PECDAR HEAD MAKES PITCH FOR INTERNATIONAL

C O N F I D E N T I A L JERUSALEM 001686

SIPDIS

SIPDIS

NEA FOR FRONT OFFICE, NSC FOR ABRAMS/DORAN/LOGERFO, LONDON
PASS TO A/S WELCH AND D/NSA ABRAMS

E.O. 12958: DECL: 04/26/2016
TAGS: PREL PGOV KWBG KPAL KDEM IS
SUBJECT: PECDAR HEAD MAKES PITCH FOR INTERNATIONAL
ASSISTANCE

REF: JERUSALEM 01644

Classified By: Consul General Jake Walles, per reasons 1.4 (b) and (d).


1. (C) Summary. During an April 24 meeting with the
Consul General, former Palestinian Authority (PA) Minister of
Public Works and Housing Mohammed Shtayyah criticized
statements from Hamas leader Khaled Mishal, which he said
reflected the inability of the Hamas-led PA to respond to the
growing political and financial crisis. Shtayyah, as
managing director of the Palestinian Economic Council for
Development and Reconstruction (PECDAR),touted his
organization's independence and appealed for more
international assistance through PECDAR. He argued that
PECDAR could manage a number of humanitarian projects while
avoiding contact with the Hamas-led government. End summary.

Shtayyah: Mishal Statements
Underscore Government's Failures
--------------


2. (C) Commenting on Damascus-based Hamas leader Khaled
Mishal's April 21 comments, Shtayyah noted that Mishal had
sparked outrage among Fatah's cadres. Shtayyah said that Abu
Mazen was correct not to overreact to Mishal's comments
criticizing the PA President and Fatah (reftel). Shtayyah
thought the comments from Damascus reflected Syrian influence
over Hamas, the weakness of Hamas PM Haniyyah vis--vis the
more hardline Hamas elements, and the failure of the
Hamas-led government to effectively respond to its regional
and international isolation. While he expressed hope that
the Hamas-led government would collapse, Shtayyah said that
any collapse should not occur as a result of Israeli or
international interference. Shtayyah dismissed reports that
Saudi Arabia and Qatar were preparing to deliver financial
assistance to the PA in the amount of USD 90 million, adding
that it was unlikely to find its way into PA coffers.


3. (C) Shtayyah said that a new dynamic is needed to
address Palestinian needs such as alleviating poverty and
sparking job creation. Palestinians are growing desperate
for some positive developments. While Abu Mazen's political
program represented the correct path toward ending
international isolation, the presidential office is not the
appropriate address to offset the current financial crisis.
Shtayyah noted that Arab countries are ready to assist but
unsure where to send their assistance.

Shtayyah: PECDAR
Can Bypass PA
--------------


4. (C) Shtayyah argued that PECDAR could bypass the PA
through its humanitarian assistance projects. PECDAR was
established in 1994 to support infrastructure, agricultural,
and other development projects in Palestinian areas as the PA
was still in the formative stage. Shtayyah explained that
PECDAR has strictly maintained its independence from the PA,
including independent financial accounts and direct
cooperation with local officials on its various projects.
Shtayyah remarked that PECDAR is currently working with 12
international donors, including several Gulf nations and the
European Union.


5. (C) The Consul General explained that key international
donors would meet in London to discuss new ways to provide
humanitarian assistance directly to the Palestinian people.
While U.S. assistance is limited to specific areas, other
donors such as the EU could potentially play a wider role.
He noted that the U.S. opposed donor assistance go to cover
PA salaries, as this remained the sole obligation of the
Hamas-led government. Moreover, the U.S. would not want to
see projects implemented through PECDAR if that involved
coordination with PA ministries. The Consul General
requested more information from Shtayyah on how PECDAR
maintains control over its various projects.


6. (C) Shtayyah reiterated that PECDAR functioned without
PA support or assistance. He described a hypothetical
example of a water pipeline project to a Palestinian village:
PECDAR would apply for an Israeli permit to connect the
village to the water source. Once that permit is acquired,
PECDAR could then proceed to implement the project through
private contractors. When completed, the project would be
handed over to local authorities, not the PA. Shtayyah said
that similar methods could apply to road construction.
Palestinian schools or health clinics, however, represented a
different category, as these type of projects might require

some coordination with PA ministries.

WALLES