None of the parties involved (whether through acts of commission or omission) in Hamas' takeover of the territories and the reign of chaos there will derive much satisfaction from the departing confession of Nigel Roberts, the World Bank's man in the West Bank and Gaza Strip. No one emerges blameless - not the Palestinian Authority, not the government of Israel, not the United States, not the donor countries. This senior official, born in Britain, with a master's degree from Oxford University, also makes no excuses for himself. Indeed, several days ago, Roberts wrote in a World Bank publication that he does not believe that someone who has worked so long in the peace process can leave here with a sense of achievement, adding, "I also missed opportunities, and made errors of judgment."

In an interview with Haaretz, Roberts suggests that everyone should look in the mirror and ask himself: Have I done everything I can for peace? Have I taken the necessary risks? He volunteers the answer: "The appearance reflected in the mirror is quite depressing. I'm frustrated by the lack of progress and lack of courage on all sides, including myself."

The five years he has spent in the World Bank's offices in the A-Ram neighborhood, on the northern border of Jerusalem, have been the worst years for the Palestinians and their Israeli neighbors since the occupation. Roberts warns that if all of the parties involved do not act more courageously, the worst of all may be yet to come. He says he is returning to the World Bank's headquarters in Washington, D.C. with major concerns. He fears that the PA, the largest employer in the territories, is facing a fiscal crisis which could result, in any given month, in it being unable to pay the salaries of its 130,000-plus officials and security staff.

To put it simply: The PA is on the verge of functional bankruptcy. The failure to make the salary payment in full and on time will affect hundreds of thousands of people who feed at its table, and the tens of thousands of suppliers and merchants who earn their living from its employees. They will join the masses of unemployed. According to the World Bank, the unemployment rate in the territories exceeds 20 percent, with a rate of about 30 percent in the Gaza Strip, over 40 percent in the southern part of Gaza and among young people (ages 16-25) in southern Gaza, the favorite source of cannon fodder for Islamic Jihad, unemployment reaches the alarming rate of 70 percent. The bankruptcy of the PA following the elections, Roberts warns, could generate a shock of unimaginable dimensions.

He aims his first arrow at the PA, headed by Mahmoud Abbas (Abu Mazen). "The Palestinian government needs the continued assistance of the international community," Roberts declares, "and to secure that, it must begin to assume its responsibilities." Raising salaries at a time when resources are unavailable for this, he notes, is precisely the opposite of demonstrating responsibility and reliability. The direct consequence of this move was a decision by the Bank, supported by the European Commission, to freeze $60 million for funding the PA's operating budget. According to Roberts, this far-reaching step was taken because the Palestinians did not fulfill their commitments on budget control. Were the donors not to hold the PA responsible, they would lose the confidence of their taxpayers that enough control can be exercised to prevent the money from being used to finance acts of terror.

Insufficient strength

Roberts notes that the amount of assistance the Palestinians are getting - $5 billion in five years, or $300 per capita annually - is the highest granted to any entity since World War II. "To maintain the deep involvement of the donors, and their diplomatic attention, as well as the desire of the private sector to invest additional money, the PA must improve its performance," Roberts states. Unfortunately, he continues, Yasser Arafat's departure has not brought about a dramatic change for the better - in fact this last year has witnessed serious deterioration in internal law and order and budget management.

"At the beginning of 2005, when Abu Mazen was elected president, we hoped for new momentum in the direction of governmental reforms and the fight against corruption, and in legislation - the most essential steps for encouraging private investments," explains the senior representative of the World Bank. Arafat died, but everything pertaining to the corrupted system of government, the "Arafatism," is still alive and kicking, Roberts says. "Arafat created a system that was tailored to a liberation movement, but not for a state at a time of reconciliation. We did not think that becoming accustomed to new norms would take so much time."

Time, in his view, is not working to the advantage of the Palestinians: "We are now very close to a situation in which the international community will decide that the PA is not meeting expectations - and the implications of this are clear." Roberts makes a point of noting that there are certain people in the Palestinian cabinet who are trying to change this reality, but they lack sufficient strength due to the fragmentation of the regime, the internal political pressures (mainly the rise of Hamas) and external pressures from Israel's closure policies - the pressure of the Israeli occupation, in particular the restrictions on the movement of people and goods.

The second arrow is aimed at Israel. On paper, Israel understands the strong link between economy and security - or, if one prefers, between unemployment and terrorism. Even the director of the diplomatic-security branch in the Defense Ministry, Major General (res.) Amos Gilad, said two weeks ago during a meeting with foreign ambassadors that the economic rehabilitation of the territories is also an Israeli interest. One can view this as a significant change from the policy of "constructive destruction" that was accepted by the defense and political establishment during the initial years of the intifada. Gilad and his boss, Defense Minister Shaul Mofaz, and the previous chief of staff, Moshe Ya'alon, believed that crushing the economy would lead the poor and unemployed to pressure the various organizations to lay down their arms. But reality proved them wrong: Income dropped and with it support for the PA and the popularity of Abu Mazen, and terror intensified, together with support for violence and the popularity of Hamas.

Painful price

Roberts noticed the change in Israel's attitude for the first time during the previous meeting of the donor countries, which was held in Oslo a year ago. There is a great distance between a realization on the intellectual level and a change in the situation on the ground. Roberts emphasizes that the closures cause an annual decline in Palestinian GDP of 5 percent. Thus, the easy solution in the short term is costly in the long term. Roberts was a witness to the endless vicious cycle of more security for Israel - more checkpoints and closures - more damage to the primary engine of the Palestinian economy - more unemployed - more internal chaos - more terrorism - less security for Israel. Reparation of the damages of this narrow security perspective will extract a very expensive and painful price, he notes.

He adds that his previous boss, James Wolfensohn, who was the president of the World Bank and was appointed as a special envoy by the Quartet, is frustrated by the shortsightedness of some of Israel's security personnel, who prefer to look at things a day at a time rather than looking further ahead.

The third arrow is aimed, albeit very cautiously, toward the Quartet, primarily at the leader of the international foursome: the United States. Roberts says that despite the fact that the road map has not advanced, the Quartet's pressure on the Palestinian side in regard to the reforms stipulated in the plan is much greater than its pressure on Israel with respect to the issue of closures.

Roberts was involved in all stages of the negotiations on the Karni and Erez border crossings and on the agreement to operate convoys between the Gaza Strip and the West Bank. He is pleased by the injection of a trilateral dimension into a process that was designed to be unilateral, and is also pleased by the opening of the crossings. But he does not conceal his disappointment over the violation of the section about the convoys in the agreement struck by U.S. Secretary of State Condoleezza Rice.

When asked his opinion about restraint of the great superpower, he replies with a sheepish grin: "I remind you that David Welch [Rice's deputy] said at the donors' meeting held last month in London that the United States expects the agreement to be carried out in full."

Says Roberts in summary: "With all due respect to the world of economics, which enables one to advance to talking about charged subjects like occupation and security, the key to the solution lies in the political world. Its mission is to ensure that a viable Palestinian state is formed."