Funding commitments roll in to boost Palestinian economy
Donors began committing funds from around the world today for the troubled Palestinian economy amid a renewed international push for a Palestinian state.
Tony Blair in his new role as Middle East envoy called the Paris meeting not just a donors’ conference but also a “state-building conference”.
Host, French President Nicolas Sarkozy, called it a turning point in Middle East peace efforts after Israeli-Palestinian negotiations resumed last week after seven stalled years.
“What we must do now is work together before the end of 2008 for the creation of an independent, democratic, viable Palestinian state,” Mr Sarkozy said in a speech to representatives from nearly 90 donor countries and international organisations.
Palestinian Prime Minister Salam Fayyad is asking for $5.6bn (€3.89bn) over three years. UN Secretary General Ban Ki-moon urged the international community to fulfil the Palestinian needs and more.
The EU launched the day of pledges of aid by promising $650m (€451.7m) in 2008.
In all, the EU and its member states gave about $1bn (€696,000) to the Palestinians in 2007. The figure includes not just aid to the Palestinian government, but also contributions to international agencies that assist the Palestinians.
Britain, France and Germany announced a combined $1.08bn (€750,000).
Mr Fayyad is trying to assure donor countries that they are not expected to prop up the Palestinian government indefinitely.
He has presented a three-year reform plan, with promises to cut government spending by trimming a bloated public payroll and reducing hundreds of millions of dollars in utility bills.
Still, he wants 70% of the aid initially to go toward reducing his huge budget deficit, with the emphasis shifting only gradually to development projects.
Economists say it is not enough for the donors to pledge aid and for the Palestinians to carry out reforms. The Palestinian economy will only recover, according to the World Bank, if Israel eases sweeping physical and administrative restrictions on movement in the West Bank and Gaza.
Israel has been reluctant to do so, putting security first. The Israeli military considers roadblocks key to preventing attacks on Israelis by Palestinian militants.
