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UNITED
NATIONS
A

        General Assembly
Distr.
GENERAL
A/56/15 (Part III)
23 October 2001

Original: English

Report of the Trade and Development Board on its
forty-eighth session*

(Geneva, 1 to 12 October 2001)

D. OTHER ACTIONS TAKEN ON SUBSTANTIVE ITEMS

...

2. Consideration of other relevant reports: Report on UNCTAD's assistance to the Palestinian people (Agenda item 5 (b))

2. At its 924th plenary meeting, on 4 October 2001, the Board took note of the secretariat's report on UNCTAD’s assistance to the Palestinian people (TD/B/48/9) and of the statements made thereon and decided to submit the account of its discussion to the General Assembly in accordance with General Assembly resolution 47/455. (For the account of the discussion, see annex II below.)

...


Annex II

DISCUSSION IN THE TRADE AND DEVELOPMENT BOARD UNDER AGENDA ITEM 5 (b): CONSIDERATION OF OTHER RELEVANT REPORTS: REPORT ON UNCTAD's ASSISTANCE TO THE PALESTINIAN PEOPLE


1. For its consideration of this subitem, the Board had before it the following documentation:

"Report on UNCTAD's assistance to the Palestinian people" (TD/B/48/9).

2. The Coordinator or Assistance to the Palestinian people introduced the secretariat's report on UNCTAD's assistance to the Palestinian people, which contained an update of progress achieved in implementing technical assistance activities for the Palestinian people. In line with the link between operational and analytical work the report also examined the impact of the recent crisis on the Palestinian economy. It demonstrated that the crisis had adversely affected economic performance, while revealing continued vulnerability of the Palestinian economy to external shocks and deep-seated structural deficiencies. Those arose largely from the impact of prolonged occupation and had yet to be addressed effectively.

3. Despite a major development effort since 1994, all-pervasive challenges to the sustained development of the Palestinian economy remained as influential and debilitating as when first analysed by UNCTAD in the early 1990s. While recognizing the development challenges that the crisis posed for Palestinian Authority economic policy-makers, the findings of UNCTAD research nonetheless allowed for a reassertion of confidence in realistic hopes for a better development future for the Palestinian people.

4. International efforts in favour of Palestinian economic development had also been adversely affected by the recent crisis. However, UNCTAD advisors and experts had maintained an active presence in the field, despite interruptions and uncertainties. This demonstrated the secretariat's commitment to implementing its mandate in the context of sustained international assistance to the Palestinian people, as called for by UNCTAD X and the General Assembly.

5. UNCTAD research on the Palestinian economy had led to a careful matching of secretariat mandates and expertise with the relevant development needs of the Palestinian people and with available extrabudgetary resources, in regular consultation with Palestine and with other concerned parties. Secretariat project proposals had attracted resources from a number of donors. He reported on progress of work in four key areas, namely: debt management system; reform of customs procedures and regulations and related automation; training activities in the area of small and medium-size enterprise development; and commercial diplomacy training and related advisory services.

6. He expressed the secretariat's gratitude for the generosity and foresight exhibited by donors to date, though important proposals in several other areas remained unfunded. In particular, this had constrained the secretariat in responding to an urgent request from the Palestinian Authority for coordinated technical assistance from UNCTAD and ITC to address some of the urgent needs that had arisen in the Palestinian trade sector. He concluded by renewing the secretariat's appeal to all members of UNCTAD to consider intensifying contributions to these and other priority areas of technical assistance to the Palestinian people.

7. The representative of Cuba, speaking on behalf of the Group of 77 and China, thanked the secretariat for its continued delivery of valuable technical assistance to the Palestinian people. His Group was pleased to see how the secretariat had responded over the years to the changing regional circumstances and to its evolving mandate in this area.

8. The current focus of the secretariat's work programme for the Palestinian people was on operational activities, backed up by research and analysis, and that was the most appropriate and effective contribution UNCTAD could offer to the Palestinian people. He noted that the secretariat had been able to intensify the scope of its assistance and the resources devoted to this issue, in line with the Bangkok Plan of Action. He thanked those States and international organizations that had already made contributions to UNCTAD projects of technical assistance to the Palestinian people, and he urged that such support should continue, especially in the light of the current difficult conditions facing the Palestinian economy.

9. The tragic confrontation that had engulfed the occupied Palestinian territory since October 2000 had dealt a serious blow to the Palestinian economy and to the achievements of the Israeli-Palestinian interim period economic accords. The severe losses in national income, the widespread unemployment and growing poverty, the impact of closures and other restrictive measures on Palestinian trade and other sectors were deplorable developments for a people that had already suffered so much.

10. The hope and possibility of' emerging from this crisis represented one of the key points of the secretariat report, highlighting the interdependence between development and peace. His Group wished to reaffirm its belief that only through full implementation of all relevant UN resolutions could a just and lasting settlement be forged that recognized the rights of all peoples and States, including Palestine, to enjoy peace, security and development.

11. The representative of Egypt, speaking on behalf of the African Group, said that the developments in the Palestinian economy during 2000-2001 had mired it in a crisis of unprecedented depth and severity that would render a genuine recovery difficult to achieve for many years to come. Domestic output had been cut by almost half, the rate of unemployment had grown rapidly and sharply, and poverty indicators had grown dramatically. In addition, the economy had accrued significant infrastructure losses. Clearly all economic sectors had suffered severely during this period.

12. Social services had been subject to severe deterioration, reducing the already limited capacities available to meet the basic needs of the Palestinian people and adding more misery to life in Gaza and the West Bank. Practices of the occupying forces which had led to this intolerable situation needed to be ended, especially the documented and repeatedly condemned practices of collective punishment and closure policy, which had cost the economy an estimated US$ 8.6 million in losses.

13. The role of UNCTAD, development agencies and donors remained a comer stone in efforts to allow the Palestinian authority to reinforce its capacity to address the development needs of the Palestinian people, though the task of developing the Palestinian economy appeared to be more formidable than ever. Within this context, he welcomed the resumption of UNCTAD's technical assistance activities for the Palestinian Authority in mid-2001, moving towards the implementation of programmes that were considered of great help in the areas of capacity building and improving economic management. However, the lack of stability and funding had prevented the commencement of technical assistance requested by the Palestinian Authority in the areas of transit trade and transport and international procurement of strategic food commodities.

14. The African Group had urged donors to provide necessary funds to allow UNCTAD to reactivate projects and implement new projects. UNCTAD's technical assistance projects were pivotal in alleviating the conditions facing the Palestinian people. He called upon UNCTAD and the donor community to continue supporting these activities designed to assist the Palestinian people in an extremely critical economic situation. In conclusion, he reiterated the support of the African peoples and countries for the Palestinian people's struggle to achieve a comprehensive, just and lasting peace which would be the basis of prosperity and security for the entire region.

15. The representative of Belgium, speaking on behalf of the European Union, said that the secretariat report provided very instructive reading and allowed for an appreciation of the difficulties arising from an economic and political crisis that had lasted for a year. He continued to hope that the Palestinian economy, which was still very vulnerable, could restructure and that trade exchanges with the sub-region could develop. That would depend on the firm will of the parties to reach a just, durable and comprehensive peace on the basis of the principles established by the Madrid, Oslo and subsequent accords and in conformity with the pertinent United Nations resolutions.

16. Despite the past dramatic events and current tensions, the field work of UNCTAD for the Palestinian people retained all its usefulness. It was necessary to continue to prepare for the future, to train people, to reinforce institutional capacities, to better manage the macro­economic situation, to develop small and medium-size enterprises and to promote trade. To this end, UNCTAD should, within its areas of competence, provide carefully planned, well­targeted and demand-driven assistance. This could help to develop the local economy and to aid the Palestinian Authority in better serving its people.

17. The European Union was the main contributor of aid to the Palestinian people and was also the main extra-regional trade partner of the Palestinian Authority. The European Union was convinced that for two peoples which must coexist, there was no alternative to engaging once and for all along the path of peace negotiations, regarding which recent official meetings provided hope. In conclusion, he stated that, in this difficult period, everything should be done so that fear, hatred and violence did not win the day and so that the dialogue for peace intensified as soon as possible.

18. The representative of the Islamic Republic of Iran, speaking on behalf of the Asian Group and China, said that it was a testament to the importance of the issue under discussion, as well as to the commendable manner in which the secretariat had implemented its evolving mandate in this area, that assistance to the Palestinian people continued to feature regularly on the agenda of the Board and in the secretariat's work programme. He thanked the secretariat for its report, which sent relevant messages at a critical stage in the region and the world.

19. He was also pleased to learn that the past year's adverse developments had not distracted the secretariat from its focus on the Palestinian people's long-term development needs and efforts. The secretariat had made serious efforts, in cooperation with ITC, to respond to some of the urgent technical needs emerging from the recent crisis. The secretariat's work programme in this area was a good example of a successful match between the secretariat's analytical and technical capacities on the one hand and its concrete operational activities on the other. The focus on institution and capacity building efforts and on high-quality advisory and training services in several areas provided Palestine with the best that the secretariat could offer in technical cooperation activities.

20. He noted that the Israeli measures against the Palestinian people entailed a range of restrictions on the Palestinian economy and workers, leading to massive losses in national income, widespread unemployment and destitution. The events of the past year had aggravated and exposed the structural weaknesses of the Palestinian economy. The failure to address these problems so far was rooted in the effects of prolonged occupation and the continued denial by Israel of the Palestinian people's rights. Even an interim peace period of six years, which had granted Palestine some limited economic autonomy and an opportunity to rebuild and develop, had proved inadequate to reverse long-standing imbalances. It came as no surprise that the vulnerable Palestinian economy had been shattered so swiftly and comprehensively by Israeli measures.

21. The crisis, at both its political and economic levels, had taught some useful lessons at a time when the globalized world faced new threats and development challenges. In particular, peace and development had been shown to be inseparable, and peace in the Middle East required justice and equity , something that had yet to be offered to the Palestinian people. Furthermore, only through recognition of the legitimate national rights of the Palestinian people, as enshrined in United Nations resolutions, could a just and comprehensive peace be attained. In concluding, he called on UNCTAD to continue its work to assist the Palestinian people with a view to identifying and eradicating the long-standing root causes of underdevelopment.

22. The representative of Palestine commended the secretariat for its outstanding and continuous efforts to provide technical assistance to the Palestinian people in all areas falling within UNCTAD's expertise. He expressed deep appreciation to the Secretary-General of UNCTAD for the special attention he had devoted to the secretariat's programme of assistance to the Palestinian people, thus allowing it to continue to develop in a very difficult political context. He also highly appreciated the commitment of the secretariat experts and staff who had continued technical assistance missions and activities despite the difficult field conditions, while launching a number of projects to support the Palestinian National Authority's long-term development efforts.

23. The secretariat report provided an accurate analysis of the structural problems that impeded the development of the Palestinian economy and the predicaments that had befallen the Palestinian economy during 2000-2001. Since September 2000, the Palestinian territory had been subjected to a range of Israeli military measures, including a siege imposed on Palestinian towns, that had persisted over prolonged periods. These measures had had adverse effects on the entire economy, unprecedented since 1967. They had stemmed from an Israeli policy that aimed at demolishing the infrastructure of the Palestinian economy and putting an end to the Palestinian dream of establishing an independent state with a prosperous economy.

24. He noted that, according to recent statistics, total losses accrued by the Palestinian economy over the last year had reached at US$ 2.7 billion. The current crisis had destroyed the benefits reaped from development efforts over the last three years, whereas signs of economic prosperity had been clearly visible before the beginning of the crisis. The current conditions in the Palestinian territory, characterized by the absence of political stability and weak economic infrastructures, had resulted in a severe reduction of investment opportunities and the absence of foreign investment, while unemployment had augmented the burden of the Palestinian National Authority. The implementation problems affecting UNCTAD projects confirmed the view expressed by Palestine for many years that economic development could not be achieved under Israeli occupation that had persisted for more than 34 years.

25. He expressed his appreciation for the financial support provided by donor countries to enable UNCTAD and other international organizations to implement assistance projects for the Palestinian people. However, the Palestinian people was calling for justice and solidarity from the international community. Though the Palestinian people's memory was replete with pain and tragedies, they aspired to a peace that restored their rights and ensured stability in the region. In conclusion, he said that Palestine appreciated the growing recognition of several countries, including the United States of America, of the Palestinian people's right to establish an independent state alongside the State of Israel. This should be translated into concrete measures, based on the decisions of the Security Council and other relevant United Nations resolutions which called for Israel to withdraw to the 4 June 1967 borders, to be replaced by the authority of the independent State of Palestine. This would lay the correct and strong basis for a just and comprehensive peace beginning in Palestine and spreading throughout the entire region.

26. The representative of Norway emphasized that developing the Palestinian economy was of paramount importance for building support among the Palestinian people for the continuation of the peace process. UNCTAD's technical assistance to the Palestinian Authority supported these goals. He commended UNCTAD for its work during a very difficult time for the Middle East, and also for reorienting part of its programmes as a response to the Palestinian Authority's economic crisis. His delegation strongly supported UNCTAD's continued assistance to the Palestinian people within the mandate of the institution and in cooperation with other agencies.

27. He noted that, while UNCTAD's assistance could play a catalytic, technical role in preparing the Palestinian Authority to better withstand the challenges of the present crisis, it could not solve the crisis. The solution to the Palestinian Authority's economic crisis, as well as the crisis in the peace process, lay in the full implementation of the recommendations of the Mitchell Report and the Tenet understandings, leading to the resumption of peace­negotiations based on UN Security Council resolutions 242 and 338, as well as the Oslo Accords. Since the signing of the Israeli-Palestinian Declaration of Principles, the international community had invested considerable resources to support the Palestinian Authority in building a Palestinian administration capable of delivering much needed services. The current crisis imperiled the significant progress made over the past seven years, and he urged the two sides to resume final status negotiations as soon as possible.

28. The representative of Israel noted that, during the previous year's discussion of this agenda item, he had expressed the hope that the violence that had erupted only a few days earlier would soon be brought under control and that the political process would resume. However, since then the situation in the region had only deteriorated. The violence had caused unimaginable suffering for all peoples of the region, as well as huge economic losses. The only solution to this crisis was to implement a full ceasefire and then to resume political negotiations based on the Mitchell Committee recommendations.

29. The report prepared by the secretariat made it clear that, prior to the current wave of violence, the Palestinian economy had been pursuing a path of recovery and vigorous growth. This trend would have continued if the political process had remained on track, especially if the structural problems of the Palestinian economy could have been addressed. The negative situation facing the Palestinian economy was not surprising, as it was impossible to sustain positive economic development in such 'a violent environment. The wave of violence had also badly affected other economies in the region, including the Israeli economy.

30. The past year had been a very bad one for the peoples of the region, and the global economic slowdown in the aftermath of the recent terrorist attacks on the United States might well aggravate the situation; It was imperative to bring the violence to a halt and then to restart the political process in order to reach a political compromise. He continued to regard the economic well-being of the Palestinians as being of importance to Palestinians, Israelis and the region as a whole.

31. The representative of the United States of America thanked the secretariat for its report and its activities of assistance to the Palestinian people. He shared the frustration expressed by many delegations with regard to the continued violence in the region and with the absence of progress in political negotiations. The United States was working hard to bring an end to the violence and to implement the Mitchell Committee report. One-sided condemnations did not help in moving the peace process forward. The recent meeting between Chairman Arafat and Foreign Minister Peres was an important step, and he called on the parties to move forward to implement the ceasefire, remove restrictions and resume negotiations.

32. The representative of the League of Arab States expressed his grave concern at the manner in which the Palestinian economy had been sabotaged. This concern was aggravated by the fact that, compared to the last few years, and despite notable support by international organizations and donor countries, the Palestinian economy was going from bad to worse due to Israeli measures. The occupying authority was demolishing not only the economy's infrastructure, but also its superstructure. The measures taken had inflated unemployment rates, aggravated the current crisis, and foiled international efforts to develop the economy, making them meaningless. The international community should adopt a firm stand so that its efforts could bear fruit. International organizations and donor countries should act not only as payers but also as players and as main partners in achieving sustainable development. He thanked UNCTAD, particularly the Assistance for the Palestinian People Unit, for supporting the Palestinian economy.

33. The representative of Algeria expressed his appreciation for the assistance provided to the Palestinian people by UNCTAD and other agencies, as well as for the support of donors, in particular the European Union. However, Israeli practices had jeopardized these efforts and rendered them ineffective. The social consequences of these practices had been dire, leading to a chaotic and disastrous situation for the Palestinian people. The secretariat report had correctly identified the main problem facing the Palestinian economy, namely the structural weaknesses arising from prolonged occupation. In concluding, he noted it was often stated that Israel's security was at stake, but that security could only be assured alongside security for all other peoples in the region.

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