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Oslo's Economics: A Postmortem

(Beirut Daily Star) Mohammed El-Samhouri - The Oslo accord, signed eleven years ago this month, was predicated on the proposition that providing international financial support to the newly created Palestinian Authority would help build its debilitated public infrastructure and attract private investment, so that by the end of a five-year transitional period the Palestinian economy would be on its way to prosperity. Yet today the Palestinian economy is virtually bankrupt and the population has been largely reduced to welfare status. An overly optimistic and simplistic economic vision overlooked whether the PLO, which had no previous tangible experience in managing economic affairs at the level of a state, was capable of undertaking Oslo's economic endeavors, and whether foreign aid, provided in a grossly inadequate political and institutional setting, would be effective in achieving the anticipated economic transformation. Any future attempt to revive the Palestinian economy will have to address and eventually fundamentally alter the institutional and political-territorial setting that has helped cause the economy's near collapse. The writer is a senior economic advisor to the Palestinian minister of foreign affairs.
2004-09-29 00:00:00
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