Opening address at the AHLC meeting in Oslo

Check against delivery

Excellencies, ladies and gentlemen,

As chair of the Ad-hoc Liaison Committee, it is my privilege to welcome you all to Oslo. Let me extend a special welcome to Palestinian Prime Minister Fayyad and the Israeli delegation.

We meet today at senior official level to take stock and address the urgent challenges we need to tackle in the immediate future. In doing so we should use this meeting – and the preparatory phase leading up to the next meeting in September – to focus and discipline our common effort.

I will make four observations:

First, let us remember this: the Palestinian economy will not be sustainable until there is a political solution to the conflict.

The AHLC’s main mission has been – and is – to help to keep the wheels turning in support of the political track in the interim. The mission of the AHLC can only be effective if it works in concert with a dedicated effort to forward the political process. And consequently – when the political process stalls, the majority of donors lack the necessary motivation to maintain their contributions.

Right now, the consequences of the impediments to Palestinian value creation and of the fact that an increasing number of donors are not living up to their pledges is that the Palestinian Authority (PA) – the cornerstone of the future Palestinian state – is heading towards a fundamental financial crisis.

In New York last autumn, the AHLC highlighted the need for additional budgetary support and for regular and predictable disbursements of donor funds. Some donors are living up to their pledges, despite the financial crisis and despite the current lack of political progress. But a growing number of donors are not living up to their pledges. The effect on the PA budget is immediate.

In New York we highlighted the devastating effects of Israeli restrictions on the Palestinian economy. Little has changed. Therefore the financial situation of the PA has gone from bad to worse. The PA is again hanging on by a thread.

As Finance Minister – and now two-time Prime Minister – Mr Fayyad may have worked wonders in terms of ensuring fiscal discipline. But he cannot be expected to work magic without the basic financial means to run a government. Western and Arab donors alike must urgently honour their commitments from Paris in December 2007 and Sharm al-Sheikh in February 2009. 

Moreover, consistent with repeated AHLC messages, Israel must urgently and radically ease restrictions on commercial flows to and from all parts of the Palestinian Territory - in a sustained fashion.

My second point is this: the international donor community’s support to the Palestinian Territory is in essence political, not humanitarian.

Our aim is to help to facilitate the creation of a two-state solution where Israeli occupation is replaced by a free and sovereign Palestinian state, living side by side with Israel in peace and security.

Without this clearly defined political horizon, donor commitment at the current level can hardly be sustained. Again, I believe that continued lack of a political horizon can help explain why a growing number of donors are becoming lukewarm.

My third point: the PA’s financial crisis and developments on the ground represent a direct threat to the ongoing efforts – spearheaded by the Obama administration – to create a context in which final status negotiations can be resumed. A political negotiation process can hardly succeed in isolation from developments on the ground.

Dealing with these questions in detail is not AHLC business. But as I have stressed, the political and the economic processes are linked, they are twin processes, the one cannot work without the other. For the AHLC to contribute to creating a context in which the two-state vision can be turned into reality, we must act on our shared view that economic progress in the Palestinian Territory is an essential part of bringing the Israeli-Palestinian conflict to an end.

This means focusing on donor discipline, effective coordination and concrete follow-up of obligations undertaken by Israel and the PA – such as the Agreement on Movement and Access (AMA).

Recent Israeli steps to facilitate movement internally on the West Bank and to give Palestinian businessmen access to Israel and the outside world should be welcomed. These measures should be sustained over time and further expanded.

We now have an additional tool at our disposal for following up, and keeping a necessary eye on implementation and progress on the ground. The reactivation of the Joint Liaison Committee has strengthened the three-party cooperation at local level in a constructive and practical way. The JLC will be used actively also in the preparations for our next AHLC meeting in the autumn.

Furthermore, in New York last September, the AHLC expressed deep concern over the lack of progress in fulfilling the Road Map obligations, with many donors voicing concerns regarding settlement expansion. Ever since, the same causes for concern have multiplied. And so the unison message from the international community is unmistakable: it is time for these settlements to stop.

My fourth and final point concerns Gaza. We cannot leave Gaza to its own devices.

UN Security resolution 1860 tasked the AHLC with addressing the long-term recovery after the devastation of the war. Now, nearly five months after the dual ceasefire declarations, the Gaza question needs to be fully addressed.

Full opening of the crossings is critical for humanitarian response, socio-economic recovery, and reconstruction. If we fail to take appropriate action to ease the virtual strangle-hold on the people of Gaza, the only local growth sectors will be tunnel trafficking and militant radicalism. The loss will be ours for all to share, in terms of Palestinian authority, Israeli security, and regional stability.

We should welcome the reinforced Fayyad government, without losing sight of the need for Palestinian reconciliation, national unity, and elections. The PA, responsible for assisting all Palestinians throughout the Palestinian territory, should be empowered, also by the donors, to engage effectively in Gaza.

Sooner rather than later, the West Bank and Gaza must be reunified as indivisible parts of one territory, under one authority. If not, the reconstruction and economic revival of Gaza may remain an uphill battle.

In the final analysis, this, too, is a matter of creating a political context in which a two-state solution can be realised. Because absent a modicum of Palestinian political and territorial unity, it will be exceedingly difficult to negotiate, let alone implement, a final-status agreement that stands a chance of ending the conflict between Israel and the Palestinians.

Thank you.