June 23, 1995
ISRAELI ACTIONS TOWARDS STRENGTHENING THE PALESTINIAN ECONOMY
The following report describes recent Israeli activities aimed at aiding
the Palestinian economy. In the wake of a number of deadly terrorist
attacks, which primarily targeted Israeli civilians, security measures
were instituted by Israel in order to protect its citizens. While these
measures may have adversely affected the Palestinian economy, Israel
remains interested in and committed to encouraging economic stability and
growth in the Palestinian Authority. To that end several steps were
recently taken in a number of areas:
Facilitation of Movement of Workers and Goods at Crossing Points in the
Gaza Strip
As of this date the number of workers leaving the Gaza Strip to work in
Israel has risen from zero (three months ago) to 18,000. The temporary
terminal at the Erez Crossing Point is undergoing substantial expansion
and will soon become a permanent terminal. This should enable Palestinian
workers to leave the Gaza Strip and arrive at their work places, via
specially arranged transportation, with minimal inconvenience and in less
time than before.
In order to meet the urgent needs of the population in the Gaza Strip,
imports are being transferred through new cargo terminals. $26 million are
currently being invested in the construction of an import-export site at
the Karni Crossing Point which will handle the majority of goods
transferred from the Gaza Strip to Israel, and vice-a-versa. At present an
average of 170 trucks a day pass through the Karni Crossing Point (160
carrying imports into Gaza and 10 carrying exports from Gaza). $10 million
are to be invested in upgrading the Sufa Crossing Point which handles
almost 400 trucks per day carrying building materials and cement into
Gaza.
We are cognizant of the need for improvement in facilitating exports from
the Gaza Strip and have taken concrete steps to that end. Presently more
than 200 trucks, carrying goods, leave Gaza on a daily basis. About 80
trucks transfer cargo to Israeli vehicles, while 6 to 10 truck convoys, of
up to 20 trucks each, travel daily to the various ports, the West Bank, or
Israeli markets.
As security remains a major concern, these convoys travel under escort
provided by Israel. Special funding has been approved by the Government of
Israel to finance an expansion of the escort program. These escorts will
be under the aegis of the Ministry of Agriculture and will enable up to
400 trucks to depart the Gaza Strip each day.
Palestinian trucks entering Israel in convoys pass through an accelerated
security check in newly constructed facilities at the Erez Crossing Point.
Each loaded truck is checked within 15 minutes and empty trucks take 5
minutes to complete the procedure.
Temporary terminals for goods were inaugurated at the Rafah Crossing Point
and the Allenby Bridge. Each of these terminals can handle 15 trucks per
day for "back to back" transfers.
The energy demands of the Gaza Strip are fully supplied via a direct oil
and gas pipe link, between Israel and the PA, at the Nahal Oz Crossing
Point.
Transfer to the PA of Tax Clearances
From May 1994 until June 11, 1995, Israel transferred NIS 244.3 million
($81.4 million) in tax clearances to the PA. As of now, the total sum of
funds transferred, by Israel, to the PA stands at NIS 346.3 million
($115.4 million).
In accordance with the "Early Empowerment Agreement" (Aug 29, 1994),
Israel transferred to the PA, on May 26 1995, NIS 102 million ($34
million) in VAT clearances from West Bank businesses. NIS 5 million were
deducted from the total sum of NIS 107 million of VAT clearances due in
order to clear the Palestinian Authority's debt to Bezek, the Israel
Telephone Company.
Direct Aid Through the Donor Channel - The Holst Fund
As of now, the total sum transferred by Israel to the Holst Fund stands at
$6.5 million, including $2.5 million transferred on May 29, 1995. Israel's
contribution to the Holst Fund will be, by the end of 1995, $10.5 million.
Joint Planning of Industrial Parks with the PA
On May 23, 1995 Foreign Minister Shimon Peres met with PA Chairman, Yasser
Arafat, and it was decided that the five industrial parks would be built
at Jenin, Hebron, Tulkarm, the Karni Crossing Point and the Erez Crossing
Point. Intensive planning is under way in order to bring this project to
fruition as soon as possible. A joint concept paper has been concluded
between Israel and the PA on this matter.
In addition, Foreign Minister Peres discussed with PA Chairman Arafat a
major international plan, involving the World Bank and the private sector
both in Israel and abroad, for the joint development of the Industrial
Parks.
Joint Economic Committee
The JEC met on May 21, 1995 in Jerusalem, in the presence of Finance
Minister Avraham Shochat and PA representative Abu Alaa. The committee
discussed the transfer of goods from Gaza to the West Bank, Israel, Egypt
and Jordan, as well as issues concerning agriculture, industrial parks,
standardization and money transfers to the PA.
The JEC decided that a mixed subcommittee would be formed to deal with the
Palestinian request regarding changes in the A1 and A2 lists of the
economic protocol of the Cairo Agreement. At the same meeting, Israel
agreed to improve procedures regarding the import of fresh produce into
Israel.