Gary Fitleberg, December 1, 2004

The World Bank wants to condition increased international aid to the Arab "Palestinians" upon a series of measures to be taken by Israel and the Palestinian Authority/Palestine Liberation Organization, according to a report it issued yesterday, ahead of the conference of PA/PLO donor countries in Norway next week.

Foreign Minister Silvan Shalom will be meeting today with representatives of the donor countries to present Israel's position.

Only if the parties take sufficient steps to restart the economy on a path toward growth will there be reason to convene a recovery conference of the donor countries, which will be asked to promise additional sums for development purposes, the report stated.

The report requires Israel to ease closures and restrictions on mobility in the territories. The PA/PLO is required to carry out thorough security, economic and judicial reforms and shed the corrupt image of the PA/PLO civil service, to bolster investors' faith.

The World Bank representative in the territories, Nigel Roberts, told Haaretz yesterday that international aid to the PA/PLO doubled during the intifada, to about a billion dollars annually, but the result was an economic collapse of historic proportions. Donors cannot be expected to save the Arab "Palestinian" economy, Roberts said, without first being assured that suitable conditions exist, and both sides worked to create the proper environment.

The World Bank report followed talks over several months with Israeli and PA/PLO representatives about the economic ramifications of the disengagement plan (though the bank's recovery plan applies to the entire disputed territories of Gaza, Judea & Samaria (wrongly called "West Bank").

The process was unconventional, Roberts observed, in that Israel decided it has no Arab "Palestinian" partner, but it could not disengage completely unilaterally.

World Bank officials and representatives of several donor countries held separate talks with the Israeli team, headed by the national security adviser, Giora Eiland, and the deputy director-general for economic affairs at the Foreign Ministry, Yossi Gal, and with the Palestinian team headed by Finance Minister Maher al-Masri. The sides did not meet and exchanged messages through the international officials.

The report reveals a serious dispute between the World Bank and Israel and sharply criticizes Israel's closure policy, which the bank views as the primary obstacle to Palestinian economic recovery. Israel offered to ease closures somewhat, but in Robert's view that is not enough. The bank says that internal closures burden Palestinian trade and export, and substantially raise transport costs.

The donor countries rejected Israel's proposal for upgrading Arab "Palestinian" roads in the territories of Judea & Samaria because of PA/PLO opposition (reported this week in Haaretz). Israel also proposed connecting the territories to the Israeli rail network to assist cargo transport. Bank experts vehemently oppose the Israeli-dictated system of transferring loads "back-to-back" between trucks from the territories and Israel, and propose streamlining the process by integrating technology and more efficient management of the crossing points.

Israel proposed establishing more sophisticated crossings and asked for $135 million in international aid to install technology for easing transport. However, the World Bank wants the crossings situated on the Green Line, following the ruling on the separation fence route by the International Court of Justice in The Hague. The Israeli plan calls for three crossings to be established within the territories of Judea & Samaria (wrongly called "West Bank"). The bank's proposal is to experiment with two crossings built on the Green Line - Karni in the Gaza Strip and Jalameh in northern Samaria.

The bank also favors building a seaport in Gaza and restoring its airport. In the interim, the bank proposes establishing a shallow-water port, from which cargo would be transported in small craft to an Egyptian port, and launching a helicopter flight route from Gaza to Jordan.

The report also considered the fate of assets of evacuated settlements. The bank recommends the PA/PLO exercise maximum transparency in allocating those assets and engage public institutions in the process.

Gary Fitleberg is a Political Analyst specializing in International Relations with emphasis on Middle East affairs.

Copyright © 2004 Gary Fitleberg