So Moussa Arafat, the late Yasser's cousin and former head of Gaza Strip security, got his yesterday. He was a symbol of the corrupt and misguided Arafat regime, and this is still how scores ares settled in a lot of places, including Palestine. But now that Israeli settlers have withdrawn from Gaza at their government's behest, how can the region succeed?

Wealthy Palestinian investors are at the ready, so it's not money that's essential, following decades of venal looting of Palestine and Palestinians by Yasser Arafat. Instead, what's needed most is civil governance, stability and the rule of law. That's according to George T. Abed, a UC-Berkely-educated economist who was appointed head of the Palestinian Monetary Authority after retiring from the International Monetary Fund. More from the San Francisco Chronicle's James Sterngold:

"If you poured in a lot of financing at this time, it would not have a big impact. It would not be very effective," said...Abed...."Governance is poor. It would be wasted."...The immediate challenge, according to Abed, is building a modern system to handle the existing capital efficiently, not attracting more -- at least not yet.....

"There are things that require funds, and things that require reform," said Abed. "We can produce high single-digit growth in the first year or two of our administration if we can make those changes in things like the judiciary, education and the government.

"The Israeli withdrawal (from Gaza and the northern West Bank) will have little impact without the economic and other changes," he added.

The Palestinians already receive the highest per-capita donor aid in the world, according to James Prince, a consultant to the Palestinian Investment Fund and co-author of a recent report, "The Economic Road Map: Beyond the Israeli-Palestinian Conflict."

The funds, Prince said, have not done much beyond ensuring a minimum standard of living. But they have left the economy weakened because little of the money has been used to encourage private investment. Job gains have been temporary, he said, and the Palestinian Authority has been left with a huge, cumbersome public sector.

"Many of the donor programs have not only been ineffective, they have harmed the economy," said Prince. "Cash is not the issue. What you need is investor confidence."

I suppose investor confidence might be a bit higher today if Moussa Arafat had faced formal charges, or been quietly and forcibly exiled, rather than assassinated. Except that current Palestinian leader Mahmoud Abbas had retained him as a security advisor.

TECHNORATI TAGS: GAZA ARAFAT INVESTMENT

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Posted by Matt Rosenberg at September 7, 2005 11:34 AM