Development Under Adversity: The Palestinian Economy in by Ishac Diwan, Radwan A. Shaban

By Ishac Diwan, Radwan A. Shaban

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By securing mutual political recognition between the PLO and Israel, the agreement represented a breakthrough, setting the stage for more direct and intensive negotiations. The Oslo Agreement was a careful experiment in forward-looking Recent Political Developments 35 constructive ambiguity. It sought to create a productive political process (focused on immediately achievable objectives) without prejudicing the political ambitions of either party or predetermining the ultimate outcome of negotiations.

Opponents of peacewho have shown themselves willing to use violence to derail the process-stand ready to manipulate and mobilize such discontent. In turn, the collapse of the peace process would almost inevitably fuel more extremism and incite even greater violence. This chapter will discuss how the political process has moved forward with successive agreements as envisioned under the Declaration of Principles. Reviewing the main events, phases, and arrangements, the chapter presents the impact of political progress on development efforts, the economic benefits emerging from the expansion of Palestinian territorial and functional authority, and the effect that postponement of targeted phases has on private sector confidence and foreign investment.

In 1996, VAT clearances amounted to $223 million. The VAT operates on a destination basis (VAT on imports from Israel is remitted by the Israeli treasury to the PA). VAT and other revenue clearances remitted to the PA in 1996 were $423 million-and may grow further in the future as remaining difficulties with tariff revenues and excise taxes on imports from Israel are resolved. 1 continues) Date Signed Title TargetDates October 23-31, 1995 Second MENA Economic Summit, Amman February 1996 Declaration on Principles for Cooperation on Water-related Matters April 22, 1996 Amendment of PLO Charter Key Provisions and * Agreed to establish Bank for Economic Cooperation and Development, based in Cairo, to promote private sector development and infrastructure projects * Established the Middle East-Mediterranean Travel and Tourism Association * Established the Regional Business Council * Palestinian National Council voted to amend Charter and delete clauses that contradict the agreements signed November 1996 January 17, 1997 May 5,1996March 1997 Third MENA Economic Summit Cairo 9 Discuss, among other things, permanent Protocol Concerning the Redeployment in Hebron (Hebron Protocol) * Pushed back timetable of Interim Agreement Permanent Status Negotiations Source:Israeli Ministry of Foreign Affairs.

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