Foreign Minister's speech at the AHLC meeting in New York

Secretary General,
Excellencies,
Ladies and gentlemen,

It is a pleasure to welcome you to this AHLC meeting in New York, at a crucial moment for the Middle East peace process.

I would like to extend my warm thanks to Secretary-General Ban Ki-Moon for hosting this meeting and extend a warm welcome to Prime Minister Rami Hamdallah and Minister Yuval Steinitz.

I am also pleased to welcome Secretary of State John Kerry, who will brief us on the political process, EU High Representative Catherine Ashton and Quartet Representative Tony Blair, who will give an outline of the Economic Initiative for Palestine. I would also like to thank my colleagues representing the major donors to the Palestinian Authority for being here today.

Two decades have passed since the signing of the Oslo Agreement in 1993. And two decades have passed since the establishment of the AHLC. Last time we met many of us felt that time was rapidly running out for the two-state solution under the Oslo paradigm.

That is why I insisted on convening today’s meeting at ministerial level for the first time since September 2008. I am grateful that you all heeded this call.

The alternative to progress is not Status Quo, but the beginning of the end of the vision of the two state solution. But contrary to our fears, we are today meeting in an atmosphere of hope. I am encouraged by the decision of the parties to return to the negotiating table.

This gives us renewed belief that a final resolution to the long lasting Israeli–Palestinian conflict may be within reach. We recognize the courage of both parties to stay focused on their common effort, despite repeated attempts to derail the process.

I commend the dedication and persistent efforts by President Obama and Secretary Kerry inject new energy into the peace process. It makes our work as donors all the more meaningful.

Our goal remains the same: the establishment of an independent, democratic and viable Palestinian state that will live side by side with Israel in peace and security.

The leaders of Israel and the leaders of Palestine must show courage and determination to reach agreement. Donors must make additional efforts to underpin their endeavours.

Time is of the essence. The Palestinian economy is slowing down. The Palestinian Authority is faced with serious financial difficulties.

According to the International Monetary Fund, the Palestinian deficit for 2013 is likely to grow from budgeted 1.1 billion USD to 1.46 billion USD. At the same time, budget support contributions from donors is currently forecasted at USD 1.1 billion USD.

This shortfall is adding 350 million USD to the already high levels of arrears and debt. Let me be very clear, this deficit is harmful for private sector liquidity, economic growth and is undermining the fiscal position of the Palestinian Authority.

As donors we must do our utmost to help reverse this trend and make the Palestinian economy sustainable. The Palestinian Authority must also do its part.

The Palestinian economic growth in recent years has largely been driven by donor funding. A growing public sector is now exceeding the limits of sustainability.

Hence, I agree with the recommendation from the International Monetary Fund and the World Bank that a gradual shift from consumption towards more productive investment spending is required.

I welcome the Economic Initiative for Palestine being developed by the Quartet Representative. Mobilising private investments on such a scale could catalyse private sector-led growth in the Palestinian economy. It will help provide a solid economic basis for an independent Palestine.

The Initiative points to a number of enabling factors. This includes easing of restrictions on the movement of people as well as capital and goods. It also means the facilitation of Palestinian exports from the West Bank, from Gaza and from East Jerusalem.

We, the donors, must continue to mobilise the necessary assistance to fund the Palestinian Authority through its transition to independence.

I commend the PA for having taken important steps to amend the situation. Serious efforts are made to strengthen its tax administration, contain the wage bill and reduce subsidies. The PA must live within its means. To survive it must strengthen its capacity for generating income.

I also welcome the announcement made by the Government of Israel to take measures to stimulate the Palestinian economy.

Ladies and gentlemen,

The prospect of peace is on the horizon. We must all do our utmost to support the on-going negotiations and do our part to ensure that they are successful.

As Chair of the AHLC, I call on each and everyone of you to ensure a successful cooperation on the ground. The local coordination structures should be revitalised to ensure maximum effect.

Twenty years after Oslo, the prospect of a peaceful resolution to the Israeli–Palestinian conflict may be right before us. We are now at the moment of truth. Let us go the extra mile to ensure that this opportunity does not slip away.

Thank you for your attention.

• Chair’s Summary - Meeting of the Ad Hoc Liaison Committee, New York, 25 September 2013 (pdf)