Now The Palestinians Need An Economic Boost

The death of Palestinian Authority President Yassir Arafat on Nov. 11 has raised hopes of once again restarting talks between Palestinians and Israelis. But those hopes are likely to prove false unless wretched economic conditions improve for the 3 million Palestinians living in the West Bank and Gaza.

Of course, new Palestinian Liberation Organization leader Mahmoud Abbas (who also goes by the nom de guerre Abu Mazen) is an easier man to deal with than was the often inscrutable Arafat. Abbas, for instance, is dismayed by the intifada that has left some 3,600 Palestinians and 1,000 Israelis dead since it started in 2000. He is one of the endangered moderates who favors a two-state solution as outlined at the end of the Clinton Administration. Israel's hard-line Prime Minister, Ariel Sharon, is already taking public note of the change. "My plan is to find a way to open talks to advance our relations when the new Palestinian leadership is ready," he told Likud Party colleagues on Nov. 18.

Credibility issues

But Abbas and his colleagues won't have an easy time persuading their constituents to halt violence and channel energies into a new political process. They may strike Israelis and Westerners as more appealing than Arafat, but these bureaucrats have little stature among their own people. To establish credibility at home, the new leadership will have to deliver on bread-and-butter issues such as eliminating the dozens of Israeli roadblocks that frustrate travel in the territories and make doing business there almost impossible. Such obstacles have contributed to slashing Palestinian per-capita gross domestic product in half, to only $900, in the past four years. "Without an immediate improvement in the economy, there will be no resumption in the peace process with Israel," says Monib al Masri, a Palestinian businessman.

With a Palestinian presidential election scheduled for Jan. 9, U.S. Secretary of State Colin Powell and other envoys are pressing the Israelis to take advantage of this rare window to lend support to the moderates. On a visit to Jerusalem on Nov. 22, Powell secured a commitment from Israel to make it easier for Palestinians to vote.

Along with lifting roadblocks, diplomats want Israel to move troops out of Palestinian towns and to release hundreds of millions of dollars of impounded tax revenues. Another move that could earn points for Abbas would be the opening of Israel's border to more Palestinian workers. At present about 40,000 enter Israel every day -- only a third of the total in 1999 before the intifada started. Unemployment in the West Bank and Gaza now tops 30%.

Abbas has been tapped as the candidate of Arafat's Fatah movement. Other presidential hopefuls may include Masri, who made his fortune in the gulf states and is a major investor in the Palestinian territories. A member of a leading West Bank family, Masri would hope to appeal to Palestinian pragmatists fed up with the corruption of the returnees who surrounded Arafat. Marwan Barghouti, a Fatah leader who is in an Israeli prison on murder charges, is also mulling a run.

The election will be a big test. If it is marred by violence or fraud, hopes for peace talks will recede. With so many cards in play, it is hard to predict the Palestinians' future. But full stomachs and a little money in everyone's pockets can't hurt.

By Neal Sandler in Jerusalem and Stanley Reed in London

Edited by Rose Brady

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