Following are translated excerpts from an interview conducted by Rima Merriman with Maher Al Masri, minister of the Palestinian National Economy, a graduate of the American University of Beirut, where he received a masters in economics, living in Nablus:

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The Israeli targeted and systematic destruction of infrastructure, as well as of the industrial and agricultural sectors and tourism in Palestine have, to put it mildly, adversely affected our economy.

Closures have meant the restriction of movement of both people and goods within the West Bank and between Gaza and the West Bank. Tens of thousands of Palestinians have lost their jobs. The Palestinian market also lost much of its buying power and exports are down because of external closures. The cost of transportation has risen so our exports are no longer competitive in some Arab and European markets which our goods used to reach.

The Israeli destruction of agricultural lands and the uprooting of fruit-bearing trees decimated the agricultural sector. Today, the average individual's income is half of what it was in 1999. Poverty is over 60 per cent compared to 22 per cent in 1999-2000. It will not be easy to recover from these setbacks.

The Palestinian economy is highly dependent on the private sector, which is one of the more vigorous in the region. It had no national structure to nurture or develop it between the start of the occupation in 1967 and 1994, when the PNA came on the scene. As a result, the private sector had to learn how to survive and compete under terrible obstacles imposed by Israel. During the first Intifada, towards the end of 1987, the private sector faced major hurdles. For three consecutive years, the comprehensive curfews that the occupied Palestinian territories endured totalled over three months per year. Nevertheless, the Palestinian private sector was able to weather these conditions and perform, sometimes incredibly so. The current crisis is much more difficult.

The ministry's responsibility is to serve the private sector and be responsible for its performance. To that end, we have a joint board with the private sector, which meets once a month. Even under these terrible conditions, we have been able to attract some rehabilitative, training and financing opportunities for the private sector. We have partnered with the private sector in organising exhibitions of Palestinian goods in Arab and international markets and opened a trade centre in Amman, which is being financed by the Islamic Development Bank. Other projects, also financed by the bank, involve bringing some industries up to date and encouraging local Palestinian production of such things as school uniforms and milk subsidy for school children.

In spite of the presence of Israeli soldiers in every one of our cities and towns, we are still hard at work building our institutions and rebuilding our governmental structures.

All the Palestinian ministries are in the process of restructuring. In the Ministry of Economics, we are restructuring in a non-centralised way. We now have offices in all municipalities, including Gaza, all electronically connected, so that, for example, any citizen could register his or her company through the electronic network. This system also applies to trade and industrial permits, and we hope to extend it soon to apply to import/export needs.

The ministry has a team in place that examines, approves and implements project proposals. Besieged as we are by the Israelis, we haven't been sitting idle. We are busy here. In this ministry, we work every day until 8 in the evening. Our network, which is financed by GTZ and USAID, who are also providing expert help, will be completed by the end of 2005.

One characteristic of the Palestinian economy is that it has been tied to the Israeli economy since 1967. The income of the average Israeli is ten times higher than the income of the average Palestinian, but the cost of living is calibrated to the former, because most of the goods Palestinians consume come from Israel. This is a huge burden on Palestinians. We have established laws that would encourage direct imports from the outside in order to bypass the Israeli middleman. But the Israelis have made it difficult for us to import from the outside these past four years.

We are also trying to fight the dumping of cheap goods from the Far East through Israel into our markets and have made great strides in setting standards to protect the consumer. We export to Israel, but at a big trade deficit. What would be best is if we could export to Arab countries instead. Unfortunately, most Arab countries have yet to enact the 2001 Arab Summit resolution ending trade barriers and exempting Palestinian products from tariffs. Saudi Arabia, Jordan, the UAE, Bahrain, Tunisia and Yemen have opened their markets to Palestinian products. We have a credible mechanism by which we verify the origin of our exported goods, so that any Arab country could verify where the goods are coming from.

We ask Arab countries to participate in the development and support of the Palestinian economy, in the building of infrastructure, and in the rehabilitation of what Israel has destroyed. Our goods can and do reach some Arab countries (even if in a limited way) under the current difficult situation. Arab support is an essential factor in our ability to resist the occupation.

We have a lot to offer. For example, our stone and marble are the finest in the world and we have factories that are equal in technological sophistication to those in Spain or Greece. But if Israel keeps its control of borders and access routes in Gaza and in the West Bank, then talk of economic development will be nothing more than talk. Israel's relinquishing such control is a fundamental requirement for both political stability and economic development.

In the meantime, we are hard at work on a comprehensive economic plan.

This article was published in the Thursday, November 25, 2004 edition of the Jordan Times. It is used here with permission.