Givers and Takers: The case of international aid to Palestine

The wall in Qalqiliya cuts Palestinians off from agricultural land (Maureen Clare Murphy)

At the Palestine roundtable of the Voices of the Poor conference, the Spanish journalist, Teresa Aranguren, and author of Palestina, el hilo de la memoria made an insightful remark. Palestine, she said, was not a poor country. To clarify her point, she compared British Mandate Palestine to Spain during the time of their civil war (1936-39). The Palestinians, she repeated, were not a poor people. Only with the massive dispossession and displacement which resulted from the establishment of Israel did the Arab population become either second-class citizens within Israel or refugees in the Palestinian Diaspora.

The greatest cause of contemporary Palestinian poverty is, without a doubt, the overwhelming Israeli occupation. International aid has played a pivotal role in attempting to alleviate this recent phenomenon, but many questions persist. Who gives such large amounts of financial assistance to the occupied Palestinian territories (OPT) and who takes from the Palestinian people? What are the donors’ motivations for these monetary injections and how effective has the implementation of these funds been? And why does foreign aid continue to increase while the Palestinian economy continues to stagnate?

Aid, Diplomacy and Facts on the Ground; the Case of Palestine provides the most recent analysis and makes the most honest attempt to clarify the complexities of donor aid to Palestine. The collection of essays by Israeli, Palestinian and international specialists departs from the fact that between 1993 and 2003 the West Bank and Gaza Strip Palestinians received the highest amount of international aid of any recipient in the world since the Second World War. To explain why most Palestinians of the OPT remain below the poverty level, the essays present different views on the corruption of the Palestinian political system, the controversial use of NGOs in representing Palestinian society, and the Israeli avoidance of paying for the military occupation of the West Bank (including East Jerusalem) and the Gaza Strip. The contributors all conclude, however, that until Israel puts an end or is made to end its illegal military occupation of Palestine, the stagnation of Palestinian economy will continue unabated.

From 1993 to 2003, the OPT received $6 billion in international aid. Half of these funds were disbursed after Sharon’s provocative visit to the Haram Al-Sharif/Temple Mount sparked the second intifada at the end of September 2000. In 2003, the United States gave $224 million; the European Commission $187 million; the League of Arab States $124 million; and Spain, the 10th largest donor, disbursed $17 million. Due to the destructive Israeli policy of massive retaliation, a majority of these funds have now been diverted from development projects to emergency relief. Aid, Diplomacy and Facts on the Ground claims the ratio has changed from 7:1 before the second intifada to 1:5 by 2002.

As Isabel Casado Lopez from the Agenica Española de Cooperación Internacional, a section of the Spanish Ministry of Foreign Affairs, adroitly mentioned at the Palestine roundtable, this massive amount of money was spent mostly on infrastructure reconstruction projects, including roads, schools, houses and hospitals, which were destroyed by Israel. Spain, she also mentioned, helped finance the reconstruction of the Gaza International Airport in Rafah. The runway of the airport was bulldozed by Israel during the second intifada. In theory, such destructive acts should obviously decrease incentives for donor assistance. In Aid, Diplomacy and Facts on the Ground, most contributors agree with Scott Lasensky that with the failure of Oslo and the eruption of the second intifada, “checkbook diplomacy does not work.” Nonetheless, international aid continues at an unprecedented rate.

After the 2005 annual G8 meeting took place at Gleneagles, Scotland, British Prime Minister Tony Blair announced on July 11 that besides relieving poverty and sickness in the African continent, the “G8 also gave its strong support to the Middle East Peace Process and pledged its support for a package of assistance of up to $3 billion a year for Palestine.” The details of the G8 summit grant $3 billion a year, over the next three years; a total of $9 billion. Due to the rapid pace at which events evolve, there is no propitious moment to present new facts about the Israeli-Palestinian conflict. However, the launching of Aid, Diplomacy and Facts on the Grounds took place less than a week after the G8 meeting and provided direct recommendations on how to successfully implement the proclaimed international aid to Palestine.

At the launching of the book on July 12, 2005 at the American Colony Hotel in East Jerusalem, talk of poverty, as usual, was on the menu of the day for the World Bank moderator. The participants comprised of Michael Keating (UNSCO), Larry Garber (New Israel Fund), David Shearer (OCHA), Anne Le More (Oxford University) and senior advisor to the former Israeli Prime Minister Ehud Barak Yossi Alpher. All agreed that with the continuation of the Israeli occupation and the consistent Palestinian corruption, it was not difficult to suspect where most of the money would be spent: either on other reconstruction projects or funneled into politicians’ pockets. The tone was not optimistic as the participants reasserted what they had claimed in their essays: unless the status quo is drastically altered, international aid will continue to perpetuate Palestinian poverty in the OPT.

One of the most important facts mentioned by the participants was that donors have not used aid to pressure Israel to end its occupation of Palestinian territory. They reiterated Mary Anderson’s assertion that international aid to the Palestinians “plays into and reinforces the Israeli occupation of Palestine.” All participants claimed that ending the occupation is the most important step in changing the status quo. Only Alpher claimed that this tactic would backfire. Alpher maintained, “without international aid, the Palestinian economic situation would get worse, not better.” He alluded to Israel’s sacred security when he elaborated that in the scenario of reduced donor assistance “Palestinians would not stop attacking Israelis, and Israel would not stop retaliating.” Alpher did not mention that the Israeli occupation was the primary reason for Palestinian attacks. However, he also realizes that international aid is “keeping the present generation of Palestinians alive rather than developing Palestine for future generations and sustaining the peace process.”

Aid, Diplomacy and Facts on the Ground examines the realities of the military Israeli occupation and the economic Palestinian dependence on Palestinian livelihood. Most of the essays take the 1993 Oslo Accords as a point of departure. Oslo was the historic “watershed” and financial “turning point” for foreign aid in the OPT. Believing sincerely or not that permanent peace was close at hand, international donors turned their diplomatic influence and opened their checkbooks to the newly founded Palestinian National Authority (PA) and the Palestinian Legislative Council (PLC); both created as a result of Oslo, respectively in 1994 and 1996. Since 1949, the United Nations Relief and Works Agency for Palestinian Refugees in the Near East (UNRWA) had received continual international funding to relieve the plight of Palestinian refugees within the OPT and in the neighboring Arab “host” countries (Lebanon, Syria, and Jordan). Oslo not only depleted the financial support sent to the humanitarian aid organization, but even worse, it decreased the general socio-economic livelihood of the Palestinians. Oslo was doomed from the beginning due to flagrant imbalances of political representation and territorial control.

Though UNRWA was the primary institutional loser, the Palestinian refugees lost much more. They suddenly found themselves further marginalized from the political processes determining their fate and increasingly deprived of the possibility of ever returning to what remains of Palestine. The case becomes more complicated where Palestinians are refugees within the OPT. In the Gaza Strip, home to 1.3 million Palestinian refugees, mostly from the wars of 1948 and 1967, the newest refugees are those displaced (some for a second or third time) as a result of Israeli reprisals during the second intifada (popular uprising). Providing financial support for the 1996 and 2005 Palestinian elections, in which Diaspora Palestinians were not permitted to cast their vote, meant international money largely contributed to the “de-democratization of civil society in the West Bank and Gaza instead of increasing the capacity of civil society for democratization.” This process of “de-democratization” of Palestinian politics was further exacerbated by the Israeli occupation when presidential candidates Mustafa Barghouti were subjected to Israeli movement restrictions and harassment while campaigning in 2005.

The use of NGOs in maintaining Palestinian livelihood also remains a central point of contention. As Karma Nabulsi claims, NGOs receive enough funding to give them a level of legitimacy that permits them “to address international actors and diplomats … on behalf of Palestinian society.” Though motivated by what the German playwright Bertolt Brecht called the “terrible temptation of good,” the role of NGOs has become as highly politicized as other facets of the Israeli-Palestinian conflict. Competition amongst NGOs for foreign funding and connection-corruption when distributing the funds is becoming the name of the game. However, the more worrying side of donor-driven NGO activities in the OPT is that they are “acting” for the Palestinians, instead of permitting Palestinian society to take its own initiative.

Where UNRWA lost financially and the Palestinian refugees lost their representation, the PA won monetarily and politically. But the PA has failed repeatedly, on any success barometer, to meet the needs of the Palestinian people. One of the “Hard Lessons from Oslo,” as Nigel Roberts asserts, was that the systematic injections of “walking around money” for Arafat, not only remained in place, but increased with the PA. International aid not only relieves the Israeli “de-development” of the Palestinian economy but also buttresses Palestinian political corruption.

“Donor Aid to Palestine” by Rex Brynen provides the most insightful analysis of the “complex system of financial diversion that arose during the Oslo period.” The International Monetary Fund (IMF) calculated that since 1993 Arafat had diverted almost $900 million. The former Palestinian leader repeatedly blamed the lack of transparency and the funneling of foreign funds on the prolonged Israeli occupation. Much to the detriment of the Palestinian people, Arafat’s corrupt legacy remains intact with the current PA. However, Brynen also wonders why the PA should be “transparent with regard to the covert funding of Fateh” when “Israel does not declare the size and budget of its nuclear programme.” The PA is caught in a veritable Catch-22: how can be asked to act like a state when they still do not have a state?

Anne Le More analyzes the systematic Israeli use of “closures” in the OPT and concludes that the “process of ‘bantustanization’ whereby the West Bank (including East Jerusalem) and the Gaza Strip become a collection of isolated areas and enclaves separated from one another stands in sharp contradiction to the sine que non of territorial contiguity as the basis for an economically and politically viable Palestinian state.” The territorial fragmentation and the Israeli “matrix of control” - Jewish bypass roads, military checkpoints, prolonged curfews, and sudden sieges - presents a further catch with respect to the mobility of Palestinians both inside and outside of Israel/Palestine: the “Israeli Civilian Administration” - to not say military occupation - does not allow Palestinians to cross a border or pass a checkpoint without a certain permit. Yet, the Palestinians are consistently denied permits. Indeed, the system of acquiring a permit is so incredibly complex that Kafka’s frustrated attempts to enter the forbidden castle pale in comparison.

The Gaza Strip is easily the most difficult Palestinian territory to enter and exit. Sara Roy, hailed as the “world’s leading authority on the Gaza Strip” by Norman G. Finkelstein, ends the series of essays with the “possibilities and constraints” of “developing the Gaza Strip in the event of Israel’s disengagement”. Author of the definite work, The Gaza Strip; The Political Economy of De-development, Roy reaffirms that “unilateral withdrawal will, more likely than not, bring Palestinians greater repression, isolation and ghettoization through heightened land confiscations and annexations in the West Bank, continued settlement expansion and territorial cantonization.”

In the months after the launching of Aid, Diplomacy and Facts on the Ground, the Israeli Defense Forces (IDF) unilaterally evacuated the Jewish settlements and withdrew militarily from the Gaza Strip. However, 38 years of occupation did not end with the much publicized “disengagement”: Israel still maintains land, air and sea control of the Gaza Strip. This provides for an unhappy picture of economic stagnation and existential despair. The annual G8 summit on Sea Island, United States, on June 10, 2004, concluded that the “G8 welcomes the prospect of Israeli withdrawal from all Gaza settlements and from parts of the West Bank.” The Israeli disengagement was lauded by international leaders as a “courageous” move towards peace in the Middle East.

However, Sara Roy’s prediction about the Israeli tactics proved correct. During the Israeli retreat from the Gaza Strip, Israel seized more Palestinian territory in the West Bank by incorporating the large Jewish settlements of Ma’ale Adumim and Har Homa within the separation wall. This implies not only the acquisition of territory, deemed illegal under international law, but also the inclusion of all of East Jerusalem within Israel. The West Bank is now effectively divided into two parts, each consisting of fragmented pockets of Palestinian autonomy. The immense increase of international aid will remain a lifeline to the Palestinian people and will assist in the further fragmentation of the Palestinian territory. Such a perpetuation of the current status quo does not paint a bright picture of Palestinian sovereignty. Only with a strict reassessment of why and how international aid is implemented, as Aid, Diplomacy and Facts on the Ground recommends, will Palestinians begin to emerge from poverty.

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    Stuart Reigeluth is a free-lance writer and Desk Officer for the Africa and Middle East Program at the Toledo International Centre for Peace (TICpax) in Madrid, Spain. His ideas do not necessarily reflect those of the TICpax