“It is
our goal and our expectation that as a result of what we are doing – getting
ready for statehood, developing institutions that delivery services competently
and (developing) core values – that our state of Palestine will be founded,”
Fayyad said. “I am very happy to tell you that in many areas of governance we
are already there.”
Fayyad,
the Palestinian Authority’s No. 2, has been cracking down on corruption and
inefficiency as part of a two-year-old campaign to gain recognition for a
Palestinians state from the United Nations General Assembly, probably in
September. Israel is opposed to the plan, saying a state should be achieved
through negotiations, even though they have been deadlocked for months.
Fayyad
said the PA’s economic bodies, including the Palestine Monetary Authority and
Central Bureau of Statistics (CBS), were already up to the standards he had
set. He cited the Palestinian CBS for special praise, saying it was close to
meeting the International Monetary Fund’s IIMF’s) highest benchmarks.
While he
jokingly conceded that improvements at the statistics bureau didn’t excite his
fellow politicians, Fayyad said it served as a barometer for how well other
branches of the government were functioning because it was able to gather
information from them in an accurate and timely manner.
"The
fact that we have in this areas such high and exacting standards means that
other institutions in the PA have matured enough to commit to those standards,”
Fayyad said.
In
contrast to most Palestinian leaders, Fayyad spent much of his adult life in
the West, getting a doctorate in economics from the University of Texas and
enjoying a career at the World Bank and IMF. Since taking over a barely
functioning administration four years ago, Fayyad has deployed a
Western-trained security force to restore law and order and spent billions of
dollars in foreign aid to build infrastructure and boost the economy.
Palestinian
statehood has been recognized by Brazil, Argentina, Chile and other Latin
American countries. France, Norway, Spain, and Portugal have upgraded local
Palestinian representations. But Fayyad said that creating corruption-free
institutions is as important as winning international support for a Palestinian
state regarded as worthy of joining the community of nations.
Speaking
at a venture capital conference in the West Bank city of Ramallah, Fayyad said
he was anxious to wean the PA off foreign assistance both as part of the
statehood drive and to encourage foreign investment. As well as good government
and functioning legal system that can enforce contracts, investors want to
government to show sustainable budgets, he said.
The PA
has budgeted for $970 million in donor aid for 2011, down from $1.8 billion in
2008. He predicted that by 2013, the PA would have “graduated” from the need
for any more assistance.
The prime
minster said improving fiscal situation came hand in hand with the gradual
recovery of the Palestinian economy from the years of the second Intifada in
2000-2005 when the economy contracted. The Palestinian Central Bureau of
Statistics said March 23 that gross domestic product grew a preliminary 9.3
percent in 2010.
But the
growth isn’t enough to create jobs for the 45,000 Palestinians who enter the
labor market every year, he said. In the West Bank, the unemployment rate is
probably above 15 percent and in the Gaza Strip it is more than twice that.
Fayyad said attracting private sector investment was the only solution,
especially as the fiscal stimulus of foreign assistance declines.
Fayyad
said the next challenges facing the PA toward creating as full-fledged state
and thriving economy were to bring an end to the Israeli occupation and to
reunite the West Bank with the Gaza Strip, which was seized by the Hamas
movement in 2007. Hamas refuses to recognize the government of Fayyad and
President Mahmoud Abbas and talks to re-form a brief national unity government
between the two have failed.
“We have
to get our country reunited. It is absolutely essential for us to do so,”
Fayyad said.
While the
Israeli occupation, in particular the network of roadblocks that impede the
movement of people and goods around the West Bank, continue to weigh on the
economy and investment, the prime minister said high technology and
telecommunications were an important growth driver for the Palestinians that
was less sensitive to roadblocks than other industries.
The $29
million Sadara Ventures/Middle East Venture Capital Fund launched on Tuesday
will invest in Palestinian internet and mobile start-ups. While Palestinian IT
companies have combined sales of about $300 million, it is mostly geared to
information technology services. Sadara’s partners said they hoped to break new
ground by fostering the growth of new companies developing their own technology
for global markets.
