Opening Address at the AHLC Meeting in New York

Excellencies, ladies and gentlemen,

As Chair of the Ad-hoc Liaison Committee, it is my privilege to welcome you back to New York. Let me thank Secretary-General Ban Ki-moon for kindly hosting this meeting.

A special welcome to Palestinian Prime Minister Fayyad, and to Israeli Director-General Abramovich. Alongside the permanent AHLC members, I am also pleased to see our bilateral invitees joining us once again.

This AHLC meeting at high political level, the third in a year, demonstrates our firm commitment to the two-state solution. The vision of a Palestinian state – living side by side with the state of Israel in peace and security - is our common driving force. We must set ambitious goals and regularly take stock. The next AHLC meeting will be held in the spring of 2009.

We urgently need political progress, and we need practical progress on the ground. All parties must protect the building blocks of the peace process. Political progress and economic improvement are interrelated. If politics and economics do not pull in the same direction, then our common vision will not last.

Some progress has indeed been made since September last year. The Fayyad Government has taken strides on its reform path, including in the security sector. A number of donor countries have contributed beyond their pledges from Paris. However, progress on the ground has not met our expectations.

As we enter a period of political transition in and beyond the region, we must do our outmost to ensure that the negotiation process launched in Annapolis does not falter. We cannot afford another breakdown.

I see four main challenges on our agenda.

First, we need to empower the Palestinian Authority (PA) and prevent its financial collaps. There is still an urgent need to mobilise additional budgetary support in the order of USD 320 million in 2008.

Second, the PA needs donor funds to be disbursed with predictability and regularity. Donor countries are urged to present their indicative figures for next year’s budgetary support to the PA as soon as possible in order to enable the PA to do budget planning for 2009 on a sound basis. Just as important are timely transfers of donor contributions, in addition to regular disbursements of Palestinian tax revenues.

Third, our whole effort to stabilise and improve the Palestinian economy is undermined by the continued building of settlements, by-pass roads and the barrier. The UN, the World Bank and the IMF document that, while taking Israeli security concerns into account, major reductions without delay in the closure regime are an absolute necessity for reviving the Palestinian economy. Implementation of the Agreement on Movement and Access (AMA) is required to clear the way for the local development and private sector growth called for at the Bethlehem conference. Gaza is no exception to this rule, as it is an indivisible part of the Palestinian Territory.

There is an urgent need to take decisive measures to honour commitments undertaken in the Road Map, the AMA and Annapolis. To date, progress on the ground has been too little, too slow.

It may still be too early to speak of donor fatigue. But I do not want to gloss over the deep frustration that has taken hold among many donor countries. If we are to maintain today’s high levels of aid beyond 2010, we need to see results through the growth of sustainable structures. And, to reiterate the political linkage, this is not only a question of the economic sustainability of the Palestinian state-in-waiting. It is also a matter of security in the region.

Fourth, we need an effective mechanism for ongoing dialogue with a view to jointly working out concrete solutions. The reactivation of the Joint Liaison Committee will provide us with an instrument for much-needed three-party cooperation between the PA, Israel and the donor community.

Finally, before giving the floor to our distinguished host, let me add that in addition to our pledge in Paris, Norway will be reallocating USD 15 million in budgetary support to the PA, bringing the total to USD 60 million for this year’s budget. As for next year’s, Norway’s planned contributions to the Palestinians will amount to a total of USD 133 million, of which at least USD 40 million is intended for the PA budget.

We pledge this level of assistance in recognition and full support of Prime Minister Fayyad’s impressive efforts to run a tight ship under very difficult conditions. This in the expectation that Israel will accelerate the removal of obstacles to economic growth, and in the hope that donors will continue their vital support. This is the message we should all send to the Palestinian people from this meeting.

Thank you.