GSME 22: Letter to the Chair of the Committee from Rt Hon Tony Blair, Quartet Representative
Thank you very much for your letter of 6 January, ahead of the Foreign Affairs Committee’s
forthcoming visit to Israel and the occupied Palestinian territory.
You asked what progress I have recently made in furthering economic and institutional development in the West Bank, and in securing further easing of Israeli movement and access restrictions there. You also asked how uncertainty surrounding the Palestinian Authority elections was affecting my work on these issues.
Very shortly after I appeared before your Committee on 1 June of last year, there began to be real change on the ground in the West Bank, and in particular significant easing of restrictions to access and movement. While some key obstacles remain in place, most West Bank Palestinians can now drive almost anywhere in the area, albeit often through long and/or congested routes. Access to urban areas has been significantly eased. As an example, two years ago cities such as Nablus were stagnant and offered little hope for the Palestinians’ economic future. Now, that city is opened up and has been transformed from what it was.
Movement has also been eased through crossing points between the West Bank, Israel and Jordan. At the key crossing point between Jordan and the West Bank at Allenby (also known as King Hussein bridge), daily opening hours have been extended since last summer. We are now working to ensure a scanner for containers is installed there, which would both reduce the costs of trade and speed it up considerably.
In the northern West Bank, the crossing point at Jalameh, near Jenin, has been upgraded to allow through privately owned cars. This step in particular has allowed the influx of Israeli Arabs into the West Bank, bringing with them significant spending power, with a palpable effect on economic life in Jenin. A preliminary survey by USAID, which funded this upgrade, estimates that already an estimated 4000 cars per week are crossing through Jalameh in each direction, with significantly reduced waiting times compared to previously. Following further lobbying of the Government of Israel (GoI), we received agreement to extend Jalameh’s opening hours further, to generate maximum benefit from the upgrade and better manage the flow of traffic. The crossing is now open until 7pm, extended from 5pm.
In the southern West Bank, a decision has just been taken to extend the opening hours of Tarqumiya crossing point. The city of Hebron uses Tarqumiya as a key crossing point into Israel and wider markets through the port of Ashdod. Extending opening by three hours each day allows for a greater flow of trade.
Opening hours are of course only part of the story. At Tarqumiya and other crossing points, OQR works to secure more streamlined procedures, including allowing containers through without operating a "back-to-back" regime of unloading and loading of goods. Also, we
press for more transparency in how crossing points are managed, allowing business people to plan ahead.
Economic projects are moving forward. On 10 November, I took part in the formal launch of "Wataniya", the second mobile telephone operator in Palestine. Wataniya’s launch is overdue, but extremely welcome. The project will provide the single largest foreign direct investment into the Palestinian economy: Wataniya is expected to invest US$ 700 million in the Palestinian economy over a ten year period, creating at least 750 skilled jobs and an additional 2,000 indirect jobs. Wataniya will also bring in revenues for the Palestinian
Authority, in the form of tax revenues and licensing fees.
More widely, the launch of Wataniya means the completion of a key milestone in the PA’s economic reform and state building agenda, i.e. liberalisation of the Palestinian telecommunications sector.
Wataniya is an example of a flagship project, which has a significant impact on people’s perceptions and hopes for what a lasting peace might bring. Another such project will be the new town of Rawabi, which would be the first Palestinian planned community in modem times. It will feature 5,000 housing units situated between Ramallah and Nablus on Area A land, and would include a commercial centre, green spaces and public facilities. It will provide 8,000 construction jobs and, when built, 5,000 jobs for its residents and for the residents of the nine surrounding villages. For the project to be viable and launch within the next few months, a solution needs to be found to allow the building and use of two roads on land currently designated as "Area C" (sole administrative and security control by Israel), one a temporary road to the construction site, and one a main access road, 4 kilometres in length. I am working with the GoI, the Palestinian Authority and Rawabi's developer to help facilitate this solution as soon as possible.
Work continues on the industrial parks in Jericho, Jenin, Bethlehem and Tarqumiya. I received assurance last year from the GoI on their intention to push forward with their establishment. We are working closely with the PA, GoI and the respective donors to follow this through.
In coordination with Prime Minister Fayyad I have followed up on pledges made at the Paris Donor Conference in 2007 to ensure the Palestinian Authority meets its budget requirements for 2008 and 2009. At a meeting of the co-chairs of the conference this January, it was agreed to maintain this momentum and that the chairs would work to ensure donors fulfil their pledges for 2010, helping the Fayyad government to meets its funding needs as well as continue the programme of PA reform, particularly in the areas of public finance, governance and security.
Improvements over the last year have helped the economy in the West Bank flourish, although Gaza’s economy has remained stagnant. The IMF has estimated that together, the economies of the West Bank and Gaza grew in the third quarter of 2009 at a rate of 5.5 percent. I anticipate higher growth in 2010, assuming progress on some key factors: increased movement of people and goods around and into the West Bank area; increased Palestinian regulatory and security capacity, which in turn improves popular and business confidence in the economy; progress on economic projects; and relative stability and peace.
Critical to economic growth and improvement in access and movement has been the Palestinian Authority’s establishment and strengthening of Rule of Law in parts of the West Bank under its authority. The PA’s capacity has continued to strengthen through 2009. PA Security Forces have demonstrated an ability to maintain law and order. The PA has improved, if still limited, civilian control of the security forces. The criminal justice sector has also advanced, albeit at a slower rate. Courts are now processing cases at a faster rate than they are coming in. Progress should gather pace in 2010, with plans set in train to support PA-led reform and capacity building within the judiciary, prosecution service, defence and prisons systems.
Israeli-Palestinian cooperation over Rule of Law issues is also essential. Cooperation between the Israel Defense Forces and PA Security Forces continues, albeit in an often ad hoc manner. With international partners, I press the GoI to limit IDF incursions into "Area A" (those parts of the West Bank under full Palestinian security and administrative control), limit and to put an end to curfews when PA Security Forces may not operate, and to allow free movement of criminal justice sector personnel throughout the West Bank.
Notwithstanding the evident improvements there have been on the ground over the past year, it is clear that the daily situation for Palestinians is still extremely difficult and that much remains to be done to lift the burden of occupation on them. Movement and access throughout the West Bank, whilst improved, remains restrictive; there needs to be significant improvement in the lives of Palestinians in East Jerusalem, as well as better links between East Jerusalem and the West Bank; and there is a powerful case to be made for change in policy in Area C (which makes up 60% of the West Bank), where Palestinians find it extremely hard to gain permits to build and to use their agricultural land.
Lastly, and as importantly, I continue to advocate to the GoI a new policy approach to Gaza which recognizes that the current situation is unstable and harms any prospects for a sustained peace. My team of advisers in Jerusalem back up this advocacy with detailed analysis and argument. The GoI has decided recently to make incremental, positive changes. It has allowed an increase in the types and volumes of goods and materials being allowed into Gaza, including glass to help repair and rebuild housing. It has also allowed a steady flow of carnations and strawberries to be exported. It is clear that there needs to be a significantly new approach to Gaza, for which we continue to press. In the meantime, we also work on developing "tactical" interventions which will help improve Gazans’ daily
lives.
My guiding principle is that for political negotiations to succeed there must be transformative change on the ground in the West Bank and Gaza. By pursuing continued reform and delivery, it is possible to create an environment of trust and confidence which will help negotiations succeed. Any uncertainty surrounding Palestinian elections has not had a perceptible effect on the work that I do or the cooperation I receive. The PA continues its effort to deliver its plans for building state capacity, including the latest "Program of the Thirteenth Government", which sets out a persuasive vision for Palestinian statehood in the next two years. Work is in hand to finalise the next Palestinian Reform and Development Plan (PRDP) for 2011–13-expected by the third quarter of 2010.
You asked what I was doing to press Israel to implement the EU-PLO Interim Association Agreement and whether I saw any signs of progress. You also asked what effect on Israel’s willingness to ease conditions facing the West Bank economy is being generated by the EU’s freezing of its planned ‘upgrade’ of relations with Israel, and by the UK’s recent steps on the labelling of exported West Bank produce.
In determining how best to press the case for change on the ground, I stand guided by President Abbas, Prime Minister Fayyad and the Palestinian business community. In my conversations with all of these, the issue of Israel’s non-recognition of the EU-PLO Interim Association Agreement has not been raised. However, I am aware of the issue and the negative impact it has on Palestinian trade relations with the EU. I am also aware that the European Commission, which is the European signatory to the EU-PLO Interim Association agreement, continues to address the issue with the Israeli authorities in the relevant fora and through attempts to establish a trilateral dialogue on trade relations with the PA and Israel.
I would not want to speak for the EU or the UK in assessing to what extent a change in relations or actions on their part affect Israel’s willingness to ease conditions facing the West Bank economy. What I would say is that Prime Minister Netanyahu’s government appears in any case to have accepted readily the arguments for change on the ground, on their own merits.
I wish you and the Committee every success with your trip to Israel and the occupied Palestinian territory.
2 February 2010
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