FAYYAD TELLS LOCAL DONORS: PA MUST "OWN" REFORM

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