PALESTINIAN PRIVATE SECTOR WILL ASSIST USSC

UNCLAS JERUSALEM 003716

SIPDIS

SENSITIVE
SIPDIS

NEA FOR FRONT OFFICE AND IPA; NSC FOR ABRAMS/DORAN/WATERS

E.O. 12958: N/A
TAGS: ECON ASEC PREL PGOV KPAL KWBG IS
SUBJECT: PALESTINIAN PRIVATE SECTOR WILL ASSIST USSC
EFFORTS, PROCLAIMING: "THERE IS NO BUSINESS WITHOUT
SECURITY"

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Summary
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1. (SBU) U.S. Security Coordinator LTG Keith Dayton met
August 17 with Palestinian business leaders who acknowledged
that security and economic revitalization go hand-in-hand,
made suggestions for more private sector involvement in the
management of the crossings, and pledged to do their part to
assist LTG Dayton in his mission. In a discussion of
security upgrades for the Karni/al-Mintar crossing, the
Palestinian participants welcomed the efforts of the USSC,
but made clear that until a clean and transparent system is
in place at the crossing, any effort to reduce corruption
will fail. LTG Dayton challenged the group to use their
connections with both public and private sector interests to
help him in his efforts. End summary.


2. (SBU) U.S. Security Coordinator LTG Keith Dayton met with
Palestinian business leaders August 17 to discuss common
interests shared by the Palestinian private sector and the
USSC mission. Private Sector Coordinating Council Chairman
Nafez Hirbawi opened the meeting by saying that "investment
requires stability and law enforcement, and the private
sector has a major role to play."


3. (SBU) LTG Dayton stressed his focus on movement and
access, and singled out the Karni/al-Mintar crossing as a key
stumbling block to the revitalization of the Palestinian
economy. He explained USSC progress on the Karni Security
Plan, emphasizing that security at the crossing will remain a
public sector requirement, and noting that there are several
ways in which the private sector could get involved,
including the need for Palestinian companies to lead the
project.

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"Cosmetic Reform Insufficient"
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4. (SBU) Former Minister of National Economy and Chairman of
the Sinokrot Trade Group Mazen Sinokrot explained how
corruption at Karni, and the corresponding money flows, is a
major input for violence in Gaza. He emphasized that
cosmetic reform will be insufficient, and called for
"transparency, quality control, clear policy guidelines, good
governance, and a system that is accountable to all sides -
to the Palestinians, to the Israelis, and to the
international community."


5. (SBU) Sinokrot explained that some members of the group
are developing a recommendation to PA President Mahmud Abbas
(Abu Mazen) to establish an institution, led by the private
sector but reporting to the President, that could lead a new,
clean crossing authority. Alternatively, former
Secretary-General of the PA Cabinet and current Chairman of

SIPDIS
Portland Trust Samir Huleileh suggested that an independent
commission of private sector representatives provide
oversight to the extant General Administration for Crossings
and Borders (GACB). A discussion of corruption ensued, with
participants predicting that, even if the Karni/al-Mintar
crossing is cleaned up and re-staffed with new personnel and
Presidential Guard, it would not be immune to future
corruption unless a new system of rules, procedures,
oversight, and benchmarks is established.

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"It's Politics, Not Security"
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6. (SBU) Huleileh stressed the need for minimum guarantees
which ensure that Karni/al-Mintar closes for valid security
reasons only, and not to pressure Hamas, to pressure Abu
Mazen, or to pressure Palestinians on political issues.
Sinokrot noted that products coming out of the West Bank move
quickly through West Bank checkpoints and do not undergo the
intensive security checks required in Gaza. Samir Hazboun,
Chairman of the Bethlehem Chamber of Commerce, told LTG
Dayton that Bethlehem companies send 140 trucks a day, full
of stone and marble, through Bethlehem crossings to Israeli
markets without comprehensive checks and scanners. "Why is
security not an issue in the West Bank?," Sinokrot
challenged. Answering his own question: "because it's
politics, not security."


7. (SBU) LTG Dayton explained that while he can do nothing
about the politics, he seeks to eliminate the security


variable. He challenged the group to take action, stating,
"when this is all built, when I've done what I can, you're
going to have to address the rest of the story. You're going
to have to address the terrorists and the tunnels. The
Israelis are not making this up. We have ideas for technical
fixes, but you are going to have to solve your own security
problem."


8. (SBU) The group pledged to raise the importance of
management and personnel improvements at Karni/al-Mintar with
Abbas in a formal letter, and to support LTG Dayton in his
efforts, in any way they could. They also suggested that LTG
Dayton meet with the Israeli private sector, many of whom who
share their concerns.
WALLES