Had Palestinian Prime Minister Salam Fayyad possessed real plans for independence, he would already be starting to prepare an infrastructure for independent Palestinian currency. A state that wants to develop a private sector and the ability to reward exports cannot do it by a clinging to the shekel – the currency of a modern and highly developed economy like Israel’s.
As an economist who worked for the International Monetary Fund, Fayyad knows well that the ability to carry out currency depreciation is the most important capacity demanded by the IMF from any independent state, yet this is apparently unfit for “Palestine.”
This is clear proof that he does not intend to promote real independence. He wants to continue relying on us and remain in an undefined state of half-occupation and half “independence” until demography plays its part. What Hamas is trying to do militarily, and what Arafat attempted to do diplomatically, Fayyad seeks to do economically.
The Paris Accord, which is the economic cornerstone that serves as the basis of the Palestinian Authority’s very existence, allows each side to request new discussion on the deal’s details. The agreement was signed 16 years ago, yet despite all the political and economic changes that took place since then, Israel continues to adhere to it while making voluntary additions, hoping that these “bribes” will mitigate international pressures.
How should Israel respond?
However, Israel must make three demands of the PA that will expose the latter’s lack of economic independence and its dependence on Israel:
1. The Palestinians should immediately embark on steps towards issuing an independent Palestinian currency and make sure to stabilize it. The usage of the Israeli shekel in Palestinian territories will be annulled in August 2011 – the date Fayyad set for “independence.”
2. The PA should compensate Israel for the damages caused by the former’s actions (damaging the fence) and by Palestinian criminal activity (car theft, medicine theft, and agricultural theft.)
3. The Palestinian Customs Authority should collect on its own, and without Israel’s help, the added-value tax and other taxes currently collected on its behalf by the Israeli government. No longer will we see the monthly transfer of VAT funds. You want independence? It’s all yours. Once Fayyad’s customs officials engage in collecting taxes, they will have no more time for the new job he found for them: Destroying Israeli goods imported into the PA.
Instead, Israel should allow his trained army to pass through en route to Rafah in Egypt; from there, he would be able to enter the Gaza Strip like another eminent Palestinian leader did 16 years ago. Do you think Hamas would allow it? That’s the real test of independence.
Avi Trengo is a journalist