Gulf News
September 21, 2003

Finance ministers of the world’s richest nations yesterday gave their endorsement to the reform process being done by the Palestinian National Authority (PNA).

In a particularly warm statement the Group of Seven (G7) ministers said, “We applaud Palestinian Finance Minister Salam Fayyed’s efforts to improve transparency in the budget and operations of the PNA.”

In a separate report, the International Monetary Fund warned of “the tragic and dangerous conditions facing the Palestinian people.” The fund estimated that in the three years of the Intifada, the Palestinian economy had shrunk by about a third and that $5 billion of potential economic output had been lost.

The IMF report blamed curfews and other security measures imposed by Israel and said: “The regime of check points and internal closures . . . has paralysed trade and raised transaction costs.”

The G7 ministers, who are holding their bi-annual get-together, however, had cautionary words about the dangers of “donor fatigue” that might threaten the $1 billion a year that the West Bank and Gaza need. Before the Intifada, the PNA had a budget surplus in a booming economy.

The G7 ministers then went on to discuss questions of global economic growth and agreed that more should be done to boost domestic economies rather than relying on the US.

Meanwhile, US Treasury Secretary John Snow said the G7 will “seek a solution” to Iraq’s massive debt by the end of 2004.

“To help provide for a sound footing for the future, we in the G7 have pledged to seek a solution to Iraq’s debt problem by the end of 2004,” Snow said in a statement after a meeting with his G7 counterparts.

Snow said he would meet for the first time with Iraqi Finance Minister Kamel Al Kilani today.