Add it to the list. Fayyad, a starched-shirt economist who got his Ph.D. from the University of Texas in 1986, served for seven years as the International Monetary Fund’s representative to the West Bank and Gaza. He’s well regarded in both Washington and Israel; some think of him as “the un-Arafat,” or at least the best hope for reforming Yasir Arafat’s corrupt administration. As if to confirm their hopes, Fayyad has spent much of his first six weeks on the job tracking down wayward bank accounts and government investments.
He scored one small but notable victory last Wednesday, when Israel suddenly relinquished $15 million from customs and tax money. Though it’s only a fraction of the estimated $660 million owed to the Palestinian Authority, it marked the first time since Israel began withholding the revenues in late 2000 (saying they were being used to finance guerrilla attacks) that money was released. “I think qualitatively, this was a very significant step,” Fayyad said, producing from his bag a record of the Israeli money transfer.
Every bit counts. The Palestinian economy, long plagued by mismanagement and fraud, has nearly collapsed during two years of fighting. According to an American-government study due out this month, more than half of all Palestinian children are suffering chronic or acute malnutrition; an estimated half of the work force in the West Bank and Gaza is unemployed. Fayyad has little or no influence over the key factor for financial revival: Israel, which controls the economic lifeline for Palestinians, has kept the West Bank and Gaza sealed to prevent bombings like the one last week that killed seven people (five of them Americans). But he insists that every dollar collected or spent from now on will be accounted for, and that bookkeeping will become transparent.
That could put him on a collision course with some very powerful people in Arafat’s rebel group turned government. Some of Arafat’s closest advisers have spent years investing Palestinian funds in off-budget ventures, using their government muscle to secure import or export monopolies in cement, fuel and flour. “There’s no question Fayyad is part of the solution,” said a former colleague. “But I’m not sure he can take on all those people who make up the problem.”
Fayyad says he’s getting full backing from Arafat. But skeptics say that may not last for long. Even some Palestinians think Arafat appointed Fayyad in order to deflect U.S. pressure and free up money from Israel. Once the heat is off, they say, he could become expendable. “I’m not looking for any quick exits,” Fayyad says. “I’m going to get this job done.” For as long as he lasts, anyway, sardine snatchers beware.
