Address at AHLC meeting in New York

Dear Colleagues,

It is a pleasure for me to welcome you to this meeting of the Ad-Hoc Liaison Committee.

The AHLC was established on the 1st of October 1993, exactly 25 years ago. As Chair, Norway still firmly supports the Oslo Agreements’ ambitions. Yet it is all too obvious that the current situation on the ground is far from those visions. But with strong political commitment from everyone in this room and the international community we can realize the two-state solution.

The challenges to overcome in order to get there are many. Today I would like to highlight two of those – the Palestinian economy and the humanitarian situation in Gaza.

The reports that the IMF, the World Bank and the UN have produced for this meeting are alarming. The combined effect of current Israeli restrictions and existing impediments to economic activity, lack of agreements on key issues, reduced donor funding and internal weaknesses in Palestine may lead to a collapse of the Palestinian economy in the near future. There is no need for me to here lay out the possible disastrous consequences of such an event.

Nevertheless, let me note the positive and important decision taken by the Government of Israel, based on an understanding with the PA, to permanently solve the hurdle of the Correspondent Banking Relations.

Despite of their commendable fiscal discipline, the Palestinian Authority cannot reform itself out of this crisis. Whatever austerity measures may be implemented by the PA, may be too little and too late. Sharp reductions in donor support add fuel to the fire. Yet the donors cannot cash out a crisis that has a clear political character.

With regard to Gaza, the humanitarian situation cannot be allowed to continue to get worse due to political shortcomings. Gaza cannot and will not survive as a closed economy. If the Gaza economy is not opened, Gaza will fail. Donor funding must alleviate the acute humanitarian situation in Gaza, but cannot resolve the underlying problems.

Over the last six months, we as Chair have worked with you to find ways to address the challenges – in Cairo, in Brussels, and in Oslo. Discussions at both high and technical levels have brought progress. We commend the Parties for having achieved an understanding on Correspondent Banking Relations. We encourage swift and constructive implementation. There have also been other important achievements on the ground, but the list of outstanding issues is longer.

Either we try to deal with them now, or the opportunities that we have today will be lost tomorrow. Politics cannot be allowed to take the time we don’t have. So what should we prioritize in the short term?

Firstly, we – Palestine, Israel, donors and friends – must allow existing arrangements like the Paris Protocol to accomplish their original intention. The Parties need to address the fiscal files in a way that brings the Palestinian income up to a level which in relative terms corresponds to the situation when the Paris Protocol was signed. Donors cannot compensate for the current imbalances.

Secondly, we have to turn on the light and the water in Gaza and allow for the economy of Gaza to open up. The plans to achieve this have been put in place since we met last time in Brussels. In order to turn these plans into reality, the Parties must show restraint and flexibility. Donors need to do more, and fast. In order to facilitate the urgent humanitarian efforts, Norway has financed all costs of keeping the GRM operational up until the end of the year. At that time other donors should come in and share the costs.

It is the PA and the international community, not Hamas, that is providing for the people of Gaza. The answer to this situation, however, is not to stop supporting Gaza. The answer is not to further impoverish a desperate population. I call upon all of us to support the implementation of urgent humanitarian and economic interventions in Gaza. Only improved living standards and interactions with the outside world will bring Gaza back.

Thirdly, more serious efforts need to be made on Palestinian reconciliation and on political talks between the Palestinians and Israel. AHLC cannot facilitate an economic compensation mechanism for political failures.

For the medium term, strategies for a more serious economic development in the West Bank including East Jerusalem and Gaza are already in place. However, unless political ideas become a reality, these plans will remain in the drawer. We have passed the point where economy and institution building will do the trick or politics alone will create economic prosperity.

As Chair of the AHLC we will continue to mobilize and work with you on these and other issues in the follow-up of this meeting. The discussions have already started in order to ensure progress before we meet again in Brussels in half a year’s time.

Despite all difficulties, I am happy to observe the support that has prevailed in support of a negotiated two-state solution to the conflict. This is still the only viable alternative, and we share a belief that it is still attainable. But that belief must urgently be backed up by action, unless we are to be left with an unresolvable problem.

As Chair, Norway has delivered opening statements to the AHLC for 25 years. That was not the original plan. I fully realize that this statement is somehow different from the previous ones. What is not different is Norway’s commitment for our work to succeed. I can assure you that the Chair, together with all of you, will spare no efforts in getting things to move.

Thank you.