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International donors are cautiously optimistic on eve of Palestinian aid meeting

Palestinians hope for pledges of $6 billion over three years at the Paris conference.

from the December 17, 2007 edition

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Former British prime minister Tony Blair, the international community's envoy for Palestinian development and co-chair of the Paris gathering, says the Annapolis and Paris conferences "must translate into progress on the ground." That means essentially two things: the Palestinians must return to building the institutions and law enforcement that will give Israel a sense of security, and the Israelis must ease restrictions on movement that have hamstrung the economy.

On the eve of the conference, Abbas's prime minister, Salam Fayyad, unveiled a three-year plan that requests $5.6 billion in aid to reform and rebuild institutions and security forces. Catching the eye of some experts is the fact that Mr. Fayyad does not lay all blame for collapse on the Israelis, but acknowledges Palestinian shortcomings – and has laid out a plan to address them.

"Having Fayyad at the steering wheel is giving the international community a new confidence," says David Makovsky, director of the Israeli-Palestinian peace project at the Washington Institute for Near East Policy. "He has a track record, and people know it's no longer the Yasser Arafat era, when they used to pay people out of paper bags."

Fayyad, a respected University of Texas-trainedeconomist and former International Monetary Fund representative, has pressed in the past for reforms. But analysts now see a post-Annapolis environment for advancing both political and economic measures. Another advantage is the focus Mr. Blair brings as representative of the Quartet seeking Middle East peace: the US, the European Union, Russia, and the UN.

"The hope is that between Fayyad and Blair, you have people who will zero in on the requirements for economic development," Mr. Makovsky says, "and not merely on managing handouts."

A key question is how much new aid comes from Arab countries, particularly the oil-rich Gulf states. Despite expressions of support – and assertions that Israel's occupation is a top destabilizing factor in the region – Arab countries have often given little to Palestinians, analysts note.

But post-Annapolis, and with oil flirting with $100 a barrel, speculation is bubbling in Paris that large aid commitments will be announced. If Arab countries do open the coffers, it will be a sign that perceptions in the region of the relaunched peace process have changed, some experts say. "If we see the Saudis putting their money where their mouth is, that will be the best indication of a change in how this process is being perceived and how seriously it's taken," says Michael Hudson, of Georgetown University. "Until now, there's been considerable skepticism, including when it comes to Abbas's ability to really deliver.... If they put up more money, it could suggest a shift to cautious optimism."

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