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BICOM

Britain Israel Communications and Research Centre

Analysis

BICOM Analysis: Assessing Palestinian progress

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Key points

  • Several international reports in recent weeks have underscored the progress made by the Palestinian Authority in building capacity for self rule. Despite the progress, significant challenges still remain.
  • While PA President Mahmoud Abbas and PM Salam Fayyad have played pivotal roles in leading institutional reform and capacity building, ground-level cooperation and coordination with Israel have proven to be as important in ensuring that these developments are sustainable.
  • Advancements in economic growth, institution building and law enforcement are increasingly linked to the Palestinian diplomatic effort to gain international recognition of sovereignty and avoid negotiations with Israel over a final-status agreement to the conflict.
  • Despite the overall picture of improvement, various reports suggest that Palestinian progress will depend on coordination with Israel. This further highlights the need to renew direct bilateral negotiations that will use the positive momentum to advance an agreed final-status solution.

Introduction

In the past week, reports prepared by the UN, the International Monetary Fund (IMF) and the World Bank have provided a positive assessment of the Palestinian Authority’s capacity-building policies. The reports were submitted to the UN Ad Hoc Liaison Committee (AHLC), a 12-member body that serves as the principal policy-level coordination mechanism for development assistance to the Palestinians. A statement following the committee’s meeting in Brussels on Wednesday (13/4) cited the reports as saying that the Palestinian Authority is “above the threshold for a functioning state in the key sectors they studied.”

The PA is making significant progress on the ground, but also continues to reject Israel’s calls to resume direct negotiations. In light of the information made public in recent days, what are the main areas of progress and what are the obstacles still to be addressed? More importantly, can such ground-level achievements be sustained without reviving a substantive, bilateral diplomatic process?

Assessing Palestinian progress

The data collected in the different reports provides a detailed assessment of the PA’s progress in institution building, economic reform and development, law enforcement and security. The reports also analyse the involvement of international donors as well as Israeli measures, which have supported economic activity and expansion of Palestinian governing responsibilities in the West Bank. It is possible to note progress in three major spheres:

Economic growth has been at the forefront of Fayyad’s 2009 two-year state building plan, and results were already visible in the 2010 fiscal year. Real economic growth in the West Bank and Gaza Strip is estimated to have reached 9.3% of GDP, exceeding the PA’s budget projection of 8%. A 15% increase in total revenue, as well as domestic economic reforms, have also enabled the PA to reduce its dependency on foreign aid by 35% from 2008 levels. Poverty levels have also been gradually decreasing, primarily in the West Bank, which has seen a 7% drop in poverty since 2004.

Despite these positive trends, Palestinian economic growth is still dependent on services, agriculture and construction and lacks a solid manufacturing base. Importantly, foreign aid remains a vital component in ensuring economic growth. The World Bank also notes that the fast growth rate is a “bounce back” from a very low base, and is unlikely to remain as high in the future. High unemployment rates, which currently stand at over 23%, and low participation in the labour force are particularly worrying and could lead to growing unrest and political instability.

Improvements in law enforcement have also been highlighted as an important pillar of Palestinian capacity building. The Office of the Quartet Representative notes that improvements in the judicial system have been “dramatic.” Improved law enforcement increased new criminal cases, encouraged submission of civil disputes to the judiciary and boosted public confidence in the courts. As a result of various reforms, the judicial system has managed to improve caseload management and reduce backlog. Strong legal and institutional frameworks are also cited as cornerstones for successful anti-corruption efforts, and the PA is working to strengthen the legal framework for combating corruption.

Improved security in the West Bank is proving pivotal for Palestinian governance and economic growth.  Four battalions of the Palestinian National Security Force (NSF) have been deployed in the West Bank and a fifth is currently in training in Jordan. Five further battalions will complete a force numbering around 8,000 men, which is scheduled to be recruited, trained and deployed to the West Bank by the end of 2011. The operation of these forces successfully provided the PA with a monopoly on the use of force in Area A, which is under full Palestinian security and administrative control. Increasingly, the NSF is expanding its activity to additional areas outside the major West Bank urban areas that have been under Israeli security control.

However, the escalation in violence along the Gaza-Israel border in recent months has emphasised the sharp discrepancies between the achievements of the PA in the West Bank and the Hamas-controlled Gaza Strip. Defence and security aspects are only one manifestation of this contrast between the two entities. The repeated flare-up of violence hinders economic development and Gaza clearly lags behind the West Bank in all economic parameters. Furthermore, Hamas is also undermining what remains of the PA governance mechanisms in Gaza by replacing the formal judicial system and appointing new judges, prosecutors, police officers and bureaucratic staff. Civil society groups have also encountered harsh restrictions on their activities and civil liberties have been significantly limited.

Indeed, all the reports refer to the split between Fatah and Hamas as a major challenge to the Palestinian state-building process. As the report by UN Special Coordinator Robert Serry noted, “modest recovery efforts amidst a fragile and oft-breached calm, a continuing closure regime, and a persistent Palestinian divide fall short of what is required to lay the economic and institutional basis for statehood.”

Israeli cooperation: a silent partner

The reports by international agencies submitted to the AHLC continue to express concern about Israel’s policies and existing limitations on Palestinian economy and governance. Nonetheless, Israel is playing a role in supporting Palestinian development, particularly facilitating the expansion of Palestinian security responsibility and removing hurdles for economic growth.

The improved performance of the Palestinian security forces in the past two years and the overall decline of terror activity in the West Bank has been accompanied by significant improvements in Palestinian movement and access. The removal of all but 16 checkpoints, the opening of new roads throughout the West Bank and the easing of regulations have resulted in improvements in movement between major Palestinian population centres, and access to land and services for the populations of smaller communities. Over half a million permits were issued in 2010 for Palestinians wishing to travel between Israel and the West Bank. From 2010, Israeli Arabs have been free to enter the West Bank for trade and shopping.

Intensive coordination is also taking place between Israeli and Palestinian security forces. A rise of 118% was recorded in Israeli-Palestinian coordination meetings, and Palestinian security activity is now taking place 24 hours a day. Israel has also agreed to facilitate the extension of PA security presence to seven additional towns in the West Bank.

The daily cooperation and coordination between Israeli and Palestinian officials on these and other matters is rarely discussed. Fearing political repercussions, the Palestinian leadership’s strategy has sought to highlight unilateral policies and a core message of self-reliance. While there may be a political logic to this, the international community is aware that Israel’s interests cannot be separated from efforts to build Palestinian governing capacities and state institutions. Moreover, as several reports noted, the importance of positive ground-level coordination and cooperation must be complemented by renewed diplomatic negotiations.

The necessary next step: bilateral diplomacy

The AHLC meeting is the last expected gathering of the committee before the September 2011 target date for completion of institutional readiness for statehood set by the Palestinian Authority and supported by the Quartet – comprising the UN, EU, Russia and the US. While the PA is clearly “on track”, Serry also warned that “the institutional achievements of the State-building agenda are approaching their limits within the political and physical space currently available, precisely at the time when it is approaching its target date for completion.”

Leading diplomats who attended the meeting said it was time for the political track to catch up with the effort to build viable Palestinian institutions and ruling capacities. The Palestinian refusal to return to negotiations is based on the assumption that its notable achievements thus far will be sufficient to garner international support for a Palestinian state, either through recognition of individual countries or in a resolution of the UN General Assembly in September. Either way, international recognition will not change the practical realities on the ground, and the PA’s ability to sustain it achievements may not be possible in the long run.

Establishing full sovereignty of territory and control of borders are prerequisites for an independent state. These are also conditions for sustained economic growth and functioning governing mechanisms. One option for expanding the scope of Palestinian growth may come from Prime Minister Benjamin Netanyahu’s possible new plan for a further redeployment in the West Bank. This is not a substitute for a final-status resolution. Achieving the goal of an independent Palestinian state will necessitate territorial concessions and security arrangements that cannot be realised without an intense bilateral effort. The Palestinian Authority may be ready to govern a state of its own, as the UN report suggests, but negotiations are likely to be the only way of making this state a reality.

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