Monday, February 12, 2007

ANALYSIS: Mecca Agreement refreshes hope for Palestinian Securities Exchange

Mecca Agreement Refreshes Palestine Securities Exchange

By Mohammed Mar'i*

(Ramallah, Occupied Palestine)-- As a first sign of economic improvement following the Mecca Agreement between Fatah and Hamas, the Palestine Securities Exchange (PSE) "Al-Quds Index" increased by ( 4.26%) compared with the last trading session.

Dr. Hassan Abu Libdeh , PSE Chairman, said in a special interview that " the results of today's session is due to the fact that the investors were encouraged by the Mecca Agreement so they returned back to invest in shares". "As we emphasized all the time, the PSE in Palestine is highly influenced by the current political situations. The evaluation of listed companies in PSE was usually beyond the real value due to political developments. Even with the start of Mecca meeting last week, "Al Quds Index" closed at an increasing by ( 2.61%) compared with the last trade session" he added.

Abu Libdeh hoped that the Mecca Agreement between the Palestinian rivals is a beginning to freeze the international political and financial siege imposed on the Hamas-led government. "An agreement with this size at the place where it was held must be internationally endorsed. We hope that the Kingdom of Saudi Arabia play the needed role to insure it (endorsement) especially with the United States", he said. "This international endorsement will lead to drop economic siege and resumption of financial aid and accordingly the Palestinian Authority will be devoted to the national cause and to administer the economic affair. This will enable the public sector establishments from extending their services to the public", Abu Libdeh added.

He highly evaluated the generous donation of Saudi Arabia to the Palestinian people saying that "the initiative reveal genuine Arab morals of the Custodian of the Two Holy Mosques and the Saudi leadership. It (the financial donation) has a strategic influence on the Palestinian Authority. It will enable the Authority from extending its services to the Palestinian public; activate the stalled economic situation, to reduce the unemployment within the Palestinian society, to implement frozen infrastructure projects after the formation of Hamas-led government".

As for the ability of Saudi Arabia to transfer the donation to the new Palestinian government which is a step in breaking the financial siege Abu Libdeh said that" I think that Kingdom which succeeded in ending the Palestinian crisis has the considerable regional and international role to insure international acceptance of the financial transfer mechanism". "We notice good signs on the Mecca Agreement from the European Union. Although the European Union reaffirmed the Quartet preconditions, but I think there is a possibility to renew the financial aid. What is more important more than the donations is the Palestinian welcome of the Mecca Agreement which means that the Palestinian factions understood the danger of internal strife", he added.

Abu Libdeh declined the influence of financial grants that the Palestinian civil servants get from the European Union and the down payments from the President's office or the Government on the economic situation. He considered that there must be "an official treatment to the financial crisis which began since a year". He said that the importance of Mecca Agreement is not that it will solve the issue of Palestinian civil servants salaries but it will enable the Palestinian Authority from extending its services to the public with responsibility and respect. "It isn't enough to ensure the salaries. There are frozen infrastructure projects. The Palestinian Ministries can't extend basic services to the Palestinian public which badly affected the health, education, and social services", he clarified.

He considers that the implementation of Mecca Agreement depends on the behavior of Palestinian factions which is the only factor to torpedo any procedures. "We are now in a critical stage and we have the Mecca Agreement as a base to go back to the political track. If the Palestinian factions abide by the Agreement we can success, otherwise it a matter of time to return to the field language (internal strife)" Abu Libdeh estimated.

*Mohammed Mar'i is a freelance Palestinian journalist based in Ramallah, Occupied Palestine. He can be reached at