The World Bank is putting together a package of economic, security and diplomatic measures in an effort to rescue the Palestinian Authority's economy from its current crisis, Nigel Roberts, director of the bank's office in the territories, said Tuesday.
But to make this possible, Roberts said in an interview with Haaretz, Israel will need to alter the disengagement plan by permitting Palestinians from Gaza to work in Israel even after 2008, as currently stipulated in the plan.
In addition, he said, Israel must remove roadblocks and change its closure and curfew policies in the West Bank to enable freedom of movement for Palestinian residents there.
The PA, for its part, must accelerate structural reforms to encourage commercial investment, while donor nations must increase their investments in the territories from $1 billion to $1.5 billion a year, he said.
Roberts said that if Israel substantially changes its closure policy, the PA's economy will be able to recover. However, he added, promoting growth will also require a great deal of money, and Palestinian reforms would encourage donations by making such an investment look promising.
He acknowledged that donor nations are concerned by reports that some $900 million in previous donations to the PA have disappeared, but stressed that there is as yet no proof of this having occurred.
The World Bank wants to use the bulk of any new donations to finance the PA's budget, he added.
Roberts said that former PA chairman Yasser Arafat's death created new opportunities in the region, and expressed hope it would prompt changes by both Israel and the PA. He said that Israel appears more committed to change than it was in the past, as evidenced by its willingness to discuss changes in its closure policy.
On the Palestinian side, positive signs include the preservation of stability and the decision to hold elections, he said.
Roberts said that there is no disagreement between the bank and Israel over the destructive nature of Israel's closure of the territories and the importance of removing it. The only question is how quickly it can be removed, since Israel deems the closure an important security measure.
One possibility, he said, is that Palestinian exports to Israel - which are vital to the PA's economy - could be renewed if sophisticated X-ray machines were installed at border crossings to detect any smuggled weapons.
He said the bank is willing to discuss Israel's request for international financing of such machines with the PA and donor nations.
Ultimately, Roberts said, the PA must move from an economy based on the export of labor to Israel to one based on the export of goods and services.
However, that transition is unlikely to be completed by 2008, which is why continued employment of Palestinians in Israel after that date is vital.
Currently, he said, some 40,000 Palestinians work in Israel, half of them illegally, and he expressed hope that once the separation fence is completed, thereby reducing the number of illegal workers, Israel will increase the number of legal workers.
Asked whether the PA bore some responsibility for its own economic decline for having launched the intifada, Roberts declined to answer, saying he prefered to focus on the future.
He also said it was illogical to expect Arab states to hire Palestinians in Israel's stead, because Palestinian workers have been barred from the Gulf states ever since the Palestinians backed former Iraqi leader Saddam Hussein's 1991 invasion of Kuwait.
