Jordan and the Palestine Liberation Organization have agreed on an economic cooperation pact designed to ensure a Jordanian role in the West Bank economy under Palestinian autonomy.
The accord, which was concluded this week, calls for the Jordanian Central Bank to monitor and regulate the Palestinian monetary policy that will evolve during interim self-rule, which will begin in the West Bank town of Jericho.
The pact was reportedly motivated by Jordanian concerns that Israel would try to exploit the economic benefits of the accord with the PLO at Jordan’s expense.
In a related development, a mission from the World Bank is due to arrive in Israel next week to begin planning an economic infrastructure in the Gaza Strip and Jericho, the first areas to be given autonomy by the Israelis.
About 25 economic experts are expected to lay the groundwork for the investment of the $2.4 billion the World Bank has estimated is needed over the next five years in the areas.
The economic specialists are also planning to provide emergency and technical assistance, including helping to set up a tax-collection system, and begin what the Bank of Israel called “pre-feasibility” studies of various economic projects that have been proposed.
The international economists will have to prepare the economic infrastructure to create a climate that is favorable for the private sector, “on whose shoulders the Palestinian economy will ride,” said Yoav Lehman, spokesman for the Bank of Israel.
“You can’t make a factory if there is no road to the factory, or if there is no telecommunications or electricity,” said Lehman. “The public investment will be used to create this basic infrastructure.”
A SELF-SERVING INVESTMENT
The World Bank’s plan calls for the Palestinians to receive $400 million in international aid in 1994, $125 million of which is slated for relief assistance, double the current amount, and $275 million for public assistance programs.
Over the course of five years, the relief assistance will drop to average $50 million a year, while public investment will increase to an average $475 million a year.
The World Bank mission comes in the wake of an international conference held Oct. 1 in Washington, at which donor countries pledged more than $2 billion for Palestinian economic development over the next five years.
Israel has pledged $25 million to the effort, an action defended this week by Bank of Israel Governor Jacob Frenkel at a news conference upon his return from Washington.
The money is not charity but a self-serving investment in an enduring peace, said Frenkel, who cautioned that there are no guarantees the donor countries will honor their pledges.
Nevertheless, Frenkel was unreservedly upbeat about the reaction Israel received at the international meetings he attended in Washington.
“I personally don’t remember such a period of great optimism about Israel,” he said, noting the enthusiasm was a combined product of the peace agreement and expectations for regional economic prosperity.
Meanwhile, PLO economists have prepared their own 1,600-page economic development plan for Gaza and Jericho, which will form the basis of the technical negotiations with the Israelis scheduled to begin later this month on the transfer of authority to the Palestinians.
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