Middle East

Palestinian Finance Minister Faces Hurdles

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A Palestinian familiar to Washington officials is handling finances for the unity government formed by Hamas and Fatah as it seeks to gain recognition and financial support from the West. Salam Fayyad has a reputation as a reformer, but says he's discouraged by U.S. objections to the power-sharing deal.


An official with the new Palestinian Authority government is in Washington, trying to make his bid regain recognition and financial support from the West. The U.S. has led an international boycott of the Palestinian government since Hamas took charge a year ago. Now there is a unity government that includes Hamas and the more moderate Fatah movement, and a familiar face is in charge of the new government's finances.

NPR's Michele Kelemen reports.

MICHELE KELEMEN: Salam Fayyad is an old Washington hand. He used to work at the World Bank and knows a lot of the power brokers here because of the last time he ran the Palestinian Authority's Finance Ministry. He has a good reputation as a reformer but says he's discouraged by the amount of time he's had to spend just to get meetings. The U.S. has only slightly loosened its so-called contact policy, allowing diplomats to meet non-Hamas Palestinian government members like Fayyad.

Mr. SALAM FAYYAD (Minister of Finance, Palestinian Authority): To me, it feels like regression. Way too much is being said about the policy on contact, who shakes hands with whom, who says hi to whom, who says hello to whom, when. It's depressing when you really think about that.

KELEMEN: But that's not all he's depressed about. Fayyad told the Aspen Institute yesterday that he feels like he has to put the whole Finance Ministry back together. A year of an aid boycott has taken its toll, he says. European aid flowed to a separate account to bypass the Hamas-led Palestinian government, and Israel has withheld tax revenues. Fayyad says he's back to square one.

Mr. FAYYAD: It's really is, on a personal level, deeply emotional to get to the position that I get back to only to find that things that I thought were fixed had to be re-fixed.

KELEMEN: Fayyad came here for the World Bank spring meetings, but is also planning to meet U.S. officials to try to get one big issue resolved. U.S. banks are not allowed to do any business with Hamas, a designated terrorist organization, so other international banks are fearful of doing business with the Palestinian Authority. Fayyad hopes the U.S. Treasury Department will help fix that. David Makovsky of the Washington Institute for Near East Policy says this is a case where Fayyad's personal respectability may not be enough.

Mr. DAVID MAKOVSKY (Senior Fellow, Washington Institute for Near East Policy): I think Salam Fayyad's hope is that they didn't - the fact that he's got some non-Hamas ministers in the government, there will be people wanting to paper over, you know, the Hamas dimension of this government, and I think that's going to be problematic.

KELEMEN: Fayyad's argument is basically this. If the U.S. wants to promote moderates, it should help this unity government function even though Hamas is part of it. Larry Garber agrees. He was the U.S. Agency for International Development's mission director for the West Bank and Gaza during Salam Fayyad's first term as finance minister.

Mr. LARRY GARBER (Executive Director, New Israel Fund): We need to figure out how to continue to support our interests, which are reform, which are promoting a Palestinian Authority that's going to be in a position to reach compromises with Israel. And I don't think the type of isolation that we're engaged in now is to our interest. To ignore someone like Salam, that just doesn't make any sense.

KELEMEN: Garber, now with the New Israel Fund, remembers long meetings with Salam Fayyad and Israeli officials to get to a point where the Israelis trusted the Palestinians enough to transfer tax revenues.

Mr. GARBER: They should still be able to trust him, and they, too, have to overcome certain political and ideological hurdles to do that.

KELEMEN: Salam Fayyad says, for now, Israelis won't meet with him. He says that's part of his new reality as a member of a government that includes Hamas.

Michele Kelemen, NPR News, Washington.

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