Daoud Kuttab: A new government has been established in Israel that must really throw a monkey wrench in your ministry's planning. As the minister of Planning, how is your ministry, which is looking at long-term plans, adjusting to the changes in Israel after the election of Mr. Netanyahu.
Nabil Sha'ath: If we start with the really long run, we do not think, in the Ministry of Planning, that Mr. Netanyahu is going to change things. In other words, our plans for an independent Palestinian state side by side with the State of Israel haven't been changed by the advent of Netanyahu. We want to maintain good economic relations with Israel, but we strive for an independent political entity, living in peace, cooperation and coordination with its neighbors, with people-to-people programs that will really end years of confrontation and turn them into genuine reconciliation. Thus, the image and the goal of our endeavor has not been changed by the advent of Mr. Netanyahu.

Daoud Kuttab: You really think so, after Mr. Netanyahu's call for doubling settlers in the West Bank?
Nabil Sha' ath: I will come to the short run which is, of course, very serious. I am not in any way marginalizing it. Our five- to ten-year plans are still based on the premise that this peace process is good for Israel, is good for the Palestinians, is good for the Arabs and is good for the world. The majority of Israelis still support this peace process. So in terms of the direction in which we are heading, it is still that of independence, of return of the refugees, of building up a prosperous country, of peace and neighborliness. That still has not changed. Nevertheless, we recognize that the Netanyahu government will in, the short run, put serious obstacles on the road to that
goal. Therefore, I would rather see the statements of Mr. Netanyahu and his coalition members as aberrations, as obstacles, as impediments, rather than as a total redirection of the road back to confrontation.

Victor Cygielman: When you say the short run, you mean four years?
Nabil Sha'ath: Anything less than five years I consider the short run..
Daoud Kuttab: Is there anything that your ministry will do that will affect people in the next four years?
Nabil Sha'ath: Of course. We have already done a lot of work on questions of the closure. In the short run, the closure - which has been imposed during the last two years - has been absolutely devastating to many of our plans. In a way, the closure has totally delayed our plans for major development on the road to economic independence within interdependence. It has diverted money from long-term investment programs into short-term emergency projects and current budget-deficit financing. It has delayed the coming of money from the donors. It has devastated the present limited economy, creating very high unemployment and reducing income. The World Bank's first estimate was by 21 percent this year. But donors do not want the thing to look as bad as it really is. It is devastating.

Daoud Kuttab: And you are still optimistic. Why?
Nabil Sha'ath: The closure has been the product of a government of Israel that claimed it wanted peace most. It was triggered by the security explosions from our side. But, later on, it became a collective punishment for our people. And as a collective punishment, it went on while the previous government continued the process of withdrawal from the West Bank. We saw it as a very severe and unfair measure, but not one intended to kill the peace process. Therefore, we dealt with it as a short-term measure. The new Netanyahu government could be an aberration; but it certainly could also be a long-term impediment. I am not ruling out the possibility that, eventually, it can kill the peace process altogether. That is still a possibility. But I see it as remote in light of the situation in Israel itself, in the Arab world and in the world at large.

Daoud Kuttab: If the Netanyahu situation is not an aberration, there are Palestinians that are already saying that maybe the concept of a Palestinian state is not the most appropriate one. Maybe we should now rethink the idea of a binational state.
Nabil Sha'ath: No. I do not think there is any chance today of a binational state. Remember, I was the father of the idea of a democratic, non-sectarian, secular Palestinian state for all its Jews, Christians, and Muslims. I think in the very long run it is the best idea. It is, after all, the idea that promoted Mr. Mandela from a prisoner in South Africa to President of South Africa, the idea that you can make a multiracial, multireligious society succeed in a unified state, based on two nations or three religions. But that will not work today.

Daoud Kuttab: We already have apartheid in the West Bank. Jews have different roads, different electricity grids, different water quotation prices, different permits.
Nabil Sha'ath: You are talking about apartheid, not a binational state. A binational state is a state of two nations, and that is not the case in the West Bank. The case in the West Bank is an occupied country run by another country that provides apartheid-like privileges to its own conquerors who have taken part of the land. This is not a binational state.

Daoud Kuttab: Some say that Palestinian thinking should demand and request and even approve the idea of a binational state.
Nabil Sha'ath: Demand of whom?

Daoud Kuttab: Of Israel. Change the ideology.
Nabil Sha'ath: The Israelis are neither ready nor willing to contemplate that idea, Even the most peace-loving part of the Jewish constituency in Israel is not interested in pursuing this idea, So, if it is to work, this idea must at least have a hard core of advocates on the two sides that try to win support from the rest of the population. Today in Israel, not even the most dovish parts of the spectrum - Meretz or more dovish people to the left of Meretz ¬contemplate a democratic binational state. In fact, the goals adopted by the Labor party favoring a Palestinian state are based on the idea of separation of the two nations, not on the idea of integration. By contrast, in terms of closure, Likud might turn out to really be much better than Labor. The Likud may reduce the closure for its own reasons, because it does not believe in separation and fears the closure will create political separation and the possibility of an independent Palestinian state, So the peace camp in Israel wants separation and the non-peace camp wants integration. Where would you be then in asking for a binational state? With the Likud? You will end up with the integrationists - i.e., the expansionists - rather than with those who believe in the rights of the Palestinian people to self-determination.

Victor Cygielman: I have heard, very often, members of the Palestinian Legislative Council (PLC) and officials ridicule Israeli leaders' opposition to a Palestinian state. Some told me, "In fact we already have a state. A few things are missing. We have a government, a parliament, an authority." What do you think of this concept?
Nabil Sha'ath: I agree. The idea of an independent Palestinian state has nothing to do with the Israeli side, or who is running Israel. An independent Palestinian state is simply delayed now because of the land issue. We do not want to declare an independent state in Gaza or in Nablus or in Bethlehem. We want an independent Palestinian state on all the land occupied in 1967. If you go back to Oslo, an independent Palestinian state is not on the agenda. What is negotiable are the borders of the state, not the state. Therefore, we are a state in the making. We will be an independent state which will emerge naturally within its agreed borders, with the completion of Israeli withdrawal.
Before leaving this subject, I also want to layout some of the serious concerns about the Netanyahu government. I think the basic problem that we are going to face with Netanyahu is what he is going to do about settlements and Jerusalem while trying to extend the duration of negotiations. He will try to create facts on the ground while procrastinating over the negotiations. I am not in any way minimizing it, but Netanyahu will not be able to get away with it. We are going to fight that, and I think Netanyahu will find that Israel could lose all the privileges in the Arab world, and with many of the non-traditional trading partners that started working with Israel as a result of the peace process. He will be isolated in Europe, and even eventually in the United States. He is going to face even more problems than Shamir did in the United States during the days of Bush and Baker.
We are going to have the support of a much broader front of supporters, and gradually even within Israel. What we expect from Netanyahu is exactly what his government has declared: first, that it is going to implement, in letter and spirit, the agreements signed so far, and second, that it is going to continue negotiations on permanent settlement. If they implement the agreements that have been signed and go directly to the permanent-status negotiations, we will play the game with them. If they try to procrastinate in these negotiations and create facts on the ground, we will confront them.
A Likud government signed the first peace with an Arab country, which included full withdrawal to the last inch and the end of settlements to the last one. Yamit and Taba are two examples. So it is possible that the Likud government will turn around and instead of being an impediment, will sign a historical peace with the Palestinians. Whatever it is, we are working to build the future Palestinian state as if it is going to happen in the next five to ten years.

Daoud Kuttab: What is your scenario on nation-building.
Nabil Sha'ath: Politically, we want to build a nation that has a strong government, strong enough to maintain peace and security, but that has the support of a broad base of a democratically elected parliament and other institutions, such as local government. Such institutions must survive the problems of the provisional aspect of the agreement, particularly in terms of security. When we started building the Palestinian Authority, there was no question of our acting in an autocratic way, violating human rights or democratic norms. All the doubts that were created in the minds of our own people, let alone others, were created as a result of the security confrontation. Security confrontations always create problems, both of political consensus and of human and citizens' rights.
It is very difficult to fight a local militia bent on destroying your peace process, and therefore your entity, by following the rules of the book. Even in England, where the book was written years ago, the anti-terrorist laws violate a lot of the normal working of the due process of the law. In Italy and Germany, and currently in the United States, there are serious debates about the anti-terrorist acts. Whenever a nation is faced with an enemy from within that is armed and is using its arms to topple the state, whether it is democratic, like England, France, Germany or the United States, or not too democratic, such as some of our Arab neighbors, p;:.rticularly Algeria ¬whenever this proHe:n presents itsdf, the normal measures of due process are not sufficient. Therefore, you go beyond the norms of due process until you restore the status quo ante. Then you try to reduce from the norms that you had to make to deal with the new threat. Our march towards democratically based institutions again faces the serious impediment of our having to deal with our own armed militias conducting a campaign of violence against the peace process through killing Israelis.

Daoud Kuttab: But Eyad Elsarraj was not Hamas.
Nabil Sha'ath: Granted. But because it is just Elsarraj it is really an aberration. Whenever you talk about a country that has one case -

Victor Cygielman: Excuse me. It was not one case. Several journalists have been arrested, as well as Elsarraj and others, all for the same reason, for calumniating or offending the Palestinian National Authority, which is an argument you hear only in totalitarian states.
Nabil Sha'ath: I do not want to rationalize. I am not in any way defending what has been done against Elsarraj or others. I think it was wrong and had to be corrected, and finally it was corrected. And not only by the pressure of international public opinion, but by the pressure of our own democratically elected institutions.

Victor Cygielman: Was it debated in parliament?
Nabil Sha'ath: It was seriously debated in the Legislative Council. The problem is not Elsarraj. The problem has been hundreds of Hamas activists who have been arrested and some of them tortured to give information about their hide-outs and their arms caches and their plans to attack the next Israeli target. The assumption is that it is all right to torture such persons, but some of these were really innocent. So I am saying Elsarraj is an isolated case. The basic problem has been the security issue. How do you maintain the thin line between security and human rights, between security and citizens' rights? Admittedly, where all the actual perpetrators are suicides, they leave no trace or proof.
What I really want to say is that facing the problem of terror and security made the Palestinian National Authority (PNA), for the first time, make choices that were contrary to what almost all Palestinians wanted when they started their PNA. You add to that other types of aberrations, the Elsarraj case

Victor Cygielman: Journalists.
Nabil Sha'ath: You are really talking about two or three cases, and all of them were briefly detained, created a furor, were released and you never heard of them again. Elsarraj was called in more than once. I think the problem was very much what he was telling the world, which in my mind is no justification for his arrest. I do not want to defend that at all.
So the plan was to build democratic institutions, and we did. We are the fastest country in the world to have democratic elections for president and council before it has declared itself to be an independent state. And if you have any doubt about the freedom of our PLC, go attend it. It is free. You can attend any of the sessions. It is really very tough on the president and the PNA.

Daoud Kuttab: What about the economic sphere?
Nabil Sha'ath: The institutions of a democratic state with a multiparty system - central government, local governments, NGO's - have created, in effect, fertile ground for the kind of economic policy we aim at. We have very little land and very little water, and almost no mineral resources. But we have people, technically skilled people, steeped in entrepreneurship, who have creatively developed business enterprises all around the world. These have learned the skills of entrepreneurship and business operation, having developed credit-worthiness, capital, savings, technology and contacts. This is very rare.
So we plan on the basis of a free-enterprise economy, with the least regulatory powers and regulations, based on markets movements, coupled with the entrepreneurial and technical skills of the Palestinians. We should be able to choose those economic endeavors in which we have a sustained advantage, and therefore should be able to create export-driven enterprises without the problems that have limited other Third-World countries, First, the government must overcome the very serious infrastructural lags caused by long-term occupation and closures. Whenever an infrastructure can be privatized we are starting it privately run, such as telecommunications and power generation. Whenever it can be regionalized - such as linking with the regional electricity grid, the regional road network, the regional natural gas pipelines, the regional tourist development plans - we will regionalize.

Daoud Kuttab: Which of the sectors of economics is your priority?
Nabil Sha'ath: We have a big agricultural sector, but this has to be improved and turned around to also produce export-driven agriculture. And that is why some of our most important physical plans have been a harbor and an airport. In industry, we have to start with what we do have: the textile and shoe industries, but we have to move into high-tech industries, which are best suited to the Palestinian composition of high-level manpower, as well as to an environmentally sane and export-driven industry. This could be the most successful co-venture with Israel. The road to regional cooperation with Israel lies very much in our development of high-tech industry. In tourism, which has been stalled by the closure, we must develop a regional approach to both holy and non-holy tourism, whereby we share seriously in tourist income. We will have a lot of Palestinian and Arab tourists who will want to corne spend the whole summer in Palestine. Finally, other types of services. We really have to see Palestine in a similar light as maybe Israel and Lebanon, and that is developing very important and advanced hospitals, research inst!tutions, universities, R&D organizations, banks, insurance companies and financial markets.
Now in trade, tourism, high-tech and infrastructure we will be as regional as possible. In agriculture and some of the services we will have to be independent. The essence is to create a sufficiently independent decision¬making capability and a sufficiently independent economy, so when we speak of interdependence, we do not fall under the hegemony of Israel or any other local partner.

Daoud Kuttab: Despite your rosy picture, there have been some setbacks.
Nabil Sha' ath: The basic setback is really the closure, let's face it. Who wants to put $600 million in telecommunications in a country where you are not sure how to get in; or worse, how to get out?

Victor Cygielman: If I understood well, your approach to the economy is one of private enterprise. In this respect you are very close to Mr. Netanyahu who also wants to privatize.
Nabil Sha'ath: I am close to what is happening in the world. He is close too.

Victor Cygielman: Of course. My question is based on Israel's experience. Israel would not have been able to build up any infrastructure that exists today if there had not been, in the beginning, more social and centralized planning in the hands of the state and other national institutions, to facilitate planned agricultural cooperation and industrial development. You had a case very similar to Palestine, where private investors were not willing to come to a small country, where they could earn very little, and everything went through donations and through the state for this build-up of the infrastructure. Aren't you afraid that by going straight to privatization without having any national central planning, you may face very great difficulties?
Nabil Sha'ath: If you look at the plans made by the Palestinians prior to Oslo, they were Israeli in that sense. Professor Yusuf Said estimated that in the first five years we would be getting $17 billion from public aid and much more from private investments: Gulf money pouring in, money from Japan and Germany, similar to what happened to Israel at its inception. Israel received German reparations, which created the basic infrastructure of Israel. If all these resources are available, it is certainly an enticement for the government to do everything. We do not have these resources. We have a promise of $2.4 billion in aid that is creeping so slowly that in the last six months we were only able to get $100 million, and all that went to cure the problems of closure rather than to build anything for the future. We are in a different situation.
You were adopted by a major ally who was willing to protect you and give you support, and you had a very organized world Jewry which was willing to pour money into the state. You lived for a very long time in a world which accepted central planning as a major method and public ownership through public enterprise. We have a totally different situation. Whatever money we can get today from donors has to go to the infrastructure. But it is not enough, and that is why we have to look for private enterprise in the region to help us build the infrastructure. The total collected taxes by the Palestinians - which is, by the way, quite high in comparison to the world - does not cover even our current needs now.
So we cannot move on the Israeli model. The state will have to get funds to build the infrastructure that cannot be privatized, and that is a lot ¬roads, schools, hospitals, sewage systems, water carrier systems - and has to provide a lot of money to support Palestinians who were traumatized during the pre-independence days and during the Intifada, and so on. We have a duty to people who lost everything during the Intifada. In a different world it was different. As a result of our peace process and the Gulf War that preceded it, Palestine today has not yet gotten enough aid to compensate for the lost revenue from the transfer of Palestinians in the Gulf and from the support of the Arab countries to the PLO. The PLO, in certain years, spent $400 million to $500 million a year inside the occupied territories. Kuwaiti Palestinians alone sent horne $280 million a year, up to the year 1990.
You have to remember we are starting in very difficult times, The Palestinian Diaspora is very disorganized. It is not like the Jewish Diaspora at the creation of Israel. It is a much poorer Diaspora. Instead of Israel starting with the Law of Return and allowing any Jew in the world to identify with Israel, we are starting with a law in which Israel prevents any Palestinian from corning back horne to settle. So our Diaspora has a lot of anxieties and very serious concerns about our experiment, whereas the Jewish Diaspora, at the start of the State of Israel, saw itself in total unity with this new experiment.