‘In late June 2002, I received a phone call from Condoleezza Rice, the Bush administration’s national security advisor, who told me that a new finance minister: had been appointed in the Palestinian Authority: Dr. Salam Fayyad, an economist and banker who was well known in Washington as a former senior International Monetary Fund official.
“A talented and decent man,” Rice said. “We must help him renew the transfer of tax funds.” I knew exactly what she was referring to: According to the Oslo Accords, Israel is in charge of collecting tariffs on foreign imports to the Palestinian territories and value added taxes; the funds are transferred to the PA once a month. When the bloody period of the Intifada began, in late 2000, Israel stopped transferring the money.
I relayed Rice’s request to Prime Minister Ariel Sharon, and he said no. Rice asked us to speak to Fayyad in any case. “Explain it to him,” she said. Together with the foreign policy advisor, Danny Ayalon, we met at the American ambassador’s residence. We were introduced to a modest, gentle man with impressive knowledge.
Fayyad explained that he was a “finance minister without a treasury.” The tax funds collected by Israel make up about 70% of his budget, and without them he won’t be able to function. He elaborated on his plans: Reorganizing the security services, improving and developing the economy, fighting corruption and the monopolies, stopping the violence and restoring peace and stability.
“As long as the Israelis have no security, the Palestinians will have no security either,” he said. “And as long as there is no security, the two people will not have a normal life.”
I went back to Sharon. “An impressive man,” I said. “The situation is so bad that we have nothing to lose. We’ll give him a chance. If we find out that the money is finding its way to the wrong hands – we’ll stop.” Sharon nodded. The transfer of funds was resumed.
Since then, in his roles as finance minister and prime minister, Fayyad created a revolution in the Palestinian lifestyle and in Israel-PA relations.’