Palestinian Territories

Politics:

• Background

  Palestinian Territories: Key figures

  Mahmoud Abbas (Abu Mazen)

  Head of Fatah, chairman of the Palestine Liberation Organisation and president of the Palestinian Authority since 2005. He is considered to be an intellectual pragmatist and was one of the architects of the Oslo Accords. He headed final-status negotiations with Israel in 1996 and 2000, and became the first prime minister in 2003, but resigned after a six-month power struggle with Yasser Arafat.

  Ismail Haniya

  Prime minister of the Hamas-led PA government since March 2006, although dismissed by Mr Abbas in June 2007, he retains de facto authority in Gaza. He was jailed by Israel for three years during the first intifada (uprising), and deported to Lebanon along with other Hamas members in 1992, but returned to Gaza the following year. From 1997 he headed the office of Hamas's spiritual leader, Sheikh Yassin. His reputation for pragmatism contributed to his selection as prime minister.

  Khaled Meshal

  Chairman of the Hamas political bureau since 1996. He organised international fund-raising for Hamas in Jordan and was poisoned by Israeli agents in 1997, but he survived when King Hussein of Jordan demanded that Israel hand over the antidote. He was expelled from Jordan by King Hussein's successor, King Abdullah II, in November 1999, moving to Qatar and then Syria, where he was named overall leader in March 2004, following the Israeli assassination of Sheikh Yassin.

  Salam Fayyad

  Prime minister in the emergency government formed by Mr Abbas in June 2007. He rose to prominence at the World Bank and was the IMF's representative in Jerusalem in 1995-2001. He was the Palestinian Authority's first finance minister (2002-05), winning international plaudits for introducing greater budgetary transparency. He was courted by Fatah for the 2006 legislative election, but instead formed the small Third Way party and ran successfully under that banner.

  Marwan Barghouthi

  He became a leader of the Fatah "young guard" and Tanzim in the second intifada and regularly opposed Mr Arafat. He was jailed by Israel in 2002 on five life terms. Even in prison he retains a strong grassroots following and considered forming a new party for the 2006 election, but eventually ran for Fatah, winning a seat. Together with members of other factions he initiated the influential Prisoners' Document in 2006, which proposed a framework for a unity government.

  December 02, 2008

• Structure

  Palestinian Territories: Political structure

  The Palestinian Authority

  The Palestinian Authority (PA) is the overarching political authority, encompassing an executive arm (the cabinet) and a legislative arm (the Palestinian Legislative Council; PLC). Mahmoud Abbas (Abu Mazen) is the rais (president or chairman) of the PA, and remains in office with PLO-backing, although his term technically expired on 9th January 2009

  Cabinet

  The current West Bank-based PA cabinet was appointed by Mr Abbas on May 19th 2009, the second cabinet he has appointed since June 2007 when the PA was split owing to the conflict between Fatah and Hamas in Gaza. Hamas does not recognise it and maintains its own cabinet under Ismail Haniyeh, its prime minister since the 2006 election

  Assembly

  The 132-member PLC is directly elected on a multimember constituency basis. The detention of PLC members by Israel and the Hamas-Fatah split have prevented a quorum of 71 from assembling since mid-2007. Its term technically expired on 24th January 2010

  National elections

  In the January 2005 presidential election, which Hamas did not contest, Mr Abbas (Fatah) won 62% of the vote. In the January 2006 legislative election, Hamas won 56% of seats. Negotiations are underway to hold belated presidential and PLC elections by June 2010

  Head of assembly

  Aziz Duwaik was elected speaker of the PLC after the 2006 elections, but was jailed by Israel from August 2006 to June 2009 for being a member of Hamas

  Main political groupings

  The Palestine Liberation Organisation (PLO) is an umbrella group for a number of factions, including Fatah; the Popular Front for the Liberation of Palestine (PFLP); and the Democratic Front for the Liberation of Palestine (DFLP). Outside the PLO are the Islamic Resistance Movement (Hamas) and Islamic Jihad, both of whose political leaders are based in Damascus, the Syrian capital. Another Damascus-based radical faction running bases in Lebanon is the Popular Front for the Liberation of Palestine-General Command. Several new parties were formed in the run-up to the January 2006 election: Badil; Independent Palestine; the Third Way party; and the Palestinian National Initiative

  Palestinian Authority president: Mahmoud Abbas (Abu Mazen)

  Prime minister & finance: Salam Fayyad

  West Bank-based PA cabinet

  Agriculture: Ismail Deiq

  Culture: Siham al-Barghouti

  Economy: Hassan Abu Libdah (Fatah)

  Education: Lamis el-Alami

  Environment: Yousef Abu Safeya (Fatah)

  Foreign affairs: Reyad el-Malki

  Health: Fathi Abu Mghali (Fatah)

  Housing & public works: Mohamed Ishtayya (Fatah)

  Interior: Said Abu Ali

  Jerusalem: Hatem Abdel Qadder (Fatah)

  Labour: Ahmed Majdalani

  Municipal affairs: Khaled al-Qawasmeh (Fatah)

  Planning: Ali al-Jirbawi

  Prisoners: Issa Qaraqee (Fatah)

  Social affairs: Majida al-Masri

  Sports: Jabber al-Da'our (Fatah)

  Telecommunication: Mashhour Abu Daqqa

  Tourism: Kholood Deibes

  Transport: Saadi al-Koronz (Fatah)

  Waqf & religious affairs: Majida al-Masri

  Women's affairs: Rabiha Deyab (Fatah)

  Central bank governor

  Jihad al-Wazir

  January 27, 2010

• Outlook

  Palestinian Territories politics: Hamas-Fatah clashes imperil EU reprieve

  By Andrew Beatty

  The EU is to discuss next month whether to resume direct funding to the Palestinian government after a 13-month suspension.

  Speaking after a meeting of EU foreign ministers and representatives of the Arab League in Brussels on Monday (14 May), EU External Relations Commissioner Benita Ferrero-Waldner hinted that efforts by the Palestinian Finance Minister Salam Fayyad to establish a central government account could open the way to resuming direct funding from the EU.

  She said his efforts could be discussed when foreign ministers meet in Luxembourg next month.

  But the prospects for direct aid have been threatened by a resurgence of fighting in the Gaza Strip between Hamas and Fatah, the two main factions now in the Palestinian government.

  Speaking in Brussels after a meeting with Palestinian Foreign Minister Ziad Abu Amr on Tuesday (15 May), EU foreign policy chief Javier Solana said that security was essential to political progress. "It would be very difficult to move forward politically if the situation internally among the Palestinians is not guaranteed," he said.

  The same day eight Palestinians were killed in an ambush that Fatah blamed on rival Hamas fighters.

  The EU stopped giving direct aid to the Palestinian Authority in April 2006 after Hamas won the Palestinian elections. The EU classifies Hamas as a terrorist organisation. It set up a temporary international mechanism to bypass the government, transferring funds directly to the bank accounts of public servants and other individuals.

  The EU said it would not resume government funding unless the government renounced violence, accepted previous peace agreements and recognised Israel.

  But after the formation of a coalition Hamas-Fatah government in March 2007, the EU indicated that it might be willing to work with individual ministers who meet these demands.

  In tandem, Fayyad - considered a moderate by the EU and the US - has been working to develop a system to ensure that funds are not diverted to terrorists, which is reportedly almost ready.

  Ferrero-Waldner welcomed what she said were positive moves towards developing the new mechanism but added: "There are some technical conditions that still have to be met, which as we see it have not yet been met."

  EU diplomats said that the details of the plan will be essential to its success, particularly questions about who will have access to the fund and who will control it.

  US backing will also be essential as many commercial banks, which would transfer the funds, are unwilling to jeopardise their North American operations by falling foul of US law.

  But EU officials are hopeful that Fayyad's mechanism can provide a way out of the current impasse, amid concerns about the impact of diverting funds away from the central government.

  Although the EU has paid ‘allowances' directly to Palestinian medical staff, allowing hospitals to stay open, the Palestinian government has struggled to pay the salaries of members of the security services and police.

  The World Bank and other international organisations have warned that the Palestinian economy is on the verge of collapse.

  But speaking on Monday, the EU's foreign policy chief Javier Solana defended the EU's decision to stop payments going directly to the Palestinian coffers.

  EU officials claim there has been a 20% increase in funding to Palestinians over the last year, despite the suspension.

  But the EU position was sharply criticised by Abu Amr. Speaking in Brussels on Tuesday (15 May), he called on the international community to end the "political and financial seige".

  May 16, 2007

Economy:

• Background

  Palestinian Territories: Economic background

  Real gross domestic product by sector
  (% share of GDP)
  	2003	2004	2005	2006	2007
  Agriculture	10.1	7.5	6.9	8.1	8.2
  Industry	15.2	15.7	15.2	15.5	15.3
  Services	44.9	47.6	47.2	48.1	48.2
  Public administration & security services	15.5	17.3	17.7	13.5	13.8
  Other(a)	14.1	11.9	13.0	14.8	14.5
  (a )Includes customs duty and value-added tax, less financial intermediation services.
  Sources: Palestinian Central Bureau of Statistics; Economist Intelligence Unit.

  Download text file (csv format)

  December 02, 2008

• Structure

  Palestinian Territories: Economic structure

  	2004	2005	2006	2007	2008	2009
  Nominal GDP (at current market prices; US$ m)	4,198	4,634	4,594	5,147	6,540	–
  Nominal GDP (at current market prices; NIS m)	18,817	20,797	20,475	21,144	23,466	–
  Real GDP growth (at 1997 prices; %)	6.0	6.0	-4.8	-1.4	2.3	–
  Consumer price inflation (av; %)	2.9	3.5	3.8	2.7	9.9	2.8
  Population (m; mid-year)	3.51	3.61	3.72	3.82	3.93	4.04
  Merchandise exports fob (US$ m)	404	412	451	630	529	–
  Merchandise imports cif (US$ m)	2,770	3,050	3,155	3,750	3,772	–
  Trade balance (US$ m)	-2,366	-2,638	-2,704	-3,120	-3,243	–
  Current-account balance (US$ m)	-1,483	-1,107	-538	-441	-347	–
  Exchange rate (av) JD:US$	0.709	0.709	0.709	0.709	0.709	0.709
  Exchange rate (av) NIS:US$	4.482	4.488	4.457	4.108	3.588	3.933
  Sources: Palestinian Central Bureau of Statistics; IMF.

  Download text file (csv format)

  January 27, 2010

• Outlook

  Palestinian Territories: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: The pressure to hold parliamentary and presidential elections in 2010, and to find a way of easing the blockade on Gaza, is building momentum towards an Egyptian-mediated reconciliation between Hamas (a fundamentalist Islamic Palestinian Organization resisting Israel in Israel-occupied territories) and Fatah (a Palestinian political group seeking an independent Palestinian state). The Palestinian Territories will continue to diverge economically: Gaza's economy will continue to shrink if the Israeli blockade remains in place, and the West Bank's economy will grow modestly if relaxed restrictions continue and donor development funding and private investment flows are forthcoming. The economic policy of the Palestinian Authority (PA) will focus on fiscal consolidation and private-sector growth.

  DOMESTIC POLITICS: The Palestinian political scene remains locked in a stalemate between Fatah (the party of the Palestinian president, Mahmoud Abbas, which controls the West Bank) and Hamas (the Islamist group that won the 2006 parliamentary election and consolidated control in the Gaza Strip by militarily defeating Fatah forces). Mr Abbas then dismissed the Hamas government and appointed a rival cabinet, based in the West Bank; both now claim authority over the whole Palestinian polity. The West Bank government is led by Salam Fayyad, a former World Bank official, and is considered to be the legitimate PA by most of the international community, even though its status is constitutionally weak. Divisions within Fatah could result in a leadership challenge in 2009/10; indeed, it will probably take a new leader to reform and renew Fatah. Hamas will struggle to meet the basic needs of Palestinians in Gaza while Israel continues its blockade of the territory and international donors refuse to deal with it. Although Hamas' steadfastness will consolidate its base and bolster its standing in the West Bank, it is likely to lose support in Gaza as more people there begin to see Hamas as a barrier to an easing of their suffering. The Middle East Quartet (the US, EU, Russia and UN), upon which the PA depends for financing, has rigid and long-standing preconditions for the kind of Palestinian government it will deal with, which isolates Hamas. There have been signs of debate within some EU countries and even some softening from the US, but at present the preconditions remain in place: formal recognition of Israel, renunciation of violence and the acceptance of all former accords between Israel and the Palestine Liberation Organisation. Hamas is hampered by its political platform, which advocates armed resistance against Israeli occupation. Although its rigid ideology will not stretch to recognising Israel, it has demonstrated considerable practical flexibility by, for example, endorsing the principle of setting up a Palestinian state in territories occupied by Israel since 1967, which implies a de facto acceptance of Israel's existence in the rest of historic Palestine. The ongoing unilateral ceasefire demonstrates that the political leadership is able to rein in the movement's armed wing. However, the rise of jihadist salafi groups is in part related to dissatisfaction with Hamas' current muted approach to resistance against the occupation, and, if the blockade continues unabated, the military wing of Hamas is likely to return to launching attacks on Israel. The Economist Intelligence Unit's core scenario is that the factions will reluctantly agree, through Egyptian mediation, to the formation of a temporary national unity government, or at least a less formal "advisory council", to oversee the parliamentary and presidential elections. A deal would also involve the release of political prisoners jailed by both factions, and probably the deployment of PA security forces to Gaza's borders, a move that would put pressure on Israel to ease the blockade. Were Hamas to win, it would need to form a national unity government and appoint technocrats to key positions in an attempt to avoid another donor boycott. Fatah could govern alone, but would need to tread lightly or risk sparking another round of factional fighting. Although not our core scenario, there is still a reasonable likelihood that reconciliation efforts will flounder and Gaza and the West Bank will remain under separate administrations throughout 2009/10.

  INTERNATIONAL RELATIONS: After decades of unsatisfactory peace negotiations, neither Israelis nor Palestinians seem able to envisage a breakthrough. The US president, Barack Obama, has made a point of addressing the Middle East peace process from the start of his presidency, as part of a wider policy to improve relations with the Muslim world. He has urged the Israeli prime minister, Binyamin Netanyahu, to freeze all settlement expansion, which he has so far refused to do. He is unlikely to yield unless the request is backed up by a credible threat such as a suspension of US guarantees on Israeli government bonds or a reduction of military aid (Mr Obama's budget for 2010 allocates US$2.8bn to Israel). However, such measures are unlikely to find backing in the US Congress, which is more strenuous in its support of Israel. In Gaza, Hamas has been relatively effective in enforcing (on other factions) the unilateral ceasefire it declared on January 18th. However, there are sporadic Israeli attacks on the smuggling tunnel network and elsewhere. If these attacks and the blockade continue, then Hamas' ability and willingness to maintain the ceasefire will weaken. The criteria for a sustainable bilateral ceasefire are well understood, and include guarantees that the borders with both Israel and Egypt will be open (which would also undermine the economic viability of the tunnels) as well as a prisoner exchange. A Palestinian reconciliation agreement, with deployment of PA security forces to the borders, would reduce the force of one of Israel's arguments for maintaining the blockade (the threat of Hamas launching or permitting attacks on the crossing points or through them into Israel) but would not guarantee its lifting. The EU provides the largest contribution to the PA budget, but politically it remains secondary to the US, in part because of the wide range of positions held by its member states. The EU will continue to approach the Israeli-Palestinian conflict through the lenses of international law and human rights, which will result in frequent statements criticising Israel, but little punitive action. As Israel's largest trading partner, the EU could exert considerable pressure, but it is unlikely that its 2000 Association Agreement with Israel, which facilitates free trade, will be suspended, although tighter labelling conditions will be applied to goods produced in settlements. Meanwhile, there will be ongoing efforts to encourage Palestinian exports to the EU, and if Israel could be persuaded to permit the opening of a port in the Gaza Strip (although this is unlikely in 2009/10), trade with the EU would become a vital lifeline. Regional players have been polarised in recent years: Iran, Syria and Qatar are closest to Hamas, whereas Saudi Arabia, Jordan and Egypt back the Fatah-led PA (although Egypt also maintains relations with Hamas and presents itself as an impartial mediator). A sustained thaw in Syrian-Saudi relations could offer the prospect of a more unified Arab position that would be supportive of Palestinian reconciliation. Otherwise, Arab involvement is unlikely to go much beyond financial aid. Israel has so far ignored the 2002 Arab Peace Initiative, which offered Israel normalised relations in return for withdrawal to the 1967 borders and a resolution of the refugee issue. The initiative's sponsor, King Abdullah of Saudi Arabia, has warned that it will not remain on the table forever, but Israel will instead strive for normalisation based on the shared Arab and Israeli concerns about Iranian influence and on more modest concessions to the Palestinians.

  POLICY TRENDS: The PA will continue to follow the broad economic policies outlined in the 2008/10 Palestinian Reform and Development Plan (PRDP): to consolidate public finances by increasing tax collection and limiting spending, reducing the structural deficit and to stimulate growth through private-sector investment. It will be funded by the remainder of the US$7.7bn pledged by international donors in Paris in December 2007. The PA's recently unveiled plan to improve the functioning of its ministries, in preparation for statehood, is less specific in terms of economic policy, but is broadly complementary to it and is likely to attract ongoing donor support beyond 2010. However, the failure of Qatari-owned Wataniya Mobile to launch a mobile-phone network in the Palestinian Territories, which was prevented by Israel's refusal to release frequencies, demonstrates the limits on the PA's ability to make economic policy. The erratic rate of donor disbursements will continue to create cash-flow problems for the PA, although efforts will be made in 2010/11 to better align spending plans with cash flows. In Gaza, the economic policies of the Hamas administration, highly constrained by the blockade and by banking sanctions, will focus on encouraging self-reliance and optimising the distribution of whatever resources are permitted in by Israel or smuggled in through the tunnels under the Egyptian border. The PA is broadly meeting the PRDP's recurrent revenue and expenditure targets, excluding the fiscal impact of the Israeli invasion of Gaza. If Wataniya is forced to withdraw, and sues the PA for the recovery of licence fees and its investment expenditure, this would be a very heavy cost to bear, equivalent to up to one-quarter of the PA's annual revenue. Should the Gaza and West Bank administrations unite, it would also impose substantial additional costs on the PA, which is currently only partly funding public-sector salaries and services in Gaza. Furthermore, the devastation of Gaza during the Israeli invasion has significantly increased the (already substantial) funding that will be needed to rebuild its infrastructure.

  ECONOMIC GROWTH: Since mid-2007 there has been a divergence between Gaza, which continues to decline as a result of the blockade and invasion, and the West Bank, where a partial recovery is taking place with international donor support to the PA under the PRDP. The recent easing of some internal and external closure mechanisms in the West Bank could permit some growth in 2010/11. However, real GDP per head in the West Bank in 2011 will still be about 10% below its 1999 level. In Gaza the current situation and the outlook are much worse: real GDP per head is about 40% below what it was in 1999 and about 45% below what it currently is in the West Bank. Even if the Israeli blockade were to be substantially relaxed, real growth in GDP per head is unlikely to exceed a few percentage points, given the long-term structural damage done to the economy over the past four years. The macroeconomic outlook in 2010/11 will depend, above all, on the political situation, which looks poor. It is very hard to see how the IMF's baseline growth forecast of 6.5% in 2010 and 7.5% in 2011 can be achieved unless there is a near-total end to internal and external closures, well beyond the limited easing that has taken place in recent months and including the lifting of the blocking on Gaza, and unless donors make good on their pledges of substantial development aid (not just recurrent budgetary support). It is more likely that constraints on growth will remain high over the next two years, and that concerns about ongoing and future closures will inhibit private-sector investment. The completion of the Israeli separation barrier will have a lasting impact on the economic landscape in the West Bank, making it much harder for Palestinians to work in Israel, cutting Palestinian communities off from one another and from their agricultural land, and restricting mobility and economic activity.

  EXTERNAL ACCOUNT: In August Israel announced that the Allenby Bridge crossing between the West Bank and Jordan will be open for commercial shipments for 24 hours at weekends (Friday and Saturday). According to the Portland Trust, a UK-based charity, the Palestinian authorities expect the extended hours to enable 3,000 vehicles/day to cross, a significant boost in the volume of trade. However, movement of goods remains constrained by other factors: the Israeli-imposed system of back-to-back transfers results in a 4-8 hour crossing time, which raises costs; and the lack of a cold-storage facility hinders the shipment of perishable goods. On August 10th, Palestinian customs began using ASYCUDA World (Automated System for Customs Data), which will simplify customs procedures, improve risk-management and enable importers and exporters to process transactions by e-mail, reducing the cost and time involved, in addition to providing data for public policy. ASYCUDA was introduced as part of a programme by the UN Conference on Trade and Development to modernise Palestinian customs. Equipping the PA with the latest administrative technology to manage trade is regarded as an important step in building the institutional foundation for an independent Palestinian state.

  October 01, 2009

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Country Briefing

Land area

West Bank (including East Jerusalem): about 5,800 sq km; Gaza Strip: 365 sq km

Population

The total population at end-2008 is estimated to have been 3.93m, excluding about 470,000 Israeli settlers in the West Bank (comprising 190,000 in East Jerusalem, a further 213,000 to the west of the separation barrier—existing and planned sections—and 67,000 to the east of it)

Main towns or urban centres

Population by governorate (includes outlying areas); '000; end-2007 (official West Bank census and Economist Intelligence Unit estimates for Gaza)

Hebron: 552

Bethlehem: 176

Gaza City: 535

Rafah: 181

Jerusalem (East): 364

Tulkarm: 158

Nablus: 320

Qalqilya: 91

Khan Younis: 296

Salfit: 60

Ramallah & Al Bireh: 280

Tubas: 50

Jenin: 257

Jericho: 42

Deir al-Balah: 221

Climate

West Bank: hot and dry summers, cool and wet winters; Gaza Strip: Mediterranean weather. Both regions are prone to strong sand winds, known as Khamasin

Weather in Jerusalem (altitude 757 metres)

Hottest month, August, 12-29°C (average daily minimum and maximum); coldest month, January, 4-11°C; driest months, May-September, 0 mm average rainfall; wettest month, January, 121 mm average rainfall

Languages

Arabic is the official language; English and Hebrew are widely spoken

Measures

Metric system. Local measures also used, especially 1 dunum=1,000 sq metres

Currency

New Israeli shekel (NIS)=100 agorot. Jordanian dinar (JD)=100 piastres

Time

2 hours ahead of GMT

Public holidays

New Year's Day (January 1st); Prophet's birthday (February 26th 2010); Land Day (March 20th); Labour Day (May 1st); Prophet's ascension (July 9th 2010); Eid al-Fitr (End of Ramadan, September 11th 2010); Independence Day (November 15th 2010); Eid al-Adha (November 17th 2010); Islamic New Year (December 7th 2010); Christmas Day (December 25th)

January 27, 2010