Examination of Witnesses (Questions 100
- 114)
THURSDAY 1 MARCH 2007
PROFESSOR MANUEL S HASSASSIAN
Q100 Lord Anderson of Swansea:
Clearly there have been strong allegations of misappropriation
of EU funds by the World Bank and others. That you accept?
Professor Hassassian: Yes, that we accept. We
tried to modify our position and perceptions, finding certain
mechanisms for how to improve that transparency, accountability
and credibility, to make sure that these funds are dispensed properly
into the areas that have been designated by the EU. In the words
of the Council of Foreign Relations which published a study in
1999 evaluating the performance of the Palestinian National Authority,
"The Palestinian Authority was expected both to construct
a pluralist, political system and maintain law and order internally
and to enhance peace with Israel and security for Israelis externally.
It has confronted these challenges in a political atmosphere that
was highly charged and marked by violence. It has achieved levels
of service delivery, revenue mobilisation, financial accountability
and mutualisation of international assistance that are at least
commensurate with and in some aspects exceed those in countries
of comparable development and income." As far as the EU funding,
it was relatively effective. Had the political process succeeded,
the PNA was ready to be transformed into a full scale apparatus,
mostly with the general help of the EU. Maybe in the beginning—I
agree with you—there had been a lot of shortcomings and
relative corruption in implementing the proper level of funding
but at a later stage, just before the break out of the second
intifada, the mechanisms that were put forward by the Palestinian
Authority were in tact to monitor and evaluate much better.
Q101 Lord Anderson of Swansea:
How do you think we can do better in terms of maximising the beneficial
impact of the various instruments we have? What do you look for
which we Europeans are not doing sufficiently effectively?
Professor Hassassian: As a result of the international
boycott, with the imposition of economic sanctions, we come to
the question of the TIM. It is important that you deal directly
also with the Palestinian NGOs, with the institutions, because
part and parcel of the EU objective is to build institutions,
capacity and institution building. That funding could be sent
directly to those organisations and some of it was made through
international bodies as far as the question of food security is
concerned. There has been great trauma in trying to allot the
proper funding. Maybe the mishandling of the funds was by those
who went through the PA system and were not dispensed in the proper
way. However, this can be improved by a dual approach, through
the NGO sector and the public funding of the PA.
Q102 Lord Anderson of Swansea:
Are the EU priorities right?
Professor Hassassian: I think the EU priorities
are right. The EU could improve those through verification and
monitoring mechanisms in order to make sure that in the final
analysis such funding will be sustainable for economic growth
and development.
Q103 Chairman:
Of all that funding, the various instruments that are there, which
ones do you think are most directly significant in contributing
to the peace process itself?
Professor Hassassian: The Temporary International
Mechanism, which was I believe a desperate measure, had ensured
two tracks when it was formulated in 2006. On the humanitarian
side, it alleviated the suffering of the Palestinians straightforwardly
by allotting immediate aid for them. Secondly, it prevented the
political authority from collapsing. President Mahmoud Abbas has
raised the extreme need for such an instrument in a letter that
was sent to the Quartet principals on 9 May 2006. TIM has contributed
immensely in alleviating suffering, particularly in the health
sector, by providing essential supplies and non-wage current expenditures.
They have allocated 105 million euros. It also alleviated some
of the humanitarian suffering caused by Israel and the international
community. However, it did not support the financial and political
survival of the PNA. It refrained earlier from contributing to
the wage bill of almost 160,000 public sector employees. That
in itself created the economic conditions that are so dire now
for improvement. That will reduce the effects of instability in
Gaza and the West Bank.
Q104 Lord Swinfen:
I am wondering how well you think the Temporary International
Mechanism has worked. How has it worked least well?
Professor Hassassian: We do not have any problems
with TIM's work. However, we want TIM also to help the Palestinian
public sector. It has to help pay the wage bill. Our basic problem
today is the wage bill. When we talk about 162,000 employees in
the public sector, all of them are predominantly Fatah and not
Hamas. The boycott has impacted Fatah and President Mahmoud Abbas
more than Hamas. Hamas did not have many of those working in the
public sector as they rejected the Oslo accords. Such funds were
not transferred to help in paying the wages. That created the
economic instability. The breadwinners for almost one million
people come from the wage bill and TIM did not contribute a penny
in that direction. Hamas have been managing to smuggle money through
border crossings in order to support the people. The imposition
of the boycott has tremendously affected President Mahmoud Abbas
and his office. Everybody thinks that he has been collaborating
with the United States and Israel and so far he did not get anything
at the end of the day. That is why the popularity of my President
is going down. The people are suffering tremendously and now they
are on the brink of starvation.
Lord Lea of Crondall: We are going to
have to try and get our brains round the statistics and it is
going to be quite difficult because you have referred to two flows
of statistics to do with salaries. This is quite independent of
the 800 million euros or whatever it is going to be next year.
I was wondering if you could try and give us your version of the
statistics comparing the flows, plus or minus the boycotts and
the Israeli flows, the European flows and the Americans flows.
I know it is difficult but, on the other hand, it is necessary,
given all the points you have made, for to try to understand how
the different flows have changed.
Chairman: You said that you had a full statement
there of some of the financial relationships. It would be helpful
to us if you could submit in writing to us a statement as to how
you, from the Palestinian perspective, see the varying flows of
aid over a run of recent years, not only to the Palestinian Authority
but for other particularly humanitarian causes, and if you could
indicate in that what you see as being the impact of the constraints
that have been imposed since the election of Hamas into the government.
If you could do that in the most simple form, I think it would
be of significant assistance to the Committee.
Lord Hamilton of Epsom: Including the flows
from Arab countries.
Chairman: Flows from all sources, yes.
Q105 Lord Swinfen:
In your reply to my question you gave the impression that the
people who were suffering most for lack of funds at the moment
were those who were members of Fatah because they were those who
were employed by the government. That gives me the impression
that the government employees were political appointments but
I would be interested in the statistics that you will be producing
for us if you could give some indication as to how this is affecting
the relationship between Hamas and Fatah, because it must have
a bearing on the stability of Palestine as a whole.
Professor Hassassian: For 40 years Fatah was
in charge of the Palestinian people. It led the struggle for national
liberation. Fatah was predominantly elected during the 1996 elections.
It controlled the public sector. Hamas was always been in the
minority of opposition. The best Hamas could get in terms of public
support was 13% in the past. With the corruption within Fatah,
and with the dire economic conditions, along with the settlement
activities, and the Israeli incursions, the elections were a protest
vote which gave Hamas the edge to win the elections in 2006. When
I say "Fatah", I refer to it, as a mass organisation.
It does not have an ideology. It believes in the liberation of
Palestine. It is not like a political faction that has been putting
people to support itself. All these people are considered to be
either pro-Fatah or independents but they have been in the public
sector. When we talk about the effect of non-payment of wages
to these people, we are trying to push these people towards being
extreme. That is why President Mahmoud Abbas says time and again
that the international boycott is not going to help him in bringing
Hamas forward. It will alienate him more and more from the people
because he fails to pay the bill at the end of the day. When we
talk about 162,000 public sector employees, it does not mean that
there are no Hamas people there because we do not have people
with badge signs of, "Hamas", "Fatah", "Popular
Front" or "Communist". These are assessments but
our impression is that the majority of these people are pro-Fatah
and not pro-Hamas.
Q106 Chairman:
What could the EU further do in relation to the capacity building
of the Palestinian administration? The second matter is in relation
to the progress made in relation to the security sector. Could
we have a sentence on each?
Professor Hassassian: If we talk about the capacity
building, there has been a lot of partnerships evolving along
the process since 1993. One of them is the Euro-Med Partnership.
That has been very instrumental in enhancing the prospects for
peace in the Middle East. However, it has failed in my opinion
because the EU lacked more of an assertive, political role in
the peace process. Indications are that actions by the US do not
reflect the latter's enthusiasm about the idea of having such
a relationship between the PA and the Europeans. Last but not
least, the EU has increased inward looking more today, as the
accession of 10 new Members, the eastern bloc, which consumed
much of the EU political and financial resources at the expense
of expanding. Still we believe that the capacity building that
has been rendered by the EU to the Palestinians has been phenomenal.
I think it is moving in the right direction. Today we have experts
in my part of the world that have been influenced and trained
vigorously in trying to create that kind of capacity. On the question
of security, the EU played a phenomenal role in the area of security
by giving training for our officers and in the area of reform,
for example, it played a seminal role in the reform of our judicial
process and in training our police administration how to understand
the law, how to implement the law. I think the Europeans have
played a pivotal role in developing our expertise in those areas
which are extremely important.
Q107 Lord Lea of Crondall:
There is not much evidence of diversion to eastern Europe, I would
have thought, if you look at the quadrupling and quintupling of
the EC since 2000, but that will come out in your statistics.
How do you go about assessing the success of the EU's operational
missions?
Professor Hassassian: In all fairness, all those
missions that have been dedicated to work in helping the Palestinian
people in their infrastructural development, in their capacity
building, in the development of their human resources, have been
very efficient. The disruption of Israeli incursions and the policy
of Israel that has disrupted the performance of the EU in the
occupied territories has stalled the development of such instruments
that have been very helpful in developing the capacity building
for a viable state. The occupation has played a detrimental role.
We cannot undermine the fact that the Israelis have not been very
helpful, cooperative or happy to see the involvement of the Europeans
in building capacity for the Palestinians. The intention of the
Israelis is still not to have an independent Palestinian state.
What we are seeing on the ground are concrete steps for aborting
the two state solution, with the building of the apartheid role,
with the thickening of the settlements, with the imposition of
military checkpoints and with the closures of the borders and
the prohibition of the access of freedom of movement and goods.
All that is not helping the Europeans in carrying out their missions
in the development process of the Palestinians. I do not believe
that there are certain pitfalls in the mechanisms that were put
in by the Europeans.
Q108 Lord Lea of Crondall:
Have there been audit studies on the cost effectiveness in your
administration as well as the EU auditing?
Professor Hassassian: Yes, there have been some
studies and if you need me to I could supplement that in the statistics.
Lord Lea of Crondall: I think it would be interesting.
Thank you.
Q109 Lord Anderson of Swansea:
We have talked so far about government to government and EU to
your authority. Clearly in current times of internal instability,
it is very difficult to attract private sector investors. Can
you say a little about your own involvement, successes or otherwise,
with the City of London as a major mobiliser of funds? When, as
we hope, conditions stabilise there will be a greater possibility
for private sector investment.
Professor Hassassian: Our private sector is
primarily based on tourism. 80% of the people living in the Bethlehem
area are totally dependent on tourism. With the building of the
apartheid wall, Bethlehem is like a prison. We do not receive
any tourists and our hotels have zero occupancy today. The souvenir
shops are not selling their products. The Israelis bring tourist
buses. They take the tourists to the church, they get out but
they do not allow them to eat or spend a single penny there. 58%
of the income in Jerusalem comes through the private sector which
is also based on tourism. We have seen the extent to which the
Israelis have been controlling that. The private sector is very
important. We believe that the market economy through private
sector investment is the only way for democratisation, for building
a solid civil society, and to believe in a liberal way of trying
to develop our society.
Q110 Lord Anderson of Swansea:
Have you tried to court the City of London as ambassador for your
people?
Professor Hassassian: I am not a career diplomat;
but a political appointee. I come from an academic background.
I was advised by the Consul General of Britain in Jerusalem not
to meddle in two affairs. One, not to meddle in the visa affairs
and second, not to be engaged in commercial activities.
Q111 Lord Anderson of Swansea:
Could you answer about the enhanced European Neighbourhood Policy?
I do not know whether you have followed this. What expectations,
if any, do you have?
Professor Hassassian: As far as the European
Neighbourhood Policy, it has set certain objectives for the Palestinians.
Of course it is in the area of political and economic reforms.
Its agenda is to build a democratic entity through building institutions
and civil society and to have good governance, transparency, respect
for human rights, improving the Palestinian humanitarian conditions.
Specifically, the European Neighbourhood Policy tried to upgrade
the scope and intensity of political cooperation between the PA
and the European Union. It stimulated investment and growth in
the occupied territories for more cultural and scientific links,
supporting technical assistance, and in the final analysis I believe
there are deepening trade and economic relations. The Euro-Med
Partnership started with the Barcelona declaration of 1995 and
it is good that you have referred to this because I think it is
very important. The PA believes that it formulated a strong partnership
with the Euro-Mediterranean in establishing good cooperation at
all levels. I believe that, we hope, in 2010 we will develop a
free trade area. This is the idea behind the EU Neighbourhood
Policy.
Q112 Lord Anderson of Swansea:
I was a little surprised at your suggestion that you had been
directed by our consul general in Jerusalem not to meddle with
commercial matters. I was thinking specifically of financial rather
than commercial, but surely is not the encouragement of commercial
relations between the UK and the Palestinian Authority part of
your remit?
Professor Hassassian: Let me qualify my statement
to be more specific on the background. I was instructed not to
encourage economic activity from Palestine to the UK but not the
other way round.
Q113 Chairman:
Have you any observations on the European Commission's role in
the observation of the election process?
Professor Hassassian: Our experience with regard
to the European Commission's role in the observation of the Palestinian
elections is exemplary. The EC provides hundreds of monitors,
as you know, including EU Members of Parliament and officials
in all Palestinian elections, contributing to the smooth democratic
process and the transparency we pride ourselves in. The EC directly
funds the Palestinian central elections. It pays all the bills.
The latter has shown a record of a high level of professionalism
and neutrality found only in advanced countries. This is instrumental
in helping us maintain our unwavering commitment to a political
system based on democracy and pluralism. We invite and call upon
the EC to continue supporting the building of our viable, democratic
entity.
Q114 Chairman:
Can I say on behalf of the Committee you have had a real tour
de force today. You have had a wide range of questions and we
are very grateful for your answers. We have taken a transcript
of the proceedings. That will be transmitted to you very speedily
and we hope that with equal despatch you can return it to us if
there are any corrections to be made. We look forward to hearing
from you particularly with that financial information that you
promised us. When you are sending it, if you have any doubt as
to whether we would be interested or not, veer on the side of
expansiveness in giving us the information rather than being restrictive.
We would very much appreciate that. On behalf of the Committee,
I would like to thank you very much for coming before us today.
Professor Hassassian: Thank you very much and
if I have not answered any of your questions I do apologise. I
do not claim to be an expert on everything but I have responded
to the best of my knowledge.
Chairman: Thank you.
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