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Middle East
The price of Arafat
2003-09-24
The agenda of a little-noticed press briefing in Dubai last Saturday was, first, the impact of the al-Aqsa intifada on the Palestinian economy, and, second, financial reforms undertaken during that period. The impact was severe but less than expected and the reforms were outstanding for that part of the world: those were the conclusions of the International Monetary Fund (IMF), at whose annual conference the briefing took place.
I'd call the impact devastating, myself. I wonder what they expected?
An interesting but not particularly riveting story, one might conclude. However, the new fiscal openness revealed that, between 1995 and 2000, about £560 million of revenue was diverted from the budget to a special account controlled by Yasser Arafat, president of the Palestinian Authority. Karim Nashashibi, the IMF's resident representative in the West Bank and Gaza Strip, said most of the money had been invested in assets still owned by the authority, but did not rule out the possibility that the remaining funds could have been misused. Thus a press briefing called to praise the Palestinians for their economic resilience and commitment to reform inadvertently provided further confirmation of their leader's gross misrule.
They were supposed to be patting them on the head and telling the world, "See what a good job they're doing?" Instead, all those facts got in the way...
In 1997, a Palestinian internal audit revealed that £200 million out of a budget of £490 million had disappeared.
Shucks. That wasn't even half of it, quite...
Two years later, a report funded by the European Union, a major aid donor, pointed to egregious venality, overstaffing, incompetence and misuse of funds. One member of the Palestinian Legislative Council said he was worried that if anything happened to Mr Arafat they would not know where the money was, so tight was his control over it. In this, Mr Arafat was acting in typically autocratic fashion, using cash for political leverage, dispensing personal patronage and tolerating corruption to ensure future loyalty.
That's why he got along so well with Sammy...
Thanks largely to Salam Fayad, the Palestinian finance minister and Mr Nashashibi's predecessor in the IMF job, the authority has moved on. All revenues now come into the Single Treasury Fund; investments have been consolidated in the Palestinian Investment Fund. However, these changes, while welcome in themselves, underline the tragic anomaly of Mr Arafat's position. A man incapable of rising above the role of revolutionary and guiding his people to statehood remains their leader. He has completely forfeited the trust of the Israelis and Americans as an interlocutor. He is subjecting Palestinians to enormous economic and emotional strain. Progress, such as that achieved by Mr Fayad, has been made in spite of him. At bay in his headquarters in Ramallah, Mr Arafat is determined to keep the revolutionary cause alive. But in so doing he betrays his people.
Posted by:Fred Pruitt

#1  If the EUniks want to throw money down a hole, that is their perogative. However, I hope that the US is witholding funds now. One never knows. I don't understand it at all, better ring up Jimmah and he will enlighten me.
Posted by: Alaska Paul   2003-9-24 9:38:08 PM  

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