Shadow Government

The cost of Palestinian unilateralism

With the Israeli-Palestinian negotiations stalled for more than two years now, the tide of support for recognition of Palestinian statehood at the U.N. General Assembly in September is growing. Palestinian unilateralism has been buoyed not only by strong support from Arab nations, as might be expected, but also from more unexpected quarters, such as Britain and France.

Given the robust rhetorical support for Palestinian statehood, the past weekend's revelation that the Palestinian Authority cannot pay its employees their full salaries in July due to unfulfilled donor pledges is all the more surprising. According to the New York Times, PA Prime Minister Salam Fayyad reported that of the $971 million in pledges made by donors so far this year, only $330 million had actually been paid. Those arguing most strongly for Palestinian unilateralism, the PA's Arab neighbors, are among the stingiest with aid -- among them, only the UAE, Oman, and Algeria have fulfilled their aid pledges. As a result, the PA is saddled with a deficit that stands at $500 million and rising; steep indeed, but equivalent to only about half a day's oil revenues for Saudi Arabia.

This far exceeds the aid shortfall experienced by the PA in 2010, despite the fact that its aid requirements have fallen as a result of Fayyad's efforts to wean the PA off of external assistance. And it comes despite the PA's strides in fiscal management, which should have been heartening to donors wary of their funds being ill used.

That the same friends who are promising their UN votes to the PA are failing to follow through on their aid pledges should give Palestinians pause. The last IMF report on the Palestinian economy, issued last April, heaped praise on the PA's economic efforts, which were in part responsible for a remarkable eight percent increase in the West Bank's GDP in 2010. But it noted that continued economic recovery for the Palestinians depended on three things in particular: further reductions by Israel in restrictions on movement and access within the West Bank and Gaza; better coordination between the PA and Israel on the collection of "clearance revenue" (essentially taxes and fees collected by Israeli authorities and transferred to the PA); and more reliable disbursement of donor aid.

The first two boil down to Israeli-Palestinian cooperation, which is threatened by the specter of Palestinian unilateralism in September. Indeed, shortly after the IMF report was issued, Israel temporarily suspended the transfer of clearance revenue to the PA in protest of the Hamas-Fatah unity agreement. If indeed the Palestinians seek to circumvent negotiations and seek recognition by the acclamation of the U.N. General Assembly, the painstaking gains made in Israeli-Palestinian economic cooperation will almost certainly lost, to the detriment of both parties. And as the weekend's report on unfulfilled donor pledges makes clear, the Palestinians cannot count on the friends cheering them on rhetorically to step up financially if the going gets rough post-September.

For Israelis and Palestinians, there is no unilateral path to peace and prosperity; these will be achieved only through the hard work of negotiations. This is the sobering lesson Palestinians should take from the latest economic data, and the unified message the US and its allies should deliver to Ramallah.


Shadow Government

Morocco's important constitutional vote

Morocco took an important step forward last Friday in approving constitutional changes. The vote was symbolic and substantive, and both characterizations are important. The United States should take note and show support for the changes and how they were brought about. The European Union has already weighed in affirmatively.

The symbolism is important because King Mohammed VI has taken a step that other Arab monarchs are reluctant to even contemplate, much less take. The House of Saud is using dollar diplomacy and other forms of persuasion to encourage all Arab monarchs to stand pat and not respond to the Arab Spring with reforms of any significance. Council on Foreign Relations senior fellow and former deputy national security advisor Elliott Abrams has commented incisively on this issue. The monarchies have been in less political trouble than the fake republics, and so the pressure to respond to demands for reform is less intense; the Saudis believe this passionately and want fellow monarchs to remain in the fold. Thus, King Mohammed VI's careful trek down this path to a constitutional vote in which the yes vote garnered 98 percent (with 73 percent turnout) is encouraging.

As to substance, the new constitution does not represent earth-shattering changes, and the real power of government continues to be in the hands of "one man," as the youth movement rightly points out to its dismay (the movement had encouraged the public to boycott the vote while most civic, media, political, and religious groups supported it). The king will retain control of the military, religion, and the judiciary; and a prime minister will be chosen from the largest party in the parliament and will be head of government with executive over the rest of the government.

But the point is that the king, who has a history of showing his concern for modernization and acting on it cautiously, has offered a new constitution that breaks with the typical oriental despotism of the Arab world: The king will not continue to control every aspect of government and will share power with others -- notably, elected representatives of the people. That might not be earth-shattering in terms of Western notions of government, but it counts for such in the Arab world. And it will be understood that way in Morocco and, importantly, in other Arab countries by rulers and ruled alike. The symbolism is, therefore, the most important substance in this event, and it should bring about more substance; that is, if the transition results in stability and slow but steady reform (think hundreds of years of British constitutional reform), then the king will have succeeded magnificently and his subjects will become more and more like citizens. The youth movement played an important role in provoking this change, but the older hands with a larger view of what is and is not possible in an Arab and Islamic kingdom tempered demands for change that are rightly judged too fast and too risky, for now.