The Coordinator of Government Activities in the Territories (COGAT) General Yoav Mordechai, said at the Globes business conference that the Palestinian Authority is completely dependent on Israel's economy, despite decades of financial aid intended to lay the groundwork for an independent PA economy.
"The Palestinian economy is totally dependent on the state of Israel," said Mordechai.
Mordechai added that there has been a 50% drop in foreign assistance to the PA during the last five years.
"We see the Palestinian economy as being important to our national security. What is most important is direct security - the arrests at night, and so on."
Mordechai also said the Palestinian Authority's (PA) budget is currently 15 billion NIS ($4,673,920). Until five years ago, 30% of the budget depended on external aid from Western countries. However, external aid has dropped by fifty percent, since the world began to understand that the Oslo Accords had not accomplished their purpose, and the money was not providing dividends.
Between the Oslo Accords (signed in 1993 and 1995) and 2014, the world provided the PA $16 billion.
"Think about what would have happened if this money was invested in developing infrastructure and places of employment," Mordechai noted. "This money currently goes to a bloated public system, more than a bit of corruption, and recently, we have heard about it being used to pay the families of imprisoned and dead terrorists, despite the fact that this is not legal."
Mordechai also discussed the situation in Gaza, noting that 90% of the area's water is not fit for use, and unemployment among young adults is 60%.
"I can give a lot of other statistics, but the problem is mainly caused by Hamas and the Palestinian Authority," he said. "However, Israel is still very much influenced by this."
"The diplomatic....directive, if Hamas in Gaza would put down its weapons, tunnels, weapons smuggling, and solve the issue of missing and captured people, would turn Gaza into a huge economic opportunity. You can invest in infrastructure there, gas mining, and turn it into something very successful. To sum up, I want to say that economic failures in areas without proper governance can create terror and war. A stable economy can delay, and does not require, war or conflicts. This is an additional aspect of Israel's security concept."