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Low Returns On 40-Year Investment In Palestinians

european union usa world bank funding palestinian refugees terrorism israelThis year marks the fortieth anniversary of the commencement of European Union contributions to the Palestinians. The EU has been UNRWA's largest donor since 1971 and over the last decade has provided that organisation with almost one billion Euros. Since the establishment of the Palestinian Authority under the Oslo Accords in 1993 it has, in addition, been a major donor to that administration.

The numbers are truly staggering; the EU has pledged to provide 28.4 percent of the total humanitarian aid budget for 2011 – US $60,013,647 – making it the top contributor. That figure does not include donations from individual EU member countries or separate donations to shore up the PA budget.  In 2010, EU contributions to the PA budget as set out in the Palestinian Reform and Development Plan amounted to 199.90 million Euros. Funds donated by member states of the EU amounted to an additional 62.70 million Euros.

When combined  with the additional donations from the World Bank, the United States, Japan and the notably less significant contributions from Arab states, the total amounts of money donated (US $3.96 billion in 2009-2010) mean that the Palestinians are still the highest per capita recipients of aid in the world, even 18 years after the establishment of the Palestinian Authority.  

As Europe sinks ever deeper into financial turmoil itself, taxpayers in EU countries must be asking themselves if the tax money paid both directly to their own governments and indirectly to the EU could not be better employed in reviving their own economies and supporting unemployed and poverty stricken residents of the EU. They may also be wondering if their 40 years of investment in UNRWA and 18 years of investment in the Palestinian Authority have actually brought any benefit to the Palestinian people. After all, throwing money at an investment which yields no returns is not financially savvy.

Not only has EU and other investment in UNRWA not solved the problem of Palestinian refugees, it has actually perpetuated it by forcibly keeping second, third and even fourth generations in permanent statelessness. UNRWA figures show that because Palestinian refugees are the only ones in the world who pass that status down the generations, their number has grown from 711,000 in 1950 to 4.7 million in 2010.  Despite the fact that many of the refugees live in PA controlled areas, they are still forcibly held in refugee status as part of the pan-Arab approach of calculated perpetuation of the problem which has also prevented many Arab countries from granting them citizenship.

As for the Palestinian Authority itself, perhaps the best indication of the lack of efficacy of international donations in helping it become an autonomous, functioning body is the fact that in the year 2000, 10.47 percent of the Palestinian Authority's GNP came from donor aid. By 2007 that percentage had risen to 35.9 percent and in 2010 topped 60 percent. Between 2009 and 2010, despite a 20 percent increase in donor contributions, the Palestinian Authority budget was still in arrears.

One explanation for this is the fact that much of the donor aid is being used to pay PA wages rather than being used for investment in industry, human resource development or infrastructure. Potential private investors find themselves unable to compete with wages in both the bloated public sector and foreign NGOs – the latter also becoming an increasingly popular option for unemployed young European graduates .

And so, despite the fact that the international community has been pouring unprecedented amounts of money into the Palestinian Authority for eighteen years, the ordinary man and woman in the street are actually little better off and often still rely on hand-outs because a viable economy is not being built from the foundations.

For some time, the lone voices of a few European tax-payers have been demanding more accountability on the subject of donations to the Palestinian Authority. Their concerns began during the Arafat years when, between 1994 and 2000, some $900 million 'disappeared' from the PA bank accounts into Arafat's private holdings and 'Presidential Fund', very little of which was ever recovered. Despite clear evidence that at least some of that donated money had been used to finance terrorism, not only did the EU not see fit to suspend aid to the PA, it even increased its contributions during the years of the second Intifada, bizarrely  claiming that its "investigation has found no conclusive evidence of support of armed attacks or unlawful activities financed by the European Commission's contributions to the budget."

If Israelis began then to wonder how many of their countrymen had died as a result a bullet paid for by the EU or a suicide bomber whose family had received payments taken from the donations of European tax-payers and why a Palestinian Authority which had transgressed the Oslo Accords by initiating the second Intifada was being kept afloat and even financially rewarded for doing so, those concerns have not disappeared.

The PA continues to this day to promote incitement in school text books, on government-run television stations and in government-funded mosques. A British organisation called 'The Tax-payers' Alliance' has issued reports on this subject with the aim of securing accountability for the British donations to the PA which are being used to incubate the next generation of suicide bombers and terrorists rather than promoting peace and tolerance in the region.  Whilst Britain itself has passed laws against the glorification of terrorism in the UK, it continues to donate aid to the Palestinian Authority which erects monuments to terrorist 'martyrs' and names public squares, institutions and sports tournaments after suicide bombers.   Recently, the Palestinian Authority also passed legislation which will provide monthly wages for convicted terrorists imprisoned in Israeli jails, including those who hold Israeli citizenship. This policy is, however, not new; the PA has been making such payments since 1994.

It is, therefore, little wonder that EU and other generous donations have done little to promote either peace or prosperity for the Palestinian people or the region as a whole over the last 18 years. And yet, the World Bank, which mentors the Palestinian Authority, continues to adhere to the failed formula of annual international hand-outs, demanding little real accountability on behalf of the tax-payers who ultimately provide the funds.

In its report of April 2011 to the Ad Hoc Liaison Committee, the World Bank states that in the fourth quarter of 2010, unemployment in the PA administered West Bank was 16.9 percent. Statistics for unemployment in EU countries in 2010 reveal that Estonia also had 16.9% unemployment, Spain 20.1 percent, Latvia 18.7 percent and Lithuania 17.8 percent. The same report states that the poverty rate stood at 20 percent in the West Bank and Gaza in 2009. European Union figures for 2008 show that the general level of poverty was 17 percent, with Latvia at 26 percent, Romania 23 percent, Bulgaria 21 percent and Spain, Lithuania and Greece all at 20 percent..

As Spanish citizens take to the streets in protest at the high unemployment rates in their country and many European nations find themselves unable to shake off the economic crisis and forced to implement severe cuts in public spending, it is surely time for European tax-payers to begin to demand real accountability from their governments regarding the millions of tax-Euros invested every year in a Palestinian Authority which not only uses those funds  to promote and perpetuate terror and violence, but continues to take more money as every year goes by from its European neighbour. Forty years of massive levels of EU investment in the Palestinians have not only not resulted in peace, but paradoxically made it increasingly less likely.  Surely Europe could, particularly in the current climate, find more profitable use for its tax-payers' money.

Hadar Sela is a Contributing Writer for The Propagandist

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