Press Release
Department of Public Information · News Coverage Service · New York

20 June 2000



(Received from a UN Information Officer.)

CAIRO, 20 June -- "The establishment of a lasting peace between Israelis and Palestinians cannot solely depend on signed accords and eloquent declarations. Negotiated agreements are essential, as are mutually advantageous economic relations", Chairman of the Committee on the Exercise of the Inalienable Rights of the Palestinian People, Ibra Deguene Ka (Senegal), said today at the opening of the United Nations Seminar on the Prospects for Palestinian Economic Development and the Middle East Peace Process.

The improvement of living conditions in the Palestinian territory, the establishment of cooperative relationships and business partnerships throughout the region and the promotion of development, were essential foundations for peace and were in the interest of everyone, Arabs and Israelis alike, he said.

Secretary-General Kofi Annan, in a statement read out by Hazem Abdel Aziz El Beblawi, Under-Secretary-General and Executive Secretary, United Nations Economic and Social Commission for Western Asia, said that much remained to be done on such issues as Palestine refugees, Jerusalem, settlement, borders and water resources. Both the Israelis and the Palestinians should recognize the urgency of advancing the peace process towards the achievement of a comprehensive and lasting peace. It was critical not to let precious time slip away, he stressed.

Minister for Economy and Trade of the Palestinian Authority, Maher Al-Masri said the Palestinian Authority had overcome numerous problems and looked forward to establishing an independent State with its hand extended to all neighbours, including Israel. It could not, however, accept any change in the details of relevant United Nations resolutions.

At the two-day Cairo meeting, convened by the Palestinian Rights Committee, comprising governments, intergovernmental and civil society organizations and international experts will discuss the current state of the Palestinian economy, the factors that affect it and its future prospects, with a view to mobilizing greater support for the attainment of the legitimate rights of the Palestinian people.

Assistant Minister of Arab Affairs and Permanent Representative of Egypt to the League of Arab States also spoke at the opening session. Other statements were made by the representatives of the Russian Federation, Brazil, Pakistan, Malaysia, Norway, Tunisia, South Africa and Japan. Representatives of the United Nations Economic and Social Commission for Western Asia, the Arab League, the Organization of the Islamic Conference and the United Postal Union also spoke.

Following the opening address, the Seminar heard speakers in a panel on "Palestinian institution-building and economic performance during the interim period: achievements, shortcomings and future tasks." Presentations were made by Mr. Al-Masri, United Nations Development Programme Senior Adviser Omar Daoudi, and Head of the Economic and Monitoring Unit of the Office of the United Nations Special Coordinator (UNSCO) Salem Ajluni.

The Seminar will resume this afternoon when it will hear a panel presentation on "Palestinian development objectives and strategies".

Opening Statements

MUSTAFA EL FIQI, Assistant Minister for Arab Affairs and Permanent Representative of Egypt to the League of Arab States: Since the Cairo meeting sponsored by the Palestinian Rights Committee last June, the United Nations has continued to fulfil its role regarding the Palestine question. Subsequent to that meeting, the Geneva conference on the applicability of the Fourth Convention in the Occupied Territory drew an unprecedented number of participants. The current seminar should demonstrate a clear view of the situation in the Palestinian territory and encourage donor countries to support the new Palestinian State when it is declared. The new State will need development and training resources to make up for the problems it has inherited from the Israeli occupation. Despite economic achievements, the Palestinian Authority has continued to suffer from measures taken by the Israelis. The present situation requires a new vision for an effective and comprehensive international role to assist the Palestinian Authority on the path to sustainable economic development. It is hoped that the peace process will succeed in accordance with Security Council resolutions and recent agreements and that a final agreement will be concluded in September.

HAZEM ABDEL AZZIZ EL BEBLAWI, Under-Secretary-General, Executive Secretary, United Nations Economic and Social Commission for Western Asia, speaking on behalf of the Secretary-General of the United Nations, Kofi Anan: Despite recent difficulties, both the Israelis and the Palestinians are demonstrating a strong commitment to making tangible progress and achieving a final status agreement. Still, much remains to be done on such issues as Palestine refugees, Jerusalem, settlement, borders and water resources. Both sides should recognize the urgency of advancing the peace process towards the achievement of a comprehensive, just and lasting peace in the Middle East based on Security Council resolutions 242 and 338. The international community should continue to assist the Palestinian people in meeting their social and economic development needs so as to create a solid foundation for future peace and stability in the region. The United Nations will continue its activities in developing Palestinian infrastructure, enhancing institutional capacity and improving the living conditions of the Palestinian people.

The contributions of donor countries continue to be essential. The Ad Hoc Liaison Committee, the principal body for donor assistance coordination, is a useful mechanism for the discussion of policy related issues. It is important to support the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), which, despite chronic financial constraints, continues to provide humanitarian assistance and essential basic service to some 3.7 million Palestinian refugees.

Both the Israelis and the Palestinians face the historic challenge of ending decades of animosity and suspicion, mistrust and alienation. It is critical not to let precious time slip away. The international community must do its best to help clear the remaining obstacles on the road to peace. The United Nations, for its part, will remain at the disposal of the parties in their quest for peace and reconciliation.

IBRA DEGUENE KA, Chairman of the Committee on the Exercise of the Inalienable Rights of the Palestinian People: The importance attached to international assistance in meeting the economic and social challenges facing the Palestinian people cannot be overestimated. In view of the continued difficulties experienced by the Palestinian economy, the precarious living conditions of segments of the Palestinian people, and the need to strengthen the national capabilities of the prospective Palestinian State, the Committee was obliged to sensitize further the international community to help the Palestinian people overcome their numerous difficulties and begin rehabilitating their economy. The improvement in living conditions in the Palestinian territory, the establishment of cooperative relationships and business partnerships throughout the region and the promotion of development, are the essential foundations for peace and are in the interest of everyone, Arabs and Israelis alike.

Since its inception in 1993, the Palestinian Authority has been operating under conditions of particular adversity and complexity. By the end of the interim period, it has become directly responsible for the civilian affairs of the vast majority of the Palestinians living in the Occupied Territory. Yet, the Palestinian Authority lacks control over key resources, such as land and water and doesn't have direct access to external markets. A large share of its budget remains dependent on transfers of taxes and duties collected by Israel. The Authority administers education, health care and other basic services. It maintains public law and order, tries to develop the economy and to build Palestinian institutions. The Committee, by organizing today's seminar, felt it useful to provide a framework for a broader discussion of the prospects for Palestinian economic development, bringing together Palestinian experts with their international counterparts, including Israelis.

The establishment of a lasting peace between Israelis and Palestinians cannot solely depend on signed accords and eloquent declarations. Negotiated agreements are essential, as are mutually advantageous economic relations. It is also crucial that Palestinians and Israelis, from all walks of life, enjoy a true peace, a better sense of security, improved living conditions, opportunities for a brighter future for themselves and their children, and the respect and dignity for which every human being yearns.

MAHER AL-MASRI, Minister for Economy and Trade, Palestinian Authority: The Palestinian people and leadership have always stood by the United Nations resolutions concerning the question of Palestine. The Palestinian question is and has always been at the heart of the Middle East conflict. The occupation of Jerusalem and the settlements are illegal. All agreements on the resolution of the issue should be based on international legitimacy, with the United Nations playing an essential role.

When the Palestinian Authority returned to the homeland, there were no institutions in place and challenges to the Authority abounded. It has not been easy. The United Nations helped to establish the necessary infrastructure. Palestinians cannot reach any region in the world without passing through Israel. The full closure of surrounding borders and the occasional obstacles to passing from different parts of the West Bank present numerous difficulties. The Palestinian people wants to become part of the Arab nation by establishing an independent State with Jerusalem as its capital. Thanks to international help, the Authority has been able to establish the institutions of the State to be.

There have been numerous problems but the Authority has been able to overcome them and its achievements and accomplishments have been recognized internationally. The Palestinian Authority looks forward to establishing an independent State with its hand extended to all neighbours, including Israel. The Palestinian State wants to become an integral part of the world economy but it was up to the world and the United Nations to help establish institutions and to insist on the implementation of Untied Nations resolutions. The Palestinian people could not accept any change in the details of those resolutions. It cannot once again become a victim. Stability and peace in the Middle East could not become a reality without a just peace. Economic support was essential to prevent instability and poverty from becoming paramount. All efforts should be pooled to achieve justice and peace.

Representative of the Russian Federation: The Palestinian autonomy has been successful in establishing the basic institutions of the public sector, reducing the budget deficit and creating new jobs. Its economy, nevertheless, is still in a state of formation, the socio-economic situation being far from satisfactory. Socio-economic development in the Palestinian territory is supposed to be an inalienable part and an important foundation of the peace process. The international community must focus on how to promote increasing investments, expand Palestinian access to international markets and solving employment problems, as well as strengthening management institutions and economic legislation. A radical solution for the issues of economic development of the Palestinian territories is impossible unless the Palestinian people exercise their legitimate national rights and achieve a fair solution for their problem. It can provide a normal function of the economy and acceptable living conditions for Palestinian citizens only within the framework of a Palestinian State, in conditions of equal rights and opportunities.

Representative of Brazil: Events such as today's seminar are essential for the interchange of ideas and the search for solutions concerning the intricate Palestinian cause. They also provide the international community with an additional opportunity to reaffirm the necessity of respect towards the inalienable rights of the Palestinian people. Brazil supports the idea of convening such meetings at international as well as regional levels. The United Nations has an important role in guaranteeing the exercise of Palestinian rights, in improving their living conditions and in promoting the social and economic development of the occupied territories.

Representative of the League of Arab States: Economic development and the political situation are closely interlinked as is observed in the practice of the Israeli occupation policy aimed at tying the Palestinian economy to the State of Israel. The peace process has elicited commitments from the donor countries to assist the Palestinian people to alleviate the consequences of the Israeli occupation and to enable them to build institutions and the necessary infrastructure. That commitment, however, has been less than what was hoped for and has affected the success of the efforts of the Palestinian Authority. The League of Arab States will spare no effort to help the Palestinian people to establish the necessary framework for economic development, peace and stability. Israel continues to maneuver to avoid fulfilling its commitments to the peace process, placing many obstacles to the implementation of Palestinian rights. The violation of agreements by Israel continue to impair that implementation, thus increasing doubt about the peaceful intentions of the Israeli Government and resulting in continued difficulties in the region.

Representative of the Organization of the Islamic Conference: The peace process is going through its most delicate phase. The Israeli policy of procrastination and prevarication prevents the implementation of the major parts of the peace agreement. As 13 September draws near, everything points to the Israeli refusal to withdraw to the 1967 borders or to implement Security Council resolutions and to discuss issues such as the return of Palestinian refugees to their homes. The Palestinian people are experiencing extreme hardships as a result of the stranglehold imposed by the Israeli authorities. Economic development requires peace and stability. The Israelis under various pretexts are confiscating land and water. Border closures by the Israelis are aimed at keeping Israel as the only country with which the Palestinians can trade. Israel also keeps the fiscal returns on goods and commodities and does not revert them to the Palestinian Authority. Throughout the years of the occupation, Israel has bogged down the Palestinian economy. Israel must do its part to end the conflict, returning to 1967 borders and dismantling colonial settlements.

Representative of Pakistan: Pakistan has always supported the attainment of the inalienable rights of Palestinian people. The international community must stay involved to ensure the achievement of a just and durable peace. It must also help to overcome the severe economic difficulties being faced by the Palestinian people. Economic development will enhance the peace process. A major peace dividend will be economic cooperation between all the peoples of the region, enabling them to reap the rich fruits of globalization.

Representative of Malaysia: The peace process is now at its most promising and difficult stage. The international community must not allow this window of opportunity to slip by to finally bring peace and stability of the Middle East region. Malaysia is deeply concerned that the situation remains potentially volatile and calls on the parties concerned to revive the stalled peace process. The continued occupation by Israel of the Syrian Golan constitutes another major stumbling block. For peace to take root and flourish, it must be accompanied by economic growth and development as well as improvement in the social and living conditions of the people. The international donor community must continue to support the rehabilitation of the Palestinian economy and to ensure that the socio-economic development of the Palestinian society continues to be viable and sustainable. Malaysia has continuously supported the Palestinian people and has contributed $5 million for the reconstruction of the Gaza Strip. It annually contributes to UNRWA and has agreed to assist in the training of the Palestinian police force and civil servants, as well as to make available provisions for housing and telecommunications. Malaysia has also put in place an open-ended training programme for Palestinian pilots, with the cost of training borne by the Malaysian Government.

Representative of Norway: The Middle East peace process is closely linked to the prospects for Palestinian economic and social development. International support for this development has contributed to keeping the peace process on track during a critical phase and it has improved the quality of life of people in important areas. Norway is a major aid donor to the Palestinian Authority. It has also provided support for activities undertaken by various United Nations entities and pledged to maintain the same level of bilateral support for the five- year period 1999-2003, with continued involvement in water issues, planning, education and electrification sectors, as well as support for the reform of the Ministry of Finance. It hopes to consolidate and make its aid more efficient and better attuned to Palestinian development plans, as well as the donor coordination framework.

Representative of Tunisia: There is a close link between economic development and the need to achieve a just global solution that will enable the Palestinian people to achieve their full inalienable rights and to devote their efforts to sustainable development. That would enable the Palestinian people to build a solid economy capable of growing within the framework of stability. All the States of the region wish to help achieve peace. Tunisia looked forward to increasing all forms of cooperation with the future Palestinian State. Its cooperation has become tripartite allowing for cooperation with donor countries and others to help Palestinians. The international community, represented by the United Nations, is called on to end the restrictions and obstacles imposed on the Palestinian economy by Israel. There can be no peace without development and no development without peace. It is hoped that the international community will respond to the requirements and needs of the Palestinian economy.

Representative of South Africa: Today's Seminar highlights the fact that the sustainable and prosperous future of a Palestinian State is dependent on "economic peace", that is the freedom to develop the Palestinian economy. There have been great strides by the Palestinian Authority in developing the economy but there are many constraints and obstacles that Palestinian businessmen face such as tariff and non-tariff barriers, and the free movement of goods and people. Still, the Palestinian people have a justifiably proud reputation for their business and economic acumen. With a full and just peace, the Palestinian economy will flourish and develop.

Representative of Japan: The Government of Japan has contributed to the Middle East peace process through political support, active participation in multilateral negotiations, and economic assistance to the Palestinian people. With regard to political support, Japan tries to facilitate dialogues among the parties concerned and supports confidence-building measures. Every year the Government of Japan invites young diplomats both from Arab countries and Israel to visit Japan together to forge mutual understanding and respect among future generations.

Representative of the United Nations Economic and Social Commission for Western Asia (ESCWA): Like other entities, ESCWA has been engaged in the last years in supporting the economic development in the Palestinian territory. Meetings, information and publications have been used to raise and discuss the different issues of Palestinian development. More importantly, ESCWA analysed problems and suggested policy alternatives, provided advice on institution- building and on formulation and implementation of policies. The Commission's regional advisors supported various Palestinian institutions in the areas of agriculture, household and expenditure statistics, the system of national accounts, social development questions and issues of the liberalization of international trade and the World Trade Organization. Advisory services have also been recently provided to the transport sector, including the construction of the Gaza harbour. Training on issues such as agricultural development policy, gender statistics and hydrology and water harvesting was a further service provided by ESCWA.

Representative of the Universal Postal Union (UPU): The UPU has 189 member countries including those in the Arab region. The Palestinian people have the right to communication with efficient postal services. The congress of the UPU decided last year to recognize the right of the Palestinian Authority to exchange post with any member country without going through a third State. The UPU is paying particular attention to developing the provision of postal offices with teletronic equipment. Aimed at improving the central postal unit in the Palestinian territory, efforts are being undertaken to modernize postal services in Palestine.

Panel I

MAHER AL-MASRI, Minister for Economy and Trade, Palestinian Authority: Unemployment has dropped but the problem of public sector employment still had to be tackled. Per capita income is still about 10 per cent less that it was in 1993. A large part of Palestinian growth is dependent on endogenous factors rather than indigenous ones. The growth rate does not affect the lives of Palestinians because in real terms there was no increase in per capita income. There has been in fact, more poverty among Palestinians. A lot has been achieved but efforts must be made to improve the quality of life of the Palestinian citizen. The Palestinian Authority has to attack institutional issues and improve the performance of its service. Technical assistance was now better than before. The aim of the Higher Council of Economic Performance was to draft a policy that would be reflected in the improvement of the lives of the people and the performance of the Government. It would entail disclosure and transparency of Government activities and projects in which the Government was a partner and consolidating revenues into one account. Several conferences have been held with private enterprise on privatization.

Within its legal framework, the Palestinian Authority has drafted core financial and economic laws and has unified laws that existed separately in the West Bank and Gaza. Work is still ongoing and all basic laws on economy and finance will be functional by the end of the year. The importance of the information technology sector is also recognized. When the political situation is changed, foreign investment will flow into the future State. It is already part of the League of Arab States and wants to be fully integrated into the Arab economic area. It would like to have greater diversity and to utilize the United States free trade agreement and to go beyond the limitations imposed on it by the Paris agreements. Palestinians look forward to cooperation with Israel but also to the benefits granted to any emerging economy.

OMAR DAOUDI, Senior Advisor, United Nations Development Programme: Palestinian Authority institutions from ministries to the village level continue to experience a lack of capacity in certain areas to plan and implement projects; weakened social, economic and physical infrastructures inherited from the occupation; institutional weaknesses of governing institutions which have only had four to five years to develop; a rapid population increase; a lack of financial resources; centralized decision-making; and a need of responsible, transparent and accountable operations for financial management. Slow progress in the peace process serves to reinforce the need to transform the capacity of local government and the Palestinian Authority to provide adequate services and support to the Palestinian people

To help Palestinians surmount the obstacles they face, good governance is a crucial priority area. Without good governance, development efforts are undermined, or even doomed to failure. The gap between public expectations and actual results is growing in the area of institution-building. Responsive institutions worthy of continuing public confidence must be created. The Governance and Public Administration Unit at UNDP focuses on providing technical and capital assistance to the Palestinian Authority. It has also provided technical assistance in the area of public sector management, building the capacity of the Ministry of Planning and the International Cooperation, the Palestinian Development Plan, and supporting the training and technical assistance of ministries. The Palestinian territory has a wealth of human resources that should define the parameters for international assistance. A clear component for success involves looking to the more than 4.5 million expatriates in North America and Europe. UNDP has succeeded in involving more than 250 professional scientists, technologists and other experts in development projects under the Transfer of Knowledge through Expatriate Nationals scheme.

SALEM AJLUNI, Head, Economic and Social Monitoring Unit, Office of the United Nations Special Coordinator (UNSCO): Overall economic conditions in the Occupied Palestinian Territory have recovered relative to the recession of 1995-1996 when severe border closures resulted in unprecedented levels of unemployment, declines in real wages and household consumption and a noticeable increase in poverty rates. Since then, and especially in 1998 and 1999, economic growth has been sufficient to expand employment, substantially reduce unemployment and arrest the decline in real wages and per capita incomes.

There has been an estimated average of 67,000 new jobs in 1998 and another 47,000 in 1999. During the same period, the labour force (that is, the employed and the unemployed) grew by about 77,000 persons. The standard unemployment rate declined from about 20 per cent in 1997 to less than 13 per cent in 1999. About 29 per cent of the employment growth is in the public sector, labour flows to Israel increased. Higher employment -- both domestic and in Israel -- and reduced unemployment produced an 18 per cent increase in the real monthly wage to an average of about $340. Women's labour force participation and employment registered important gains as well.

The reduction in border closures and the regeneration of labour flows and wage income significantly contributed to renewed economic growth. Other elements in the recovery were the 23 per cent increase in public sector employment between 1997 and 1999 and public investment financed by donor countries. These sources of employment growth, however, are not sustainable. Further reductions in unemployment, which is still quite high by historical standards, will depend on growth in the domestic private economy.

The major challenge will be to create enough employment to absorb a labour force which, due to the young structure of the population, has been growing more rapidly than the population at large. A related challenge is to raise women's employment in the formal labour market as this will both raise family incomes and tend to reduce the presently very high fertility rates. Data for 1999 and 2000 already show weakening employment growth. The key to raising employment further will be private investment -- mainly domestic but also foreign -- which can augment productive and export capacities. A policy and enabling environment that maximizes productive investment will be critically important. In addition to the development of industrial and free zones and significant improvements in public infrastructure, future progress will depend on a more rapid pace of institutional and fiscal reforms on the part of the Palestinian Authority. Also, serious judicial reform and additional public infrastructure will be required. Furthermore, everything must be done to ensure that Israeli authorities do not continue to impede the free movement of Palestinian people and merchandise locally, regionally and globally.

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