Cablegate: Fayyad Tells Local Donors: Pa Must "Own" Reform

VZCZCXRO5594
OO RUEHROV
DE RUEHJM #2174 2950918
ZNR UUUUU ZZH
O 220918Z OCT 07
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9351
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS JERUSALEM 002174

SIPDIS

SENSITIVE
SIPDIS

NEA FOR FRONT OFFICE; NEA/IPA FOR
GOLDBERGER/SHAMPAINE/BELGRADE; NSC FOR ABRAMS/WATERS;
TREASURY FOR HARRIS/LOEFFLER/NUGENT/HIRSON; BRUSSELS FOR
LERNER

E.O. 12958: N/A
TAGS: EAID ECON KWBG IS KPAL
SUBJECT: FAYYAD TELLS LOCAL DONORS: PA MUST "OWN" REFORM
PLAN; GAZA CLOSURE IS ISRAELI DECISION

1. (SBU) Summary. Palestinian Authority (PA) Prime Minister
Salam Fayyad told local donor representatives on October 18
that it is critical to his government's success that it be
seen to own the reform and development plan to be presented
at the December donors' conference in Paris. Fayyad said
that it would undermine his government's ability to undertake
needed reform if the donors were presented with "a Blair
plan". He also called on donors to reject Government of
Israel (GOI) assertions that the closure regime in Gaza is at
the request of the PA. "Control of the borders has always
been a unilateral Israeli decision, even when we were in
Gaza. Now that we are no longer there, the idea that it is a
bilateral issue is really curious." End Summary.

2. (U) PM Fayyad attended the October 18 meeting of the Local
Development Forum (LDF) in Ramallah. The LDF consists of
representatives of the PA, donor countries and international
organizations, including the World Bank, IMF and UN.

PA "Must Own" Reform and Development Plan
-----------------------------------------

3. (SBU) Fayyad told donors that the PA's ongoing effort to
develop a three-year consolidated reform and development plan
"needs to be seen as a national project." The PA's ability
to implement needed reforms is "utterly dependent" on the
plan being "fully owned" by Palestinians. Fayyad said that
he does not want the plan referred to as "the Blair plan,"
noting that in 2005 "we had this problem with all the
Wolfensohn plans." Saying that he has no reason to believe
this would be a problem, Fayyad stressed to the donor
community, "I cannot tell you how important it is that we own
this process."

4. (SBU) Fayyad briefly updated donors on the PA's fiscal
situation, noting that the transfer of withheld revenues from
the GOI had allowed his government to pay salaries and
arrears in recent months, but "that particular party will be
over in early December." He said that the PA, "under any
scenario" will face a fiscal crunch from "mid-December". He
appealed for any available end-of-year funding from donors to
cover the period "when we are dangerously exposed" between
December and the time funds from the Paris donors meeting are
expected to arrive.

"Simply Not True" that PA Seeks Gaza Closure
--------------------------------------------

5. (SBU) On Gaza, Fayyad told the group that the GOI had
introduced "more restrictive measures", in particular a
limitation on cash transfers to Gazan banks. "Let me
reiterate to you," he said, "the closure on Gaza is enforced
by Israel. Some of you are told by the Israelis that this is
the way the PA wants it. This is simply not true." Fayyad
claimed that decisions regarding the movement of Palestinians
"have always been unilateral Israeli decisions." "Now that
we are no longer in Gaza, the idea that it is a bilateral
issue is really curious." For the GOI to imply that the PA
now has the power to influence Israeli decisions on access to
Gaza is "utter nonsense."
WALLES

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