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Foreign aid to Palestine exists only to support the "peace process" industry

January 30, 2014 at 2:37 am

Earlier this month, Oxfam published 20 facts about Oslo that painfully illustrate why the “peace talks” between Israel and Palestine have abysmally failed. In the past ten years alone, the number of illegal Israeli settlers has doubled while Israel has constructed a 708 km separation wall around the West Bank and demolished around 15,000 Palestinian structures across the occupied territories.

Nevertheless, on Tuesday an international donors’ conference was held in New York City to coincide with the UN General Assembly’s annual meeting in an attempt to prolong the “peace talks” by raising funds for Palestine’s faltering economy.

In fact, US Secretary of State John Kerry is optimistic that he can raise enough money to create an economic boom in Palestine. According to Al-Monitor, last May Kerry told economic leaders at the World Economic Forum’s Dead Sea meeting that the aim of raising $4 billion from around the world is a real possibility.

$4 billion is indeed a lot of money. But what will this massive influx of aid achieve?

Well, Palestinians are already one of the most aided populations in the world. The US and other allies of Israel annually give hundreds of millions of dollars of development aid to Palestine, hoping to buy Palestinian support for the “peace process”.

Since the signing of the Oslo Accords in 1993 and the establishment of the Palestinian Authority, the US government alone has committed $4 billion in foreign aid to the occupied Palestinian territories. According to the web site Global Humanitarian Assistance, the occupied territories received a total of $6.7 billion in humanitarian aid from foreign donors between 2002 and 2011. The US, the European Union and several European countries are regularly among the top donors.

Much of this aid is conditional. According to a 2013 Congressional Research Service report, in order for US aid to be dispersed to Palestine it must first meet certain requirements. These include: preventing Hamas and other resistance organizations from conducting “terrorist” operations against Israel; fostering stability, prosperity, and self-governance in the West Bank; and promoting the “two-state solution”. Meeting the humanitarian needs of Palestinians is included almost as an afterthought.

Furthermore, the US and its allies frequently withhold their aid to exert political pressure on the Palestinian Authority when its actions upset Israel. For example, last year aid was delayed to punish Palestinian President Mahmoud Abbas for pursuing recognition of Palestinian statehood at the UN. As a result, public workers went for months without wages, whilst the budget deficit ballooned.

However Agence France Presse recently revealed that some donors are becoming increasingly frustrated to find that much of their aid is rebuilding what Israel had previously destroyed, only to be destroyed yet again. A 2012 report from the Displacement Working Group compiled by a group of local and international NGOs and chaired by the UN Office for the Coordination of Humanitarian Affairs found that in 2011 alone, Israel had demolished 62 European-funded structures out of a total of 620 structures destroyed that year, and that 110 additional structures remained at risk.

The problem is acute, and if one looks at the figures it is not difficult to see that the many billions in foreign aid is not empowering Palestinians.

Today, Israeli GDP per capita is $22,128, while Palestinian GDP per capita is a mere $1,679, according to Al-Monitor.

Earlier this year, the World Bank published a grim report on Palestine’s economy, finding that it “has deteriorated since the late 90’s” with “the productivity of the agriculture sector having roughly halved and the manufacturing sector having largely stagnated.” When Israel controls 80 per cent of Palestinian water resources, it is not surprising that Palestinian farmers are struggling to irrigate their crops.

Furthermore, due to Israeli restrictions Palestine’s share of exports has declined to only seven per cent, and most of these goods are sold directly to the occupation.

Today 40 per cent of Palestinians are living in poverty. According to Sharek Youth Forum, around 44 per cent of Palestinian youth are unemployed, even though more than half of them hold university degrees. A UN report found that around 80 per cent of Palestinian children living in East Jerusalem are now wallowing in poverty as a result of the occupation and Jerusalem’s detachment from the Palestinian economy.

So while massive amounts of foreign aid have flooded into Palestine, in reality this aid only exists to support the “peace process” industry, a failed diplomatic effort that prolongs the occupation of Palestine and denies Palestinians of their rights. Indeed, funnelling foreign aid only helps outsource the Israeli occupation to the Palestinian Authority, while maintaining this corrupt and non-democratic institution.

The Palestinian Authority was established after the Oslo Accords in order “to provide short-term, limited autonomy until a peace agreement” was reached. However as Israeli historian Gershom Gorenberg points out in the American Prospect magazine, today it “has become the lasting means by which Israel outsources its rule over Palestinians in [the] occupied territories. Donor countries foot the budget.”

This sentiment is echoed by American political scientist Ian Lustick, who recently argued in the New York Times that the Palestinian Authority only supports the “peace talks” because the accompanying economic aid subsidizes “the lifestyles of its leaders, the jobs of tens of thousands of soldiers, spies, police officers and civil servants,” and helps to secure “the authority’s prominence in a Palestinian society that views it as corrupt and incompetent.”

This year the Palestinian Authority allocated more than 53 per cent of its annual budget to salaries for public workers, including the security services. This means that more than half of the budget is being used to police the status quo.

The International Monetary Fund (IMF) also recently criticised the Palestinian Authority’s public spending as too “heavily tilted towards wages, pensions, and transfers, rather than much-needed public investment.” Furthermore, much of the “donor aid targeted for building productive capacity is instead used to finance a budget deficit that last year reached $1.7 billion (17 per cent of GDP) while bills remained unpaid.” The IMF concludes that, “Such a financing model is harmful for the economy, unsatisfactory for donors, and not a viable way to manage public resources.”

And yet the international community’s response is to deliver even more aid.

But while the Palestinian Authority has internalized the occupation, Israel has been busy privatising it. Neve Gordon and Erez Tzfadia argue in the Guardian that checkpoints throughout the West Bank have been handed over to private security companies. At the same time, illegal settlers have been forming their own private militias to terrorise Palestinians living in the neighbouring villages.

In an article for Al-Jazeera, Charlotte Silver also reminds us how the Israeli government has been using private firms to help Judaise the Negev. Back in 2006, Israel allocated $4 billion to a private Israeli development group in partnership with US consulting firm McKinsey & Co. for a project that researcher Rebecca Manski explains was dedicated to “the removal of unrecognised Bedouin villages on the one hand, and incorporation and construction of new Jewish towns on the other.”

This helps to explain why proponents of Israel’s current plans to cleanse Bedouin from their lands are now employing the language of “development”, as illustrated by former Knesset Member Ze’ev Begin’s recommendations for the implementation of the contentious “Prawer Plan”. The word development is mentioned 17 times in his report, and he even suggests that moving Israeli occupation forces into the region will bring “development momentum” to the Northern Negev.

It should come as no surprise that the new aid package Secretary of State Kerry, along with Quartet envoy Tony Blair, is trying to raise funds for is being devised with the help of the very same firm, McKinsey & Co.

And it is not incidental that consultants who have worked with McKinsey & Co. include members of the Israeli government, such as Knesset Member Einat Wilf and Uri Goldberg, who worked in the office of Israeli President Shimon Peres.

All of this just illustrates that whatever amount of funds the donors’ conference raised in New York City, we can rest assured that the money is not going to benefit those Palestinians who struggle for freedom, justice, liberation and ultimately, peace.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.