Salam Fayyad, Prime Minister of the Palestinian National Authority
National Press Club, Washington D.C.
Address to the American Task Force on Palestine
February 11, 2008

Introduction

Your Excellencies,
Ladies and gentlemen,
Good afternoon.

By now, the basic parameters for resolving the conflict that has afflicted Palestinians and Israelis are well known to include the establishment of an independent Palestinian state living side by side with Israel in peace and security.

However, it is no longer enough to speak of wanting a state of our own. The nature and character of that state are just as important. As Prime Minister, I have turned my attention to these elements of statehood. It is important to lay the foundations for the kind of state we want, and to pursue our vision of a Palestinian state despite the occupation.

Reflecting the substance and spirit of President Mahmoud Abbas’s program, my government has set out a platform that outlines the vision for our future state and how we intend to achieve it. Our view is that the establishment of a Palestinian state requires progress – parallel progress – on multiple tracks: governance, security and economics, in addition to the political track. This requires a serious and sustained commitment on the part of all parties – not just Palestinians and Israelis, but the United States, the Quartet, the Arab states and the broader international community.

The role of the United States is particularly instrumental – with the convening of the Annapolis conference, with US commitment to oversee implementation of the Road Map, and with efforts, as President Bush said, to “end the occupation that began in 1967”.

For our part, we are working towards this goal with utmost seriousness.

Good governance

It is with this same seriousness that I am proud to say that my government’s platform is amongst the most progressive in the region. The state we seek is one that must be open and democratic, based on the rule of law, respect for human rights, equality, cultural sensitivity and religious tolerance. We intend to build strong institutions that can meet the needs of our people today and exceed the expectations of tomorrow. In short, we shall build a state that all Palestinians can be proud of – and my government will lead by example.

We led, and continue to lead, by putting public finances back in order. Between 2002 and 2005, significant reforms to the public finance system were carried out, including creating a single treasury account for PNA revenues and expenditures. While these reforms came undone in 2006, we have managed within the few months since my government took office to fully repair the damage, to upgrade our public finance system, and, in my humble opinion, to comply with the highest international standards of integrity, transparency and accountability. Indeed, in one month’s time, anyone will be able to log on to our Ministry of Finance’s web site to view detailed monthly reports showing exactly where our revenues are coming from and how they are spent.

Through efforts like these, trust is gradually being re-established: Congress has already appropriated US $218 million of the US $555 million pledged by the United States in December, and we expect that a substantial portion of that will shortly be deposited directly into the single treasury account. This is a major vote of confidence, and one that is likely to encourage other donors to follow suit.

We have also taken measures – despite the political risks entailed – to reform the civil service. We reduced public sector employment by about 40,000 positions through the cancellation of illegal contracts and the contracts of those who failed to meet terms of employment. At the same time, we expanded the scope of the social safety net to include tens of thousands of new beneficiaries. We also adopted a national plan to reduce electricity subsidies. Make no mistake, as many of you know, civil service reform and the reduction of subsidies are politically sensitive. But it would have been a mistake not to take these difficult measures. Good governance demands nothing less. The difficult decisions of today are the foundation for tomorrow’s progress – progress in good governance, a stronger economy, and a unified society.

We have regularly paid salaries to all PNA employees for 8 consecutive months after 16 months of irregular and partial payments. We have also repaid a portion of the arrears owed to civil servants and private sector suppliers. In addition, we have paid the outstanding financial obligations to local government institutions. And we have supported communities negatively impacted by the construction of the Wall. We have also begun work on over 250 small community development projects.

We have also adopted modern legislation in the fields of procurement, income tax, and pensions and have passed important legislation to combat money laundering.

In a similar vain of ensuring transparency, accountability and adherence to the rule of law, we have carried out major reforms concerning charities. Good governance means that society’s most needy must not be politically exploited. We have also taken concrete steps to end the exploitation of, and incitement in, places of worship.

These are just some of the signs of progress that are helping to restore faith in the PNA.

Security

Another area that demands concrete steps is that of security. I firmly believe that security is at least as much a Palestinian need as it is an Israeli need. Palestinians, like all peoples, want a predictable and secure place to live. We want to be able to work and send our children to school without worrying about crime and violence. That is why I am pleased to be able to say with confidence that we are making tangible progress on the security front. We are doing this not as a favor to Israel, and not because the Americans or the Europeans have asked us to do so. Rather, we are taking charge of security because it is in the Palestinian national interest and because this is what our people want. We must not allow destructive actions of the few to compound the hardship, suffering and insecurity Palestinians already face as a result of the occupation.

Upon assuming office, and in the face of extreme adversity, my government immediately began enforcing a ban on armed militias in the West Bank. We also immediately began to address the issue of Palestinian fugitives by securing an Israeli commitment not to target or arrest them.

We have also undertaken a concerted campaign to enforce law and order by deploying forces in major urban areas. We tackled one of the most challenging cities first: Nablus. Despite a great deal of advice to the contrary, I felt it was important to deploy in the difficult areas first as a show of the determination of the Palestinian National Authority to clean up our streets. We have since expanded the scope of deployment to cover other cities, and wherever we have deployed police, people have felt a qualitative improvement in the security situation.

In conjunction, we have commenced the reconstruction of our security headquarters as a means of demonstrating to our people that the PNA is reconstituting itself and that it is reasserting its authority.

This is in no small part thanks to the assistance of the United States, as well as of our European and Arab partners. With the help and advice of US Security Coordinator Lieutenant General Keith Dayton, we have begun professionalizing, reforming and equipping our security services. Of course, much remains to be done.

The question in my mind, however, is not whether we can succeed – we are demonstrating our success day after day – but whether we will be allowed to succeed. Limitations imposed by Israel on where and how our forces can or cannot act limit our ability to bring security to our people and to fulfill our security commitments under the Road Map. The Cinderella story of Nablus effectively ends after midnight, and sometimes even in daylight, when Israeli forces conduct raids and arrests. Forget the glass slipper for a moment, Palestinian security forces are not permitted to wear body armour donated to us by the British because the armour could stop Israeli bullets. Furthermore, recurrent Israeli military incursions severely erode our credibility with our people and undermine efforts to enforce law and order.

I firmly believe that we have demonstrated our ability to do the job, if given the chance. Where we are afforded the opportunity, we are tenacious in using it, and where we are not, we are determined to do everything we can to create it so that we can bring security and deliver law and order to the people and land of Palestine.

Economy

What must not be forgotten is that the focus on security alone will not by itself bring about security. Delivering on security will be far easier if we can deliver, in tandem, significant socio-economic improvements to the lives of ordinary citizens. This is an important priority, as currently, about 50 percent of Palestinian households in the West Bank and 80 percent in Gaza live in poverty. In addition, 34 percent of Palestinians face "food insecurity" (which is defined as households with income and consumption of $1.60 per day).

Our situation would be even more dire were it not for the generosity of the international donor community. Over $7 billion in assistance was pledged to the PNA over the next three years. While we very much appreciate this assistance, our goal is to achieve self-sustainability. Indeed, the Palestinian Reform and Development Plan is underpinned by a multi-year budget framework the aim of which is to attain fiscal sustainability and a progressively greater degree of self-reliance through the implementation of very strong adjustment measures on the expenditure side. Notwithstanding the socio-political risks involved, we have embarked on this adjustment path out of a deep sense of self-responsibility and our strong belief that no amount of donor assistance will sustain the economy, especially if the money merely goes to meet salaries and recurrent expenditures. We are not looking for a budget to sustain an occupation. We are asking for investment in peace – peace for Palestine.

As part of the investment in peace, we are looking ahead towards economic recovery. We are pursuing parallel tracks of quick impact initiatives to jumpstart the economy and to lay the foundations of sustainable economic development. Quartet Representative Tony Blair and his team are working with us on the prioritization of some important projects for quick implementation. They are designed to create jobs and build export-oriented businesses.

On a parallel track, we have proposed in the Palestinian Reform and Development Plan strategic public investments and the rehabilitation of infrastructure. These projects are aimed at bringing the agriculture and manufacturing sectors back to their full potential. Tourism and housing will also get our full support as they are labour intensive and show great potential for job creation and expansion.

Our vision of the Palestinian economy is of a diversified and thriving free market, led by a dynamic private sector in harmony with the global economy. For this reason, we are making great efforts to encourage Palestinian and international businesses to invest in the future of Palestine. In May of this year, for example, we will hold an international conference in Bethlehem to encourage private sector investment. We hope to follow it up with similar events in other cities around the world.

Trade, competitiveness and innovation are the driving forces of this vision. But this very vision becomes vulnerable to any disruption in trade, in supply chains and in access to markets – disruptions caused by over 500 checkpoints and roadblocks in the West Bank; a Wall which cuts off communities from their farm land; Israeli settlements that limit when and where Palestinian goods and people can move; and a siege imposed on Gaza.

The Quartet, the donor community and international financial institutions all agree on what is needed for economic recovery and sustainable economic growth: the removal of restrictions on the movement of people and goods. Regrettably, in the eight months since my government took office, little to no action has been taken by Israel on this front. In fact, the number of checkpoints and roadblocks erected by Israel in the West Bank increased from 528 to 561 in 2007.

The devastating impact of the Israeli closure regime is especially clear in the case of Gaza, where only limited humanitarian supplies have been allowed to enter since last June. Even the entry of those supplies was sharply curtailed over the past few weeks. The Gaza economy cannot grow without trade, and its population cannot survive solely on the provision of limited humanitarian assistance. Just as sanctions have rarely yielded the intended consequences in other parts of the world, it is my firm view that the blockade against Gaza will never yield anything but more misery for our people there. For this reason, and in the face of great risk, the PNA has indicated its willingness to manage the crossings in and out of Gaza if Israel agrees to lift its blockade. The blockade must be lifted, and I am encouraged by the international community’s support of our call for lifting it, for Gaza is and always will be an integral part of our homeland and of our future state.

Let me be clear that we are totally against the firing of rockets against Israeli towns from Gaza. And just as I reject the firing of rockets and all forms of violence from Gaza, so too do I reject the disproportionality of Israel’s military actions and the collective punishment it has imposed on our people in Gaza.

Politics

All the topics I’ve discussed so far – good governance, security, a healthy economy – while necessary for statehood, are insufficient for a viable state. In fact, we will never be able to fully enjoy good governance, security or a healthy economy without one key, missing ingredient: freedom. Freedom to live our lives; freedom to govern ourselves as an independent people; freedom to build a society without the interference of outside forces; freedom for our prisoners languishing in Israeli jails. None of the efforts that we have made to improve the governance, security or economy of Palestinians will be sustainable if we are not free of the occupation we have painfully endured for 40 years. This means a sovereign and independent state of Palestine with East Jerusalem as its capital living side by side in peace and security with Israel. You must expect nothing less from peoples of the Holy Land. Nor will I.

This requires us to sit with Israelis -- in good faith -- to conclude the terms of an agreement that will resolve these and all other aspects of the conflict between us. Until that time, what is most desperately required is a cessation of all settlement activity in order to preserve the very possibility of a negotiated two-state solution and to revive public confidence in the process.

Annapolis was a major step forward, but I cannot say we are not facing difficulties. In the two months following Annapolis, Israeli incursions and bombings on Palestinians and their property claimed the lives of 165 Palestinians, injured another 521, and caused untold damage to property. Meanwhile, Israel intensified settlement activity, particularly in and around East Jerusalem. As we attempt to negotiate, Israel published tenders for hundreds of housing units in East Jerusalem settlements, and continued construction on thousands of housing units. This handicaps the Palestinian negotiators, not to mention the Wall and the closure regime which continue to suffocate the Palestinian economy. In this connection, we welcome the recent appointment of General William Frazier and hope that he will head a robust trilateral mechanism as agreed between the parties to oversee implementation of the Road Map, so that we can focus on the business of negotiations.

Of course, it is incumbent upon me to remind everyone that, in addition to the external challenges, we face internal challenges to the implementation of our vision. It was Abraham Lincoln, who said in 1858, “that a house divided against itself cannot stand.” However, I do believe that the political fragmentation we currently face is at least partly a result of the failure to deliver freedom and peace to our people. If the Palestinian people are offered a vision of peace based on freedom, justice and dignity for us and our Israeli neighbours, I am confident that my people will unite behind that vision.

Conclusion

The ultimate goals of the Palestinian people, today, are the same as they were back in 1988 when the PLO, under the leadership of our late President, Yasser Arafat, endorsed the two-state solution as the means to realize our national and individual aspirations: a sovereign, free and viable Palestinian state with East Jerusalem as its capital, and a just and agreed upon solution to the issue of refugees on the basis of UN General Assembly Resolution 194.

The values to which the Palestinian people aspire today are the same as the values we have sought for ourselves in our endeavor to end the occupation: dignity, respect, justice and, above all, freedom. Our government is unwavering in its commitment to these values. I think our achievements of the past eight months speak to this. We will continue to be tenacious in our pursuit of good governance, law and order, security and economic recovery. And, as we do so, we will be making progress toward conquering the sense of defeatism and confronting the destructive rejectionism that have afflicted us for much too long. That is a worthy cause, for I do believe that to win our struggle for freedom, defeatism must be defeated and rejectionism has to be faced down.

In this larger battle, we need the international community to partner with us in making the difficult decisions of today for a prosperous and peaceful tomorrow. We ask you to partner with us now, to invest in peace for Palestine.