Photo: AP Images
A couple of weeks ago, news broke that the Israelis applied to the IMF for a bridge loan on behalf of the Palestinian Authority ($100 million out of $1 billion the PA requested). Though the IMF turned them down, this is a big, underreported development.I have spoken to several sources in the business and political activist communities on both sides, and they all say this is major and that events are clearly moving in a new direction on the ground. Even if we consider simply how chilly the official relationship has been recently — Abbas applying unilaterally to the UN last year — and how unlikely the Palestinians are to repay, this is a significant financial liability Israel has volunteered to undertake, and indicates some important new development underway.
Possibly, this is no less than a prelude to negotiations — the many internal political intrigues that have taken place on both sides meanwhile add to this conclusion, even as the collapse of Israel’s governing coalition threatens to push any new peace initiative further into the future — but there are several other important possibilities as well.
Most importantly, it seems credible that the PA is finally on the verge of a complete financial collapse. It has been teetering on the brink for over a year, and has been in a permanent state of financial crisis since its inception. This threatens an outbreak of chaos and violence. Recently, Saudi Arabia just offered to provide the 100 million to the PA, though this does not detract from the significance of the joint IMF application
A fairly little-known but important document by the Palestinian Strategy Study Group — a diverse group of intellectuals, business people, and other Palestinian activists — examined a range of possible outcomes of the diplomatic process updated last year. Here is a brief summary-excerpt:
Scenarios acceptable to many or most Palestinians are:
- A fully sovereign Palestinian state on the 1967 borders with Jerusalem as its capital, and a just settlement that fulfils the Palestinian refugees’ right to return and compensation.
- A single bi-national state for Israelis and Palestinians.
- A single democratic state in which all citizens are treated equally before the law.
- A confederation between Jordan and an independent Palestinian state.
Scenarios not acceptable to Palestinians are:
- Continuation of the status quo, with open-ended and intermittent negotiations providing cover for continuing Israeli settlement on Palestinian land and the consolidation of the occupation.
- A Palestinian state with temporary borders and limited sovereignty, permanently under the effective control of Israel.
- Unilateral separation by Israel with imposed borders and restrictions on the movement of Palestinians.
- Any notions involving the absorption of Gaza by Egypt and the West Bank by Jordan, or other comparable arrangements.
Be sure to check back here at Business Insider Military & defence because I have some interesting points and quotes on several of these options, including recent quotes by Israeli officials which allude to the last option. I’ll be writing about the outcome of the Egyptian elections (pushing Israel and the PA closer together, strengthening Hamas), about Jordan (which, rumour has it, might be Hamas’s next base), and also about the influence of the US presidential elections.
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