New York, July 25, 2012—Members of the Two-State Solution Caucus in the Knesset heard a presentation by OneVoice Israel on Wednesday, warning that the Palestinian Authority was on the verge of economic collapse.
Over 100 concerned citizens joined a dozen parliamentarians, including Caucus chairmen MK Yoel Hasson and MK Amir Peretz, in a discussion with OneVoice Israel about the implications of an ailing Palestinian economy and stalled peace talks on Israeli politics and security. The report, prepared by Gershon Baskin, an expert on Israeli-Palestinian relations, revealed how the economic crisis dangerously interconnects with negatively shifting Palestinian public opinion on the possibilities of ending the occupation and achieving the two-state solution.
» Click here for the complete report (available in Hebrew only)
“This dangerous combination increases chances of a change in Palestinian leadership when, for many, there’s never been a more ideal leadership for peacemaking” said Baskin. "Increasing numbers of Israelis and Palestinians are losing confidence that there remains a possible two-state solution, which creates urgency for positive political movement on both sides,” he added.
The Palestinian economy witnessed a sharp drop in growth so far in 2012, falling from 9% during the first quarter of last year to 5.4% this year, according to the report, which relied on data from the Palestinian Finance Ministry, high-level Palestinian security officials, and the World Bank. The Palestinian Authority accumulated a national debt of $1.5 billion, in addition to its debt of $1.2 billion to local private banks.
With restrictions on Palestinian exports and half of the Authority's budget contingent on the transfer of tax revenues that Israel collects — though often punitively withholds — for them, the Palestinian government has struggled to pay 153,000 public sector employees, including 30,000 security personnel.
“Prospects for ending the occupation are narrowing while the growth of the Palestinian economy lags behind, creating conditions for another round of bloodshed,” said Tal Harris, executive director of OneVoice Israel. “The alternative to peace is not the status quo; the alternative to peace is war. The solution lies in reducing Palestinian dependence on Israel and allowing them to establish an independent state at peace with all its neighbors.”
The report also noted the Palestinian Authority’s inability to seek assistance from the International Monetary Fund because it lacks internationally recognized country status. The Knesset's Two-State Solution Caucus members in attendance, representing Kadima, Labor, Meretz, and Hadash, found the facts eye-opening and stressed the urgency of returning to negotiations.
"The Palestinian Authority's severe financial crisis and the implications presented in the discussion should disturb everyone's sleep," said MK Yoel Hasson (Kadima). "The prime minister must cease his policy of inaction on the political status quo, which does not serve Israel's interests."
The 35 members of the Two-State Solution Caucus, conceived and co-created by OneVoice Israel and MK Hasson, ensure the two-state solution remains a top priority on the Israeli government's agenda and maintain pressure to end the conflict.