"Initially, Palestinian interest [in reform] was basically an effort to address the issue of waste. . . . One year into the establishment of the Palestinian Authority [PA], the Palestinian comptroller issued a report which shocked everybody because the report basically said we have been wasting something like $250 million. . . . Waste, corruption, violation of human rights in Palestinian jails, security forces essentially ignoring any law and order, were all factors that became of serious interest in the early two or three years of the Palestinian Authority. . . . The reason for all of this is the fact that the Palestinians so far have failed to build strong institutions, structurally speaking. . . ."
Why Institutions Were Weak
"We had no previous knowledge or experience with statebuilding as Palestinians. We had a revolution, we had the PLO [Palestine Liberation Organization], and the process of statebuilding started from scratch. There were no clear rules of the game. An old system was being demolished, with all its structures, but none was being built yet. . . .
"Because the interim agreement was transitional, because it didn't create a state, it allowed the continuation and functioning of the PLO. . . . The PLO legacy run by the old guard was revolutionary, had little respect for accountability and transparency, and it had its own institutions, very much authoritarian in nature. The PA, on the other hand, was supposed to be built on a system of law, with a basic law, and on very clear transparent functioning of institutions that would be elected by the will of the people. There was certainly a great deal of conflict between the two, but since the creation of the PA was done by sort of a decree from the PLO, it was the PLO's institutions, values, culture—in other words, PLO legacy—that dominated the process of statebuilding during this whole period. . . .
"The Israelis were certainly interested in having a neighbor who is peaceful, even democratic, but if that contradicted other Israeli interests, certainly the democratic, open nature of the system was not high on the Israeli agenda. . . . [Israeli prime minister Yitzhak] Rabin believed that the Palestinians would be a lot more effective ignoring the rule of law. . . . Israelis were also interested in a Palestinian elite that would negotiate with them terms that would be acceptable to Israel. Call it weakening the Palestinian negotiating position. The Israelis were certainly not interested in a strong Palestinian negotiating position. . . . As a result, the Israelis had a direct role in the corruption and mismanagement of the early period. It was under the different Israeli governments that, for example, we had absolutely no financial transparency. Monies that were collected from customs and taxes and fees went into separate accounts that didn't go to the treasury of the Ministry of Finance and that [weren't] part of the budget that was submitted to the Legislative Council. The Israelis knew about it. Most Palestinians didn't know about it. . . ."
Why Do Palestinians Need Reform?
"First and foremost, every political system needs legitimacy, and the search for legitimacy has been one that every Palestinian, at one time or another, wanted to address. . . . If we agree on the nature of the legitimacy that we would like to use as a source for governance, then it becomes easier to determine what kind of priorities we need. Should that source of legitimacy be the PLO legacy? Or should it be the will of the people and elections, statebuilding in the normal sense, like any other country? Palestinians have not yet made that choice. . . .
"We want strong institutions because strong institutions are ones that are capable of respecting and implementing their commitments. If we don't have strong institutions, we certainly cannot implement our agreements with the Israelis. This is what we've been telling the Israelis for a long time. They were not paying attention. I remember from the early, very early days, we were not sure whether, in fact, the Israelis would be interested in elections, even though this is what the Declaration of Principles spoke about. . . . The first initial response we received from Israelis—and I am talking about Rabin himself—was that the Israelis have little interest in our elections. . . . We told the Israelis then, as we are discovering now, that weak institutions are not capable of respecting their obligations, are not capable of implementing their agreements, and this applies not only to security services, but it applies to every other aspect. Of course, we're not just interested in obligations we made to the Israelis, but obligations made with everybody else.
"We wanted to establish a strong, effective government. We wanted to be a democratic nation. . . . We certainly didn't want to be a corrupt, mismanaged entity. Palestinians felt that they would do better. They always believed that they could do better. Surveys that we have done during this whole period indicated [that] Palestinians embrace democratic values and values of good governance in very impressive ways."
Old Guard vs. Young Guard
"It was very clear from the beginning that there was a lot of tension between the old guard and the young guard. The old guard are people who have been schooled in the Arab political culture. The young guard, who led the first intifada and have lived under occupation with no central government, learned to respect democratic rules because they have to live in a pluralistic society and respect each other. . . .
"It was the PLO that got the agreement with Israel. It was the PLO that gave that agreement legitimacy. It was, therefore, the PLO that put everything in place. It was the PLO that was in control, and it was the PLO legacy therefore that won. And therefore, it was the old guard who won. While in the early period, the young guard were willing to allow this to happen, . . . Gradually, the young guards came to feel that the old guard was not responding to the needs of the society and the people. . . .
"Many people in the young guard believed that there was a conspiracy involving the Israelis and [the] corrupt old guard, who wanted to put their own personal interests ahead of the interests of the Palestinian people. And the failure of negotiations, therefore, was seen as an outcome of that corruption, which was nurtured by the Israelis. This is how the young guard looked at the old guard and the process of peacemaking. It was no longer about ending occupation, in their eyes, but rather about consolidating the rule of a corrupt regime with the PLO legacy. The intifada, therefore, I believe, was the outcome of that disillusionment with the old guard's handling of statebuilding, as well as peacemaking. The resort to violence was also a direct consequence of that. The young guards believed that the only way now to fundamentally change everything was through violence. This would not only inflict enough pain and suffering on the Israelis to force them to unilaterally withdraw, but it would also weaken the control of the old guard. . . .
"We need strong institutions because we want to build our economy. We've failed to do that. We want to provide security, for us and the Israelis. We've failed to do that. We want [a] strong judiciary so that we can have rule of law, so that business can come and invest. We've failed to do that. . . . The intifada, as I believe, weakened tremendously . . . and marginalized the old guard and has led to the creation of a new leadership. It's a de facto leadership. The next elections, I believe, will basically institute this change. The old guard will be out, and the new guard will be in."
Policy #392
