He Ru Follow us: Make a7 your Homepage
      Free Daily Israel Report

      Blogs

      Op-Ed: Will the Real Fayyad Please Rise

      Published: Tuesday, April 27, 2010 8:05 AM
      The image PA Finance Minister Salam Fayyad portrays to the world is a facade, says this author.


      While Salam Fayyad – prime minister of the American-backed Palestinian Authority – has successfully marketed himself to the world as an economic reformer, a close scrutiny of his behavior on the economic front has reportedly revealed a significantly different picture. Rather than moving the PA towards economic independence and the building of an infrastructure for future statehood in Judea and Samaria, Fayyad has reportedly been
      ...creating the illusion of economic growth rather than actually stimulating that growth.
      channeling funds from the massive foreign aid he receives towards the expansion of bureaucracy and the payment of extra salaries in a bid to boost his power base among Judea and Samaria Arabs.

      Recently, Dr. Ghania Malhis, chairwoman of the board of trustees at the Economic Policy Research Institute in Ramallah, noted that billions of dollars spent over the past decade have not even restored the PA economy to its 1999 performance. (For more on that report, click here.)

      Fayyad, a former economist with the International Monetary Fund viewed by many in the region as a puppet of Western interests, was never democratically elected to office but was selected by former United States President George W. Bush to serve as prime minister for the PA. As a result of his overwhelming unpopularity on the Arab street, Fayyad has reportedly been spending foreign aid from Western governments on creating the illusion of economic growth rather than actually stimulating that growth.

      While such behavior might sometimes be expected from a novice statesman unfamiliar with economic matters, Fayyad has vast experience as an IMF economist and markets himself to his people and the world as an economic reformer. Yet in practice the growth seen under his leadership originates more from a steep increase in international aid than from policy initiatives originating in Fayyad’s office.

      In addition to massive foreign aid from the West, Fayyad has benefited from Israeli orchestrated shopping sprees in PA-controlled cities undertaken by Arabs living in pre-1967 Israel, a gesture made by Israeli Prime Minister Binyamin Netanyahu in an effort to placate U.S. President Barack Obama. These shopping excursions alone have reportedly raised the PA economy by more than 10%, thereby boosting the total value-added tax pouring into Fayyad’s coffers by hundreds of millions of shekels.

      Despite the fact that these VAT sums – estimated at about 1 billion shekels (roughly $280 million) a year – belong to Israel by law according to written agreements with the PA, the Netanyahu government has refrained from demanding repayment of these funds.

      In what many analysts view to be an attempt at winning the hearts and minds of the Arab people, Fayyad has reportedly begun to reward not only the 150,000 employees of the PA and its militant wing, but also the more than 500 bloated city
      Fayyad continues to point a finger at Israel as an excuse...
      halls and local councils established within the PA that in the past 16 years have grown fivefold. Superfluous and redundant government jobs have stunted any genuine growth in the PA’s economic while at the same time has eaten most of the foreign aid specifically earmarked for development.

      Meanwhile, Fayyad has begun an initiative to destroy Israeli products in the PA and to prevent Arabs under his control from working in local Jewish communities. And in addition to destroying Israeli goods and depriving local Arabs of legitimate work in Jewish communities, Fayyad continues to point a finger at Israel as an excuse for not properly investing foreign aid into the development projects it is officially meant for. Each report he submits to the World Bank is said to be replete with excuses as to why the development funds had not been properly used, excuses that generally place blame-where else?- squarely on the Jewish state.