Palestinian Authority to Create Holding Company in Overhaul

Answering U.S. demands for reform, Palestinian Finance Minister Salam Fayed said today that a holding company will be formed to consolidate all Palestinian Authority funds and assets under one umbrella.

In an interview, Fayed said Palestinian Authority President Yasser Arafat gave formal approval Wednesday night to the creation of a Palestinian Investment Fund that would be under the finance minister’s direct control.

President Bush has demanded that the Palestinians overhaul their finances, clean up corruption and choose leaders “not compromised by terror” before he would back the eventual creation of a Palestinian state.

Fayed, a former senior World Bank official who was named finance minister in June, said the holding company would ensure transparency and accountability in Palestinian financial dealings.

“If there is an asset of any kind which is either wholly or partially owned by or on behalf of the Palestinian Authority, if it is not in the fund, it will be illegal,” he said in East Jerusalem.

Fayed said a board of trustees would be appointed in a matter of days and the holding company would start operations shortly after that, though he gave no firm date.

Fayed’s announcement came a day after a university researcher announced plans to run against Arafat for the Palestinian leadership in January elections.

Hussam Nazal, a 41-year-old academic with no political experience, is the fourth man to announce plans to challenge Arafat. He told reporters in Gaza City on Wednesday that he would abolish the Palestinian Authority and declare a republic if he is elected.

Asked for his views on suicide bombings, Nazal said, “If those young men lived in a free land, they would not break their mothers’ hearts and cause them pain by leaving.”

Nazal avoided criticizing Arafat, saying he “is like the father of all Palestinians.” However, he said, “the Palestinian Authority does not fulfill my people’s needs.”

Nazal said that if elected, he would dissolve the Palestinian Legislative Council, create a new parliament and appoint a prime minister to run internal affairs while the president would oversee foreign relations.