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PALESTINIAN TERRITORY: Q&A on a new currency

As part of a statehood bid they plan to bring before the U.N. this September, Palestinians are pushing for the creation of a new Palestine Central Bank and the introduction of new currency.

But Jihad Al-Wazir, 48, governor of the Palestinian Monetary Authority, which hopes to soon evolve into the first central bank, says work is needed before reintroducing the Palestinian pound.

“We do not expect that in September we would wake up the next day and find the Palestinian pound all over the place,’’ he told the Los Angeles Times recently. “That’s not going to happen. The way it looks now, people would like it in the first week and enjoy the fact that the pound is back, but would they put it in their pocket and use it the next day? That would be the challenge.”

Q: Are we going to see the emergence of a Palestinian central bank and a currency any time soon?

A: Rather than focus on printing money, the focus is on ensuring that an economic system, economic transmission mechanism and the proper infrastructure for successful currency are in place before we discuss the issue of issuing currency. Everything [is being] done not to focus on simply printing Monopoly money, but to ensure that the macroeconomic framework of the Palestinian economy is conducive to the proper conduct of monetary policy. We are working on introducing the central banking law, which will ensure the independence of the central bank. So once these elements are there, then it becomes possible to conduct proper monetary policy in a small open economy like ours and to be sure that once we issue the currency, we will not become like typical third-world currencies with hyper-inflation and so on.

Q: Does this mean you are going to wait for a state before issuing your own currency?

A: The actual physical printing of currency requires a political decision; even sovereignty is not required. You can have currency without sovereignty. The Europeans, for example, have given up their currency to somebody else. You can dollarize the economy and still have a currency. The issue is what would be the most useful to economic growth and generating jobs, and that is why our focus was on the macroeconomic trends instead of the microeconomics. Of course it is essential to have a sovereign state before issuing your own currency because part of keeping the rate for currency is the ability to have control over borders, which we do not have at this time due to the Israeli occupation. Israel so far controls the borders of the Palestinian territories and imposes restrictions on movement and access. However, there are also ways to work around that. Our job is to be ready.

Q: Charges of corruption have plagued the Palestinian Authority for some time. How would you guarantee that once you start printing money it will not become a tool for corruption?

A: While I believe these claims have been exaggerated, we, nevertheless, have created four independent offices in the PMA in the transformation plan. We have an independent legal office, we have an independent ethics office, we have an independent audit office and we have an ombudsman. We are recognized as one of the most transparent organizations in the region. Central bank independence is critical because if the government has control over it, then it might ask it to print more money to finance its deficit, for example. This is something that is very inflationary. The central bank law will ensure independence, that there will not be fiscal dominance and that we will not be told by anybody about our monetary policy, which will be based on objective criteria and not on political criteria.

Q: Are you personally in favor of having a currency now?

A: There is a lot of emotional contact associated with the resurrection of the Palestinian currency. We are very anxious that if and when a political decision comes to issue a currency, that once that currency is issued, it will have value, that it will not face what many [faced] in the third world countries that issued currencies. Because of the lack of proper infrastructure, lack of proper system, and monitoring frameworks that are essential for a successful currency, they were doomed to failure. Our job and our duty is to ensure that we have the proper frameworks, we have the proper infrastructure, we have the proper laws, that once the decision is taken for a small open economy, our monetary policy will be conducive to growth and will not lead to [a] ... crisis.

Q: Whose face would be on the currency, Yasser Arafat, Mahmoud Abbas, or just a picture of the Dome of the Rock?

A: Once we get ready to issue currency, we will have a national committee to decide these things. We expect choices to vary. Whether to put faces on the currency or something else is something to be debated. But for us the issue of security features of the currency, the more technical aspects of the currency –- denomination, the volume, the pricing -– the technical issues that require a lot of work is more important. Even from a technical point of view, we need at least 18 months to two years to issue the currency, to do the preparations, the awareness campaigns, the printing and all these aspects. We do not expect that in September we would wake up the next day and find the Palestinian pound all over the place. That’s not going to happen.

-- Maher Abukhater in Ramallah, West Bank

Comments () | Archives (12)

The Zionists below are delusional in their understanding of history, economic affairs, and international relations. Please bring on the so-called best and brightest: Goldberg, Pipes, and Dershowitz to twist reality even further. Please help liberate Palestine and America from Zionist domination, exploitation, and repression before it is too late.

Who is going to accept this new currency? Internal only? They may as well save the cost of printing and use Monopoly money. They are in the same postition as Iceland; what is needed is foreign currency reserves, not internal money. The only prupose served by new currency is pride and to sever their economic relationsihp with the Israelis, a self-imposed apartheid. No one in his right mind is going to accept this new currency in payment. Does Andora, Scottland, Greenland, Vatican City, Navaho Nations, East Timor, have their own currency? NO!! Most people want American dollars and not even their own currency!!

Will even the Palestinians trust their government to not inflate their own currency making their savings worthless? In the long run, no, once the first scandle at the Central Bank or devaluation occurs and the Israelis shun the money, that will be the end of that new Palestinian scam.

The West Bank and Jerusalem were part of Jordan between 1948 and June 1967. When the Jordanians stupidly attacked Israel through Jerusalem in 1967, Israel won the West Bank. They found people still living in refugee camps from 1948, without sewage treatment, proper water or electricity. They found Arab families living in what had been Synagogues, and tomb stones from Jewish cemeteries used as paving stones. Most people were poor, though millions of dollars had poured into Jordan for the relief and settlement of refugees from the 1948 war.

Israel had resettled hundreds of thousands of refugees from Muslim countries without the help of UN money, and they had been settled long before the 1967 war. After the war, Israel offered to build new towns to replace the camps, provide proper housing, schools, swage treatment, water, power and roads. As is still the case, the offer was turned down for political reasons.

Palestinians would rather wallow in their victimhood than improve their conditions, and show they are trustworthy neighbors. They hate Israel more than they love Palestine.

The last time there was something called a "Palestine Pound" the writing on the note was in Hebrew.

Wonder if that facts is also a part of the "re-introduction".

@Below Palestinian money with Hebrew on it? They're way too racist for that.

http://elderofziyon.blogspot.com/2011/05/palestine-pound-little-revisionist.html

The Palestine pound: A little revisionist history
From the Los Angeles Times' blog Babylon and Beyond:

As part of a statehood bid they plan to bring before the U.N. this September, Palestinians are pushing for the creation of a new Palestine Central Bank and the introduction of new currency.

But Jihad Al-Wazir, 48, governor of the Palestinian Monetary Authority, which hopes to soon evolve into the first central bank, says work is needed before reintroducing the Palestinian pound.

“We do not expect that in September we would wake up the next day and find the Palestinian pound all over the place,’’ he told the Los Angeles Times recently. “That’s not going to happen. The way it looks now, people would like it in the first week and enjoy the fact that the pound is back, but would they put it in their pocket and use it the next day? That would be the challenge.”

Well, there was indeed currency called the Palestine pound. Here's what it looked like in 1939:

(see photo)

Yikes - look at all that Hebrew! And that Jewish shrine on the front - in Bethlehem!

But wait, there's more! Here's what the Palestine Pound looked like in 1948:

(see photo)

In fact, these were the last Palestine Pound notes made, as Israel migrated to the Lira (Israeli pound). The last place that the Palestine pound was legal tender was in - Israel.

Do you think this is the pound note Al Wazir wants to "re-introduce"?

Al-Wazir, by pretending that he might bring the Palestine pound back, is implying that there was once an entity called "Palestine" that issued its own currency, rather than using British currency (equal to one pound sterling) of Mandate Palestine.

Incidentally, before 1948, the Palestine pound was also legal tender in Transjordan. Perhaps it should be re-introduced there as well.

@joe greetings.
your comment(messiah)this part of your comment is of a christian understanding not from a jewish one as we do not beleive in this savour our messiah is still to come and is not named and could be any-body at any time.
thank you.

Posted by: Joe | May 10, 2011 at 03:10 PM ''Israel, a Jewish nation in the Middle East for 63 years is tangible evidence that Bible prophecy has been and will be fulfilled.''

---Alarming and blinkered comments.

Seems like Al-Wazir knows his economy. When the occupation ceases economy will surely flourish in Palestine. How would this affect the shekel btw?

Israel, a Jewish nation in the Middle East for 63 years is tangible evidence that Bible prophecy has been and will be fulfilled.

As the Jewish people marked the 63rd anniversary of the establishment of a Jewish state called Israel, the world had to stop and take notice that a people dating back some 4000 years ago are alive and doing very well today. Under threat of annihilation of its nation and its people during the entire 63 years, the Jews have survived war after war and are today a major force in the Middle East:. However, in God's plan for the Jewish people there is a future that is brighter than its history of 63 years for the modern day state of Israel as well as its 4000 years of history of the Jewish people.

God's prophetic Word speaks of a people that would be scattered around the world, Deuteronomy 28:63-64. They would be scattered for 2000 years before they would be regathered back to their homeland, the land of their forefathers. God revealed to the ancient Jewish prophet Ezekiel and in fact told him 18 times in Ezekiel 34 that He would find the Jewish people wherever they had been scattered, gather them into their homeland, and take care of them in that land forever. In fact, the coming Messiah, Jesus Christ, will rule over the Jewish people from the land that He has given them and He will do that forever, Daniel 7:13-14.

Israel at 63 is indeed evidence that Bible prophecy will be fulfilled.

How about a state for native Americans? At least they are really from the country they live in!

Its the economy, stupid!! What good is printing paper money and banks for that money without an economy. The Palestinians don't make or grow much of anything, they are to consumate consumers; UN Refugee Welfare Relief Agency supports plus $2 billion annual from the USA and EU, formerly $55-88mm/m from Israel, plus whatever Iran kicks in.

They don't even make kafir's on the WB anymore, they buy cheap printed ones from China. They need to get to work, not print a worthless currency that can only be used internally.


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