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Source: http://www.washingtoninstitute.org/templateC05.php?CID=3351
Is the Palestinian Authority Ready for Statehood?
(Washington Institute for Near East Policy) Patrick Clawson and Michael Singh - At the April 13 meeting of the West Bank/Gaza donors group, the IMF and World Bank presented reports arguing that the Palestinians are ready for statehood. Yet that judgment requires three important caveats. First, it depends on future Israeli-Palestinian cooperation; second, it is contingent on Gaza's return to Palestinian Authority control; and third, it does not take into account the PA's broader political readiness for statehood, which continues to lag. Digging into the tables accompanying the IMF report, one finds that two-thirds of current PA receipts are "clearance revenues," that is, taxes collected on the Palestinians' behalf by Israel and passed on to the PA. In 2010, the PA received $1.26 billion in clearance revenues, compared to the $750 million in domestic revenue it collected on its own. In other words, the PA is able to pay its bills only because of the money transferred by Israel. If bilateral cooperation ceased, the PA would be in no position to pay salaries. The World Bank and IMF are correct to praise Fayad, whose accomplishments came against long odds and will be vital to the success and sustainability of any Israeli-Palestinian peace agreement. But they have been put at risk by the stagnation of peace negotiations and the looming prospect of a unilateral Palestinian declaration of statehood. Moreover, they are insufficient without greater attention to the political aspects of state building.