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Press Release: Statement by IMF Managing Director Rodrigo de Rato Ahead of the London Conference on Supporting the Palestinian National Authority
February 28, 2005
The following statement was issued today by Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), ahead of the March 1 conference of the donor community and international organizations in London to support the efforts of the Palestinian National Authority:
"I very much welcome the initiative taken by the UK government to host an international conference in London to support the Palestinian National Authority in its reform efforts, and would like to thank the UK government for its invitation to the IMF.
"The political transition in the Palestinian National Authority and the election of President Abbas has opened an important opportunity for the Middle East peace process to move forward. The recent steps taken by both the Palestinian National Authority and the Israeli government provide a very encouraging political context for implementing the Roadmap and making progress toward the goal of two states, living in peace, side by side.
"Beside the human tragedy, during the last four years the conflict has had a very negative social and economic impact. The Palestinian economy went through a severe recession and the poverty rate among the Palestinian population increased significantly. Moreover, the fiscal situation of the Palestinian National Authority is precarious and highly dependent on external budget support.
"In spite of this difficult environment, the Palestinian National Authority has continued to implement reforms aimed at institution building with the support of the international community. In particular, important progress has been made in improving transparency and accountability in the public finances, and the Authority has cooperated to enable the IMF to provide regular reports to the donor community on fiscal outturns.1
"We are now at a critical juncture, and the international community should stand ready to fully support Palestinian reforms to strengthen governance and promote economic development. Specifically, the Fund sees a need for substantial external budget support in the short-term to allow the Palestinian National Authority to continue to function and to play its role in the peace process. Underpinning political support for the reform process through external budget support is essential.
"For its part, the IMF stands ready to intensify its support to the Palestinian National Authority in building sound economic and financial institutions and strengthening the Palestinian economy. In particular, the IMF will enhance its technical assistance efforts, including through the Middle East Technical Assistance Center, and will continue its close dialogue with the Palestinian National Authority on macroeconomic and financial policies with a view to stimulating economic growth and reducing poverty. "
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