Press Releases

    GA/PAL/856
    21 February 2001

    PALESTINIAN SEMINAR CONCLUDES IN VIENNA

    Speakers Call for End to Israeli Restrictive Measures,
    Donor Assistance to Palestinian Economy

    (Received from a UN Information Officer.)

    GENEVA, 21 February (UN Information Service) -- The seriousness of the current situation in the Palestinian territories required political action by the European Union and other actors, the representative of Sweden told the closing session of the United Nations Seminar on Assistance to the Palestinian People.

    Speaking on behalf of the European Union, he said the Union had asked Israel to end collective punishment against Palestinians, lift the closures, ensure unrestricted humanitarian access, lift restrictions on the clearance of goods for humanitarian and development assistance and fulfil its obligations to the Palestinian Authority regarding Value Added Tax and customs clearance payments. The current economic crisis was unacceptable and threatened the stability of the region, the prospects for peace, and Israel’s own security.

    At this morning’s session, the Seminar heard the last of four panel discussions: "Efforts by international donors and other sectors of the international community to alleviate the economic hardship of the Palestinian people".

    The executive director of Info-Prod (Middle East) said that it was not in Israel’s interest to have a poor neighbour. A well-developed Palestinian economy would be better for Israeli security and economy. He called for drastic measures, bringing full peace between Israel and its neighbours and supported joint ventures as a method of improving the economic situation.

    The Permanent Observer of Palestine to the United Nations in New York said logic dictated that Israel would benefit from a healthy neighbour, but in practice it had worked to prevent that. It was increasingly difficult to separate political aspects from economic, he said. Potential for serious economic development could come only after a serious political solution was achieved. Without a drastically different situation no serious economic development would be possible. Another interim agreement arrangement was unacceptable.

    The chairman of the Israeli Institute for Economic and Social Research said that peace was inevitable "but the price we pay until it arrives will determine its quality". Economic steps must be taken not as an end but as a means.

    The representative of the Arab-American Anti-Discrimination Committee said economic aid to Israel was given directly in cash without requiring accounting. In contrast, aid to the Palestinian Authority was strictly controlled and specified for particular programmes. Under the terms of the Wye agreement all of the $400 million promised to the Palestinian Authority in the agreement was for economic aid whereas all of the $1.2 billion for Israel was for specific military projects. Israel’s aggressive response to the uprising and its disregard for the findings of the Security Council and Human Rights Commission was based on the massive economic and military aid it received from the United States.

    In his closing remarks, the Chairman of the Committee on the Exercise of the Inalienable Rights of the Palestinian People, Ibra Deguene Ka (Senegal), said the Palestinian people had been reduced to fighting for their survival and for the satisfaction of their basic day-to-day needs, rather than working for long-term development. The consequences of the situation, if it was not brought to a stop, were fraught with danger for peace throughout the region. The Committee once more called upon the donor community to continue with its assistance in order to meet the urgent needs of the Palestinian people. It requested donors urgently to contribute the funds needed to remedy the serious budgetary crisis which the Palestinian Authority was passing through.

    He stressed that Palestinian economic rehabilitation and development were a prerequisite for peace in the Middle East. For peace to return and take root, a comprehensive, just and lasting political settlement must be coupled with a substantial improvement in the living conditions of the Palestinian people. Peace, security and prosperity went hand-in-hand for Palestinians, Israelis and the Middle East region as a whole.

    The representative of Belarus also made a statement. Speakers in the panel included the Chairman of the Israeli Institute for Economic and Social Research, the Economic Adviser to the Special Representative of the European Union to the Middle East Process and the Communications Officer of World Vision Jerusalem. Other speakers included representatives of the European Coordinating Committee for Non-Governmental Organizations on the question of Palestine, and the World Council of Churches.

    The Seminar, originally scheduled to take place over the course of two days, was foreshortened by the absence of key speakers who were prevented from leaving the Palestinian Territory because of general closure. The Committee has issued a statement denouncing the closures imposed by the Israelis and urging the Israeli Government to desist from such illegal practices.

    Representatives of 73 governments, 4 intergovernmental organizations, 9 United Nations agencies, 25 non-governmental organizations (NGOs) and 15 members of the media attended the two-day Seminar.

    Statements

    GIUSEPPE MASALA, Coordinator in the Palestinian Self-rule Areas, World Health Organization (WHO), said the conflict in the Palestinian Self-Rule Areas was taking an increasing toll on health not only with regard to the high level of injury and psychological trauma but also in undermining the newborn referral system that had begun to develop. Hospitals and health facilities had been overwhelmed by the sudden burden of patients. Medical vehicles had been damaged and put out of action. The ongoing military activities and the closure of borders restricted the movement of health personnel and patients. Cities and territories, which had developed a working referral system, were cut off from each other and from their rural areas.

    He said the health system was also being indirectly affected by the economic losses suffered by the territories, which in the first three weeks of the clashes were reported to have exceeded the total value of donor disbursements to the Palestinian Authority in the first half of the year 2000. The Minister of Health of the Palestinian Authority had only recently taken responsibility for the health care of Palestinians. The current situation was jeopardizing years of effort and risked activating unsustainable duplication of services and facilities. At the same time public services had begun to deteriorate, both increasing the risk of disease outbreaks and undermining the ability to maintain early warning surveillance activities.

    Initiatives carried out by the WHO in the past years included the Essential Drug Programme and preparation of the National Drug Formulary, Brucellosis control and Food safety, springs and wells protection and surveillance of quality of drinking water, he said. Also included were a Primary Health Care Network and programmes for rehabilitation, immunization and polio eradication. Since the current crisis, the WHO was involved in the purchase, shipment, clearance, distribution and delivery of emergency traumatological kits, medicines, medical supply and equipment. A crucial element to be tackled was the problem of accessibility.

    He said the Ministry of Health faced a number of challenges: existing services were overloaded by excessive demand for emergency medical care, and emergency medical services and ambulance staff were working overtime. It needed training for new personnel or refresher courses for current staff. There was an acute shortage of stock demanding greater efficiency and targeting the most needy, and there was a need for better management of donations. The WHO was ready to support the Ministry of Health in establishing emergency preparedness and planning units to prepare for the future health system development plan.

    MARTIN WILKENS (Sweden) speaking on behalf of the European Union, said the current economic situation in the Palestinian territories made assistance to the Palestinian people difficult to implement. Due to the closures, imposition of fees for goods clearances, and restrictions on the freedom of movement, the humanitarian actors faced time-consuming and costly obstacles to the transport of humanitarian goods and personnel to those in need of assistance. Reviewing contributions of the European Union, he said the main fields of support were in education, human rights, health, institution-building, water, infrastructure and environment. Most of the support was channeled through the Palestinian Authority.

    In the recent economic crisis, he said, the European Union had supported the Palestinian Authority with cash on a temporary basis. In 1998, a special cash facility was introduced which enabled the Palestinian Authority to compensate for the loss of tax revenues that Israel withheld. He urged other donors to increase their contributions to help meet the severe challenges facing the Palestinian economy. A discussion of long-term perspectives on the consequences of the budgetary and institutional crisis was necessary. The European Union would explore how best to mobilize and improve donor coordination. It supported the convening of an ad hoc liaison committee with the active participation of the Palestinian Authority and the United Nations. To have a coherent donor response, however, the Palestinian Authority must provide coordinated and correct financial information as a basis for donor deliberations.

    Expressing support for the United Nations Relief and Works Agency (UNRWA), he reminded participants that there was a donor’s meeting tomorrow in Amman. He urged donors to come forward to ensure a sound and sustainable financial basis for the Agency.

    He said the seriousness of the current situation required political action by the European Union and other actors. The Union requested Israel to end the collective punishment of Palestinians, lift the closures, ensure unrestricted humanitarian access, lift restrictions on clearance of goods for humanitarian and development assistance and fulfil obligations to the Palestinian Authority with respect to Value Added Tax and customs clearance payments. The current economic crisis was unacceptable and threatened the stability of the region, the prospects for peace and Israel’s own security. Both parties had a duty to minimize the tension between them. Improving the economic situation in the occupied territories was an important element in that effort. The European Union condemned those on both sides who incited and resorted to violence.

    Panel IV: Efforts by International Donors and Other Sectors of International Community to Alleviate Economic Hardships of Palestinian People

    ROBY NATHANSON, chairman of the Israeli Institute for Economic and Social Research, Tel Aviv, said he did not have easy solutions to the tension in the area. Peace was inevitable but "the price we pay until it arrives will determine its quality", he said. To minimize those costs, economic steps must be taken not as an end but as means. Israel and the Palestinian Authority had a basis for cooperation that was awaiting exploitation once the political obstacles were removed.

    He said that the economy of the Palestinian Authority had stalled due to the interruptions to local and cross border economic activity. There had also been economic impact on Israel’s economy. In the last quarter of the year 2000, growth in Israel fell by almost 10 per cent with reductions in construction, demand for non-basic goods, and local and foreign investment. It also influenced Israel’s economic ties with its trading partners. One solution to the problem might be total separation with hermetic borders between Israel and the Palestinian Authority. Palestinian income would decline dramatically and Israel would be forced to import greater numbers of wage earners from foreign countries. Israel’s dwindling export surplus to the West Bank would plummet causing an additional decline in the gross national product for both parties.

    Another option might be to maintain the status quo with some modifications, he said. That option reflected current prospects for a long drawn-out interim period. That scenario linked the future of economic relations directly to a political solution.

    The most preferred option, he said, was regional cooperation. Arrangements in other parts of the world showed how bottom-up initiatives could provide a basis for establishing cooperation at higher levels. Because projects were "people to people" and ‘business to business", they offered options for solving a range of economic problems and easing unemployment relatively quickly. Some form of economic cooperation could be established that would be partially independent of the political solutions on the national level.

    He said his views were based on the realization that whatever was expected to follow in the wake of Oslo could not happen in the time frame projected. Economic outcomes anticipated by many Israelis were delusions. Alternately, the Palestinian leadership should understand that the economic price the Palestinians were paying for their political agenda was so severe that it would have to answer to the people sooner or later. There must be acceptance that the two economies were integrated and that neither was independent of the other.

    He said the most critical problem was unemployment, which could only be relieved by creating jobs. Freedom of movement was among the most important incentives to reawaken local economic activity and cross-border cooperation. The policy of border closures and internal blockages must cease. At the same time, much had to be done on the Palestinian side to restore confidence. Boycotting the Israeli products might be neither efficient nor constructive for either side. To solve unemployment, the Palestinians had to turn to institutional bodies, major corporations or governments, in Israel and abroad, with requests to develop operable programmes of capital investment in the Palestinian Authority. In the longer or medium term, foreign markets must become more accessible to Palestinian exports, particularly agricultural products.

    Concluding, he said a Palestinian State was the necessary response to many of the economic problems besetting both the Palestinian Authority and Israel -- a view shared by many economists and politicians in Israel. There was no alternative for either party. A structure of formal institutions was required. He stressed that globalization was a reality and the two governments must be convinced that cooperation between the two States was the only way to guarantee individual and national well-being.

    MATTHIAS BURCHARD, Economic Adviser to the Special Representative of the European Union to the Middle East Process, said the Palestinian economy was on the verge of collapse and the administration was finding it difficult to deliver services. There was severe humanitarian hardship. Most worrying was the cost of dead and wounded on both sides. There must be an end to the violence in which both sides felt their legitimate concerns and aspirations had been met.

    He said domestic economic activities were down 50 per cent and potential tax revenue was reduced by 44 per cent. The gross national product was estimated to have dropped by 30 per cent and daily losses equaled 12 million euros. Imports from third countries had fallen 15 per cent and tourism had come to a standstill. Most worrying however, was the present budget gap which amounted to 44 million euros monthly; high unemployment estimated to be close to 45 per cent; and disrupted government–constituency relations and increased inability of the Palestinian Authority to deliver basic services. Immediate needs had to be addressed urgently and decisively. Financial activities must be complemented by political action. The present volatile and unstable situation would continue so any immediate recovery strategy had to look ahead.

    He went on to say that imports and exports from and to Palestine would be subject to restrictions. It would be difficult to design macroeconomic strategy unless some strategies were changed. Both sides should understand and utilize the economic advantages that both could offer each other.

    A strategy of diversification would have to address political, institutional and economic spheres. A meaningful recovery would require lifting the internal closure, resumption of timely revenue transfers from Israel; Palestinian customs control at border crossings with Jordan and Egypt; reasonable Israeli security checks; point to point movement of goods -– one truck one check; and infrastructure facilities like cargo and cool storage at borders. The Palestinian administration would have to embark on meaningful institutional reform. Recent violence had stopped progress in that direction.

    Turning to the economic sphere, he said that although Israel and the Palestinians were natural trading partners, it was necessary to develop alternative trade routes and diversify away from high-cost products to low-cost products. The Palestinians enjoyed the freedom to import restricted goods from Arab countries at their preferred custom rate. The League of Arab States had promised to grant the Palestinian Authority duty-free access to its markets. Israeli exports to the Palestinian Authority were worth $2.5 billion and Palestinians sold to Israel about $500 million worth of goods. Diversifying from such dependence was a long-term process but it would lessen the impact of crises. Discussions on such a strategy should be led by the Palestinians themselves.

    The European Union had invested considerable effort to assist the implementation of bilateral agreements, he said. It had conveyed concern about the economic situation to Israel. Donors could not be expected to pick up the bill time after time and see their taxpayers' money being destroyed through repeated political disasters. Both parties needed to consider that that generosity could not be taken for granted indefinitely.

    ZIAD ASALI, Chief Operating Officer, American-Arab Anti-Discrimination Committee, said that it was usually estimated that the United States gave Israel $3 billion in military aid. The actual total, however, was as high as $5.5 billion. Much of the aid was buried in the budgets of government agencies and was allotted in a form that was not easily quantifiable. A recent report estimated that cumulative aid to Israel from 1949 through 2001 was $91.36 billion. In addition, the United States underwrote billions of dollars of loans in the form of guarantee on Israeli borrowing. The United States routinely waived all Israeli loans that came due.

    He said United States aid to the Palestinian Authority ran at about $100 million per year with the sum total over the past seven years equaling about $600 million. Economic aid to Israel was given directly in cash without requiring accounting. In contrast, aid to the Palestinian Authority was strictly controlled and specified for particular programmes. The Wye agreement demonstrated the disparities involved. All of the $400 million promised to the Palestinian Authority in the agreement was for economic aid, whereas all of the $1.2 billion for Israel was for specific military projects. Israel’s aggressive response to the uprising and its disregard for the Security Council and the Human Rights Commission was based on the massive economic and military aid it received from the United States. In recent decades, especially under the Clinton administration, that aid was granted and increased giving Israel a sense of impunity and disregard for international law.

    He went on to say that United States military aid played a substantial part in the mechanics of the Israeli repression in the occupied Palestinian territories. The military hardware Israel received was used against Palestinian civilians even though United States law requires that such weapons could only be used in self-defence. At the same time, the United States had used the little aid Palestinians received as leverage on behaviour which did not challenge Israeli policies and ambitions. Israel’s use of economic warfare against Palestinians and the failure of the international community, including the Arab States, to challenge those policies had led to a situation in which the Palestinian Authority found itself on the brink of bankruptcy.

    GIL FEILER, executive director, Info-Prod Research (Middle East), said that despite the remarks made by the Permanent Observer of Palestine to the United Nations, it was not in Israel’s interest to have a poor neighbour. A well-developed Palestinian economy would be better for Israeli security and economy. There was no alternative to economic cooperation or relations between Israel and the Palestinian Authority. Mutual trade amounted to $1.5 billion. Israeli exports to the Palestinian territories equaled $1 billion, second only to its export to the United States. Palestinian exports to Israel constituted 95 per cent of its total exports. The Palestinians had tried to export to England but the English wanted more sophisticated products. In the meantime, Israelis flocked to neighbouring Arab countries to purchase goods. Prior to the intifadah, the largest group of people interested in investing in Palestine were Israelis. The Palestinian Authority would not allow Palestinians to engage in joint ventures with Israelis although the Palestinian Authority itself was involved in joint ventures with large Israeli companies. The Palestinian Authority and Israelis jointly owned large cement and petrol monopolies.

    He said that a recent study indicated that Israelis no longer intended to invest in Palestinian business. As of 10 February, eight main avenues of income were lost including work income, unemployment due to lack of raw materials, trade in areas where Jews shopped on the weekend, and the transfer of taxes. It was not certain that the Palestinian Authority would be able to collect those taxes as Palestinians hardly paid taxes. In that area Israel was doing the Palestinians a service. Other losses stemmed from lack of income from the Casino and from tourism.

    Some speakers had said that Palestinians should create jobs in the Palestinian territories. Hundreds of thousands of legal and illegal workers had taken the place of Palestinians who had worked in Israel creating a problem for both parties. From the Israeli perspective, it was better to have Palestinians who came to work in the morning and returned home in the evening.

    Palestinians owed large debts to Israeli businesses, he said. Some businessmen had asked the Israeli Government to deduct payments from the taxes due to the Palestinian Authority. Boycotting Israeli products would not help the situation. He noted that the boycott was extended to anyone who cooperated with Israel.

    He said drastic measures should be taken. Full peace between Israel and its neighbours was important for Israel. He called on participants to imagine a meeting between Arafat and Sharon and in which they said clearly that they supported joint ventures. That would create trust, not only for Israelis but also for the international community. International donors would create a fund to support joint ventures.

    ALINE BATARSEH, communications officer, speaking on behalf of World Vision, said that since the eruption of violence following Ariel Sharon’s provocative visit to the Haram al-Sharif, international NGOs had attempted to address the needs of Palestinians in East Jerusalem, the West Bank and Gaza Strip. Closures were a symptom of 34 years of Israeli military occupation and the economic impact was devastating. The West Bank now had an estimated poverty rate of 30 per cent compared to 21 per cent in the absence of closures. Closures created a need for employment, psychological programmes for children and caregivers, medical supplies and food commodities.

    She said that most of the jobless had been poor before the recent crisis. International organizations had been considering the pursuit of funds for job creation programmes. She reviewed the efforts of some, stressing that job creation was a stepping point to establishing lasting programmes. Other areas included aid to children and medical aid. During the first three months of the intifadah, most international NGOs had provided much needed medicines and medical supplies as hospitals and clinics were unable to maintain adequate supplies. They had also responded with food. There was concern that the closures could lead to a shortage of food supplies, especially to the vulnerable poor. World Vision had provided basic food supplies to approximately 3600 families in the West Bank. Currently international NGOs were assessing the risk of food insecurity among the communities most affected by the current violence. Unfortunately, most of them were not able to carry out new food distribution programmes.

    She affirmed that humanitarian aid delivery had been hindered due to Israeli restrictions and noted that on five occasions the Israeli military had prevented World Vision from transferring much-needed medical supplies to Gaza. Even though international organizations attempted to assist Palestinians through development projects, Israel’s policies and violations of international humanitarian law hampered the work of the international NGOs and efforts to carry out sustainable long-term development projects. World Vision's work had been hampered numerous times because of Israel’s policies of land confiscation whereby the villages where the organization was based had lost over 50 per cent of their land. If the Israeli Government did not comply with international laws and end the occupation, attempts by international NGOs to help Palestinians to retain their livelihood would be in vain.

    She recommended that international NGOs concentrate on long-term, as against short-term, alleviation of economic, social and political hardship. Moreover, existing programmes should be flexible to incorporate methods of alleviating the suffering of those who were most affected by the current political crisis. Attempts to alleviate the economic hardship of the Palestinians should be joined with advocacy efforts on their behalf. The international community must find a way of challenging the primary source of the Palestinian’s misery: Israeli occupation.

    PIERRE GALAND, chairman of the European Coordinating Committee for Non-Governmental Organizations on the Question of Palestine, said NGOs had worked in particular to protect the human rights of the Palestinian people. Europe must become more active and live up to its responsibility in the Middle East, particularly the protection of the Palestinian people. He had recently been in the area and bulldozers were creating barriers around individual settlements. Assistance to Palestinians was being blocked and obstacles were being created from day to day.

    Much important work remained to be done, he said. Certain Israeli products were sold in Europe in contravention of agreements. He was opposed to any bantustanization of Palestine. He pointed out that every Friday in Brussels, protestors have picketed the Israeli Embassy demanding Israel honour United Nations resolutions.

    He proposed the establishment of an airlift between Europe and the Palestinian territory, stating that if it could be done for Berlin, it could be done for Palestine, using the airstrip in Gaza. He said the Belgian Government had already started such a programme and would make its first airlift in March.

    He said Europeans had to be active citizens in the European parliament, which in turn, could be in touch with the parliaments in Palestine, Israel and Mediterranean countries. The Euro-Mediterranean area should open up a new area of cooperation. Colleagues in Israel should understand that the policies of Barak and Sharon were counter to the well-being of the whole of Israel.

    The representative of the World Council of Churches said that all the Eastern, Orthodox and Catholic Churches respected the rights of people to struggle against injustice and to gain freedom. He expressed deep sadness and grave concern over the new escalation of violence that had claimed a terrible toll on human life. The World Council of Churches shared the frustration and disappointment of its Palestinian sisters and brothers who suffered from the exclusion, humiliation and discrimination caused by restricted movement of Palestinians. Calling for an end to Israeli occupation, he said it would continue to assist Palestinians and pray for peace in the Middle East.

    The representative of Belarus said he deeply regretted that the invited Palestinian speakers had not been able to join the Seminar. That illustrated the need to bring peace to the Middle East. There was not much ground for optimism but his Government would continue to support the Palestinian people in their aspiration for dignity, peace, stability and economic prosperity.

    NASSER AL-KIDWA, Permanent Observer of Palestine to the United Nations in New York, responding to the statement made by Mr. Feiler, asked why was it that Israel was interested in having a neighbour that was doing well when it was engaged in destroying the economy of that neighbour. Logic dictated that Israel would benefit from a healthy neighbour, but in practice it had worked to prevent that. The Israeli Government had engaged in lowering the expectations of the Palestinians. The reasons were not immediately apparent. Israel might have exaggerated its security needs or it might have an army that was partially out of control. It was more complex than simply a situation of foreign occupation. The situation was more one of colonialism.

    It was increasingly difficult to separate political aspects from the economic, he said. Potential for serious economic development could come only after a serious political solution was achieved. Without a drastically different situation no serious economic development would be possible. Another interim agreement arrangement was unacceptable. Dialogue had to resume on what had been already negotiated, on the basis of the relevant Security Council resolutions. He appealed to participants to be more careful in using terminology referring to violence. There was no parallel between what the two sides experienced.

    Mr. NATHANSON said that economic cooperation needed peace and peace needed economic cooperation. He agreed that after the Oslo agreements there had been the delusion that one could proceed with economic cooperation before there was a final settlement to the conflict. It was his understanding that the exercise was to try and see what could be done in the meantime. Israel had a role to play and there was no other way but to work it out together. It was not the usual kind of colonialism but the relation of two people whose destiny was to live together.

    Mr. AZALI said the fundamental shape of the agreement was already known -- a Palestinian State with Jerusalem as its capital and some accommodation for the right to return. He expressed concern about the implications of the recent election of Mr. Sharon in Israel. He said his other concern was the rightward shift in the Arab world. The people who wanted peace must understand that the occupation must end. The rest of the world would not tolerate what was going on.

    The CHAIRMAN said that three of the participants who had been prevented from attending the Seminar had sent copies of the statements they had planned to make. The papers were available at the documents counter.

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