Palestinians have not yet been able to build “the foundations of a sustainable economy,” Mohammad Mustafa, chairman and CEO of The Palestine Investment Fund, told an audience at the “Twenty Years after Madrid” conference at the United States Institute of Peace on Nov 2.
November 8, 2011
Palestinians have not yet been able to build “the foundations of a sustainable economy,” Mohammad Mustafa, chairman and CEO of The Palestine Investment Fund, told an audience at the “Twenty Years after Madrid” conference at the United States Institute of Peace on Nov 2.
Mustafa delivered his assessment at a panel on the “Economy of Peace” that included Israeli and American specialists on regional economic cooperation.
Mustafa argued that the central problem for the Palestinian economy stems from politics—the overwhelming Israeli role in Palestinian economic matters that will continue until the Israeli-Palestinian relationship is redefined in a future political settlement. “The Palestinian Authority has not been able to control its resources,” he said. He cited the example that the PA needs Israeli permission to develop some $6 billion to $8 billion in natural gas reserves off the coast of Gaza. He also noted that trade with Israel accounts for 85 percent of the Palestinian total.
The overall Palestinian unemployment rate is about 25 percent, with some 35 percent out of work in Gaza. Mustafa said that Palestinians will need the private--not the public--sector to create the many jobs that are needed.
Political priorities limit economic opportunities in other ways too, noted Daniel Lubetzky, founder and chairman of PeaceWorks, which pursues commercial joint ventures among neighbors in conflict zones. “The Palestinians face enormous pressures against working with Israeli counterparts,” Lubetzky said. “They don’t want to have economics supplant a political solution.”
Nimrod Novik, chairman of the Israeli nongovernmental group Economic Cooperation Foundation and a former Israeli peace negotiator, said that an earlier Israeli approach—which he described as “let’s build the Palestinian economy first and then we can go further”—has not worked.
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