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PRESS RELEASE
The Ad-Hoc Liason Committee (AHLC), chaired by Norway and Portugal, met in Lisbon 8 of June 2000. The AHLC is co-ordinating international donor assistance to Palestinians in the West Bank and Gaza. The main topic of the meeting was the implementation of Palestinian economic reforms
The meeting concluded by highly commending the Palestinian Authority (PA) on the progress it made toward launching the Palestinian Economic Policy Framework (EPF) in collaboration with the IMF. Recalling President Arafat's announcement at the Committee's last meeting in Tokyo, members hailed the landmark Presidential Decree of January 10,2000 and the establishment, pursuant to it, of the Higher Council for Development, as representing a major reorientation of the PA's economic and financial policies. This view was bolstered by the PA's resolute implementation of key reform measures outlined in the Decree. In this connection, the Committee commended the PA for having established a single treasury account and ensured, with full co-operation by the Government of Israel (GOI), that all revenues collected by the GOI on behalf of the PA flow into that account. Members agreed that this refonn measure greatly improves the governance and transparency in public finances and that it will go a long way in easing the liquidity difficulties of the Palestinian Ministry of Finance (MOF).
The Committee also warmly welcomed the unprecedented, disclosure of the PA's commercial and investment activities contained in thte PA's progress report on the EPF, which was prepared in collaboration with IMF staff and submitted to the AHLC by the Ministers of Finance, Planning and International Co-operation, and Economy and Trade, as well as the Economic Advisor to the President/Co-ordinator of the Higher Council for Development. Noting the significant contribution which this report has made toward expanding the knowledge base about economic and financial policies and developments, the Committee especially welcomed the information provided in the report regarding the establishment of the Palestinian Investment Fund (PIF), which, as envisaged in the January 10 Decree, will manage the full range of PA's commercial and investment activities in accordance with the highest international transparency and accountability standards, as well as the information on the progress toward elaborating a privatisation strategy .
The Committee considered that the solid progress made by the PA in implementing the reform measures outlined in the Decree provided every assurance that the Authority will move swiftly to implement the measures that remain outstanding. In particular, the Committee underscored the urgency that should be attached to reining in public sector hiring, including by having the payroll unit in Gaza moved to MOF. The Committee agreed with the view, jointly held by the PA and the IMF, that prompt action on this front will help ensure fiscal sustainability, and that together with a significant reduction in the stock of budget arrears it will also help ensure a successful launching of the EPF. Finally, the Committee underscored the genuine spirit of PA-donor community partnership with which the economic refonn agenda has been pursued, and it especially praised the essential role which the IMF has played toward that end.
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