions on movement and access both in the West Bank and Gaza. We continue to urge Israel to ease these restrictions.

The British Government's Balls-Cunliffe report on the economic climate in the Palestinian Territories identified Israel's system of closures and checkpoints as the fundamental obstacle crippling economic activity - therefore, much of our political effort has been focused on persuading Israel to improve access and movement.

As part of the Annapolis process started in 2007, Israel said it would like to see a stronger Palestinian Authority: one of the best ways to facilitate this is to support Palestinian economic development by improving movement and access across the West Bank.

MNA: The Bethlehem investment conference in May drew criticism for promoting projects, including the proposed industrial zones in Jenin and the Jordan Valley, which accommodate and integrate with the infrastructure of Israeli settlements in the West Bank. Can you respond to the argument that investment stabilizes the Israeli occupation, rather than challenging it?

One of the huge benefits of big conferences like this one in London is that it brings together Palestinian and international business and political figures as well as organizations like Oxfam with a huge amount of experience in this region. Challenges like the one you mention of targeting assistance to those who need it without consolidating illegal settlement activity are the kind of issues being discussed through the wealth of experience being brought together here. The projects and initiatives which are under discussion display an inspiring amount of sophistication in being designed to secure meaningful differences to the business environment and standards of living.
Dec 17, 2008 10:14 PM
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