Fayyad. Building himself up as a political leader
Photo: AP

The Salam Fayyad show

Economic growth in PA result of foreign aid, not prime minister’s actions

Part 1 of article


Salam Fayyad has been stating time and again that he is working towards declaring independence across all “occupied territories” in August 2011. He says that although he is willing to engage in negotiations with Israel, he does not view this as a requirement for Palestine’s establishment. The Palestinians demand the application of international laws on self-determination, he says, adding that Israel is not the only player in this game.


Fayyad has also threatened to act unilaterally: “"We are not relinquishing negotiations as a method to establish a state, but in case this doesn't work we are preparing for a second possibility – to turn our dream into a reality."


Fayyad is not a military leader. He is building himself up as a political leader, yet there is no better way to judge his actions than to examine his deeds on the economic front, thereby exposing the immense gap between his words and intentions.


Had his intention indeed been to be the Palestinian Ben-Gurion, he would have been acting for the sake of economic independence and the building of an infrastructure for the state in process. Instead, Fayyad dedicated the huge funds he’s been receiving from the world to paying salaries, in a bid to boost his support. He remembers well that the party he established years ago won less than 2% of the vote in the elections. Just like any politician, this is what truly interests him: building a support base.


Recently, he started rewarding not only the 150,000 employees of the Palestinian Authority and its security arms. Fayyad established a fund (seemingly for development purposes) that hands over funds directly from donor states to salaries in more than 500 city halls and local councils established in the PA. In the past 16 years, these grew fivefold.


Reports replete with excuses

The Palestinian prime minister boasts of being an economic reformer, yet in practice the growth we have seen under his leadership originates in greater international aid, which has been growing as result of a promise he has not delivered on: Minimizing Palestinian government bureaucracy.


Moreover, he has enjoyed an unusual contribution – the shopping sprees undertaken by Israeli Arabs, with government approval, in Palestinian towns. These purchases boosted the Palestinian economy in Judea and Samaria by more than 10%, thereby boosting the total value-added tax pouring into the PA’s coffers by hundreds of millions of shekels.


Not only has the Israeli government refrained from demanding repayment of these VAT sums, estimated at about NIS 1 billion (roughly $280 million) a year and belonging to Israel by law and in line with agreements with the PA – according to a document recently distributed by our Foreign Ministry, Israel has granted an exemption from issuing invoices to PA merchants. And so, we are granting the Palestinian Authority (completely voluntarily and in contradiction to the law – according to the Foreign Ministry Document) a gift totaling additional hundreds of millions of shekels a year.


Fayyad wants us to give him more territory, seemingly one needed for “independence.” He also wants us to continue serving as his excuse for not investing the funds at his disposal in development – each report he submits to the World Bank is replete with excuses as to why the development funds had not been fully used. Would you like to guess who he blames?


Part 2 of article to appear Sunday night


פרסום ראשון: 04.25.10, 18:17
 new comment
This will delete your current comment