The White House is concerned about chaos in the Gaza Strip following Israel's anticipated withdrawal and is readying measures to help stabilize the economic situation after the disengagement, sources in Washington said this weekend.
The US administration's concerns about economic collapse in Gaza were the subject of talks between Secretary of State Colin Powell and Palestinian Authority (PA) Minister of Finance Dr. Salam Fayyad, and between senior administration officials and World Bank president James D. Wolfensohn.
The sources said Powell called on Fayyad to prepare the financial system in Gaza for a possible weakening of PA authority or even the creation of a political vacuum in wake of an Israeli withdrawal. Powell said the PA must improve its transparency and confidence in the Palestinian financial system in order to ensure increased donations from foreign sources. He said the PA must make every effort to prevent the flow of funds to terrorist organizations.
Fayyad claimed that donor nations have imposed a "financial blockade" on the PA and condemned what he called the "armed robbery" by Israeli forces on three banks in Ramallah in February.
Fayyad told Powell that the PA was seeking $650 million to cover current expenditures for this year, and for stronger efforts to set up a PA aid fund as proposed by the Rome recommendations of Donor countries conference in late 2003.
Last week, Wolfensohn told senior Bush administration officials and Israel Ambassador to the US Daniel Ayalon that the World Bank was prepared to lead an effort to prevent economic shocks in the Gaza Strip after the Israeli withdrawal.
US administration officials expressed satisfaction from the World Bank initiative, and it appears that Israel will also welcome it. The US officials believe that preventing economic chaos will prevent the creation of a political vacuum.
The sources said Wolfensohn views the World Bank initiative as one of its most important tasks and that he was prepared to lay his personal prestige on the line to promote it.
Published by Globes [online] - www.globes.co.il - on March 7, 2004