PA Reforms Will Be Unable to Move Forward Due to Closures, Diplomats Say

The account number of the Palestinian treasury in the Arab Bank in Gaza is 100084. And now that number is the only bank account of the Palestinian Authority, promise Palestinian ministers and diplomats supervising the implementation of Palestinian reforms. From now on, all Palestinian Authority income will be deposited only into this account and all Palestinian Authority expenditures will come out of it, and only with the authorization, supervision and signature of the new finance minister, Salem Fayad.

Two weeks ago, the PA began to deposit income from the sale of fuel into this bank account - NIS 4 million a month, a relatively paltry sum because the Israel Defense Forces has limited the movement of Palestinian vehicles to a minimum.

Before the consolidation of bank accounts, Fayad reviewed all the Palestinian Authority's accounts in the various banks and warned the bank managers not to allow their use without his knowledge and permission. Last Thursday, Arafat authorized the establishment of the "Palestinian Investment Fund" to be managed by Fayad. This will gradually bring about the abolition of the PA's commercial activity in its own businesses, at the root of the bribery and quid pro quo system among PA leadership and its faithful.

In July, the countries contributing to the Palestinian Authority, along with the World Bank and the International Monetary Fund, established a mechanism to support the reform process, the Task Force on Reform. Its representatives sit on seven Palestinian committees to carry out the various reforms. In coordination with the Palestinians, they added concrete and technical steps to implement the Palestinian reform plans. Their job is to survey progress and see which obstacles stand in the way of implementing certain items.

Today, the members of the seven committees are to meet in Ramallah to review the progress in implementing the plan. On Thursday, their representatives will meet in Paris with representatives of the foreign ministries of the donor countries.

Of all the areas in which the PA needs to carry out comprehensive reforms, the easiest is the financial area, says a diplomat on the task force, because the transfer of money and information is not affected by the severe restrictions on movement imposed by Israel on the Palestinians. In other areas - security, legal and institutional - the reforms remain on paper, with implementation difficult because of the lack of freedom of movement.

There is a direct connection between Israeli policy and the feasibility of implementing civil and security reforms inside the PA, say Western diplomats. Similar statements have already been sent to various Israeli agencies - the Foreign and Finance ministries and the office of the liaison of activities in the territories. Without freedom of movement or economic activity to produce income, all the enlightened laws and investigations will be worthless.

In all PA government ministries and security branches, it is necessary to lay off unnecessary employees appointed for reasons of party or personal loyalty. To do so, the establishment of the Government Pension Fund must be completed. With a large proportion of the PA's income held up in Israel (accruing interest) over the past two years, and with all economic activity frozen because of the closure, the fund cannot be set up, making it impossible to move ahead with the institutional and security reforms.

There are enough people in the Palestinian Authority interested in hindering the reforms, to continue to keep the roles of the legislative council to a minimum (as it has been since 1996), to keep the judicial system weak, so that decisions will be made by various tribal traditions, the strength of large families, security officials or those close to the government rather than by the rule of law.

A Palestinian minister says that the Israeli policy of closure in fact exacerbates these well-known tendencies in the PA. The 87 members of the legislative council have been unable to convene in Gaza and Ramallah to vote confidence in the new cabinet. The task force asked Israel to grant the members of the council free passage for three months so that they may convene, vote on the new government and pass the laws needed to implement the reform. The legislative council must meet to discuss the reform program and comment on it. The Palestinian cabinet proposal lacks, for example, the clear demand that was in the program drawn up by the council in mid-May: to abolish the Supreme Court for State Security, a court that bypasses the legal system. The task force has already demanded the abolition of this illegal court, but to do so the council must convene.

The election committee headed by Dr. Saeb Erekat, has prepared a detailed daily program up to January 15, the date of the general elections, as well as a detailed budget. But, says a European team of experts on elections, it is difficult to talk about elections - the cornerstone of the democratization and reform program the world demands of the Palestinian Authority - with the IDF controlling Palestinian cities and preventing movement.