New book shows how aid to PA ended up in Israel’s pockets

About a decade ago, a record was broken in Palestine. Responding to the outbreak of a new intifada, outside governments dramatically increased their financial contributions to the West Bank and Gaza. By 2002, the occupied Palestinian territories had become the largest recipients of development and humanitarian aid on a sustained per capita basis since the Second World War.

Are Palestinians grateful at being given as much as $1 billion annually in recent times? From conversations I had in Jerusalem and Ramallah earlier this year, the answer would appear to be no. “We don’t want your money; we want your solidarity,” one woman told me. Others spoke of how foreign aid was “bandaging” the occupation, easing some of its symptoms but leaving the core problems to fester.

In The Political Economy of Aid in Palestine, Sahar Taghdisi-Rad illustrates how aid earmarked for the oppressed often ends up in the oppressor’s pockets. “When aid is given in the context of conflict and violence, it becomes part of that context; hence its effect on conflict does not remain neutral, despite what most donors would like to claim,” she writes (87).

Using a phrase coined by the Israeli journalist Meron Benvenisti, Taghdisi-Rad argues that Israel imposes a “deluxe occupation,” whereby it exerts total military domination over the Palestinians under its yoke without taking any responsibility for meeting their basic needs (158).

Rather than holding Israel to account for its most egregious abuses of human rights and international law, donors have generally been willing to accommodate those abuses. By paying for repairs to Palestinian infrastructure damaged by Israel, donors have not only helped prolong this “deluxe occupation,” they have reduced any sense of urgency for a political resolution of the conflict, she argues (17).

Israel benefits from international aid to Palestinians

Taghdisi-Rad examines how far from behaving in an impartial manner, donors are tailoring their aid programs to benefit Israel. She devotes particular attention to analyzing the Palestinian Reform and Development Plan Trust Fund (PRDP - TF), set up by the World Bank (187-192). Promised $7.8 billion mainly by Western governments for the 2008-10 period, it represented a “major political shift” from previous aid blueprints for the Palestinian Authority.

Whereas donors had until then nominally accepted that Israel was an occupying power and that Palestinians should be encouraged to seek independence from it, this plan advocated deeper “cooperation” between Israel and the Palestinian Authority, as well as sharp reductions in public expenditure. By stipulating that the PA cut back on its assistance to ordinary Palestinians who had trouble paying their energy bills, the authority was pressurized into buying power in bulk from the Israel Electricity Company in order to avoid service disruptions.

This fits a wider pattern, under which aid supposed to stimulate Palestinian development instead finds its way to Israeli enterprises. The United Nations has calculated that 45 percent of international aid to Palestine ultimately supports the Israeli economy.

An economist by training, Taghdisi-Rad worked for the United Nations Conference on Trade and Development (UNCTAD) until a few months ago. Her former employers do not escape criticism. UNCTAD used to take a bold stance in the 1990s, when it argued that the main requirement for economic progress in the West Bank and Gaza Strip was an end to the Israeli occupation. Now, however, it “seems also to follow other donors’ less ambitious approaches to Palestinian development,” she writes (129).

For the most part, those approaches are characterized by an ideological blindness that can defy common sense. Donors have been so gung-ho in promoting trade liberalization and the private sector that they have ignored obvious obstacles. The “quick impact projects” championed by former British prime minister and current Quartet envoy Tony Blair are particularly ridiculed.

Unveiled in 2007, one such project undertook to provide marketing advice to Palestinian exporters. Predictably, such advice proved useless, given that Blair was not prepared to use his platform as an international “peace” envoy (as he is habitually described in British newspapers) to demand that Israel lift the restrictions which prevented Palestinian firms from exporting goods in the first place (170).

US aid to Israel

International aid to Palestine is usually categorized as “development” or “humanitarian” in nature. It is eclipsed in volume by US financial assistance to Israel of about $3 billion per year; such aid is released even though Israel is internationally recognized as a developed economy.

Taghdisi-Rad complains that the US’s funds “allow Israel to carry out its illegal settlement and military activities” and is not conditional on respect for Palestinian rights. By contrast, the US and the EU told a Palestinian administration incorporating Hamas in 2006 that it could only receive foreign aid if Hamas “recognized” Israel. Taghdisi-Rad suggests that the West’s position was tantamount to instructing Hamas to accept Israel’s system of apartheid.

“Unlike any other country in the world, Israel, based on Zionist ideology, does not define itself as a state of its residents, or even a state of its citizens, rather, as a state for Jews only,” she writes. “Recognizing a state which treats all non-Jews as second-class citizens is not even legal under international law” (173).

This is not an easy book to digest. Although its conclusions are cogent, most of the writing suffers from a clunky style. The high number of acronyms clogging its pages sometimes left me feeling like I was drowning in an alphabet soup. Read patiently, however, it offers a hugely informative guide to topics that are of central importance to the future of Palestine but usually neglected in mainstream media coverage.

The book was completed before the assessment published by the World Bank in April that the PA was “well-positioned for the establishment of a state at any time in the near future” (“Building the Palestinian State: Sustaining Growth, Institutions, and Service Delivery” [PDF]).

Nonetheless, it demolishes the fantasy that Palestine will soon be magically transformed into a viable nation. “It is interesting to note that from its establishment to this day, being one of the most financially-supported governments in this world, the PA has yet to contribute its own resources to public investment and the provision of public services,” Taghdisi-Rad writes (181).

That observation — and many others — makes this work both perceptive and pertinent.

David Cronin’s book Europe’s Alliance With Israel: Aiding the Occupation is published by Pluto Press.