G8 Funds the Palestinians

July 11, 2005

In the first few days of July 2005, Britain witnessed three separate but linked events.

First, after international media pressure and music concerts, the G8 has agreed to significantly more aid to Africa, primarily in the form of debt relief. Second, murderous bombs rocked the British capitol, apparently executed by so-called Islamic fundamentalists, killing and maiming hundreds.

And, the G8 endorsed another $3 billion in fresh aid to the Palestinians, to be primarily directed towards infrastructure projects. Evidently, this decision was based on the advice of Mr James Wolfensohn, the Quartet's Special Envoy for Disengagement, and former head of the World Bank.

The G8 includes 4 of the EU's leading countries, as well as Russia, Canada, the USA and Japan. A report in Al-Jazeera emphasized the G8 agreement with the World Bank call on Israel to continue easing restrictions on movement in Palestinian territories. It can be assumed that the Israeli initiative to disengage from Gaza and the removal of dozens of roadblocks since March 2005 are part of this scheme.

Clearly, the aid is designed to increase the standard of living with the additional hope that groups like Hamas and the Al-Aksa Martyrs Brigades of the PA's Fatah will no longer be able to seek destitute recruits so readily. It is hoped that the "natural supply" of terrorists will start to dry up.

However, few commentators have noted the difference in approaches nor speculated about projected outcomes. The African deal concentrates on elimination of debt, with no immediate impact on cash - or poverty. The Palestinians have little debt, having been given around $10 billion in cash since 1993. As it has been near impossible to trace its final destinations, the real impact on poverty in this case is also unclear.

So the question is, what will the Palestinians do with this massive aid package? Certainly, the inhabitants of Gaza and the West Bank deserve a better infrastructure. Since 1993, many have continued to live in camps - despite the Palestinian Authority's opportunity to re-house them.

What is not clear is where the money will come from, and what controls will be placed on its expenditure. Possibly, inline with parts of the African model, specific elements of Palestinian society should be asked to contribute to their own welfare. For example, when Chairman Arafat died, Al Jazeera noted that his own private fortune was estimated at more than $4 billion. Other reports have suggested that large chunks of previous aid packages have found their way into other private pockets.

The following two articles detail the type of aid and conditions determined by the G8 towards the Palestinians.

Show of unity tops G8's thorny agenda


Murdo MacLeod

TONY Blair had decided that the first major session at the G8 conference in Gleneagles would be on the most intractable of subjects, climate change. At 9am on Thursday, he was taking up the challenge of finding some common ground between his allies in the United States and his EU neighbours.

At the same time, carnage was being unleashed in London. Blair had to return to his capital, albeit temporarily, and not without the determination of the world's leaders that they would not be cowed by terrorists. The summit would go on.

It was clear to all the participants that they had to appear united. In a summit which had been forecast to be confrontational, no-one could now appear to be the bad guy. No-one would allow themselves to be seen to humiliate Blair in his own country in the wake of such a tragedy. But a failure to make some sort of agreement would be seen as a victory for terrorism.

The so-called sherpas - government fixers who pave the way for agreement when their leaders gather - went into overdrive, using the myriad rooms of the Gleneagles Hotel to reconstitute disagreements into compromises. It was they who were tasked with making sure the G8 leaders left Scotland with a united voice.

The moral pressure on the rest of the Group of Eight to agree a deal for aid to Africa was therefore immense. Despite doubts on the part of the Americans and Germans, the G8 agreed that aid to Africa should be increased by £30bn by 2010.

But on two of the most contentious issues - the scrapping of agricultural subsidies and climate change - the world's most powerful leaders kicked the subjects into the long grass, to be reviewed later this year.

Blair managed to hit a moral blow against the terrorists by supporting the Palestinians, one of the causes supposedly dearest to Islamist terror groups, with cash to help them rebuild - a rebuke to the brutal tactics of al-Qaeda.

Blair secured the deal on extra cash aid to Africa in the teeth of opposition from the United States and the Germans, two countries which have rarely seen eye to eye in recent years. The US Congress is deeply antagonistic towards giving cash to foreign countries, and linking the deal to Blair will be an important factor enabling President Bush to get the measure voted through by the Congress.

In addition, Gerhard Schröder's ailing German government - which is heading for a crushing defeat in an election expected to be held this September - was sceptical about increasing aid, a move it sees as throwing good money at corrupt and wasteful African governments.

In the event, neither leader could be seen to be holding out against Blair, especially not while accepting Britain's hospitality in one of its most luxurious hotels. Both the US and Germany have been engulfed in a wave of sympathy for the UK as a result of the bombings. Joining in with a pledge to increase aid was seen as the least they could do in order to boost the British Premier.

The trade part of the equation was more problematic, and involved Blair juggling an "undynamic trio" wedded to agricultural subsidies, which are seen as ruinous for the economies of poorer countries. Japan, the US, and the European Union all protect their farmers through tariffs on agricultural products from the developing world. Foodstuffs such as rice, corn, and grain would be vastly cheaper for EU, American, and Japanese consumers if they were imported from Africa. In addition, all three force the developing world to import vast quantities of produce, which is subsidised so that it can be sold at much below the cost of production, in poorer countries, thus driving local farmers out of business.

All the parties said that they were willing to scrap their subsidies, but insisted that they would not do so unless the other sides did so too. It is hoped that a date will be set at the World Trade Organisation meeting of trade ministers, scheduled to take place in Hong Kong this November. Whenever further progress is made, bitter divisions on the way forward have not been exposed at a time when the G8 leaders wanted to show a united front.

African reaction to the aid and trade package was mixed. While the extra aid has been warmly welcomed, the fact that no firm date has been set for the end of farm subsidies has led to criticism that the West is adopting a "Lord make me unsubsidised, but not yet" approach, and is merely stringing the developing world along.

Olusegun Obasanjo, the Nigerian president and chairman of the African Union, said: "I see there are encouraging signs that the continent's problems are going to be addressed realistically and acceptably by the G8 and Prime Minister Tony Blair."

Augustin Fosu, the Addis Ababa-based director of economic and social policy at the United Nations Economic Commission for Africa, said: "This is a positive step in the right direction and one should not sneer. But it is only a start."

But the Labour MP and member of the Commons International Development Committee, John Battle, said: "Blair's approach on the whole question of subsidies has been the right one. When the whole issue of the British rebate was recently raised by the French he courageously linked it to scrapping subsidies.

"Now we have finally got a commitment to ending subsidies. What we need is for the public to keep up the pressure on MPs and ministers. No-one expected to end poverty in an instant at Gleneagles. What we have done is make serious progress. We must now keep the pressure up in November."

While the commitment to end farming subsidies may be so distant as to provoke cynicism in the developing world, the undertakings on climate change and global warming were so lacking in detail that they provoked derision.

The close of summit declaration set no emissions targets and made only a passing reference to the Kyoto Protocol, which the Americans have always refused to sign, fearing it would damage the US economy.

Despite intense international pressure - some of it from Blair - and lobbying from environmentalists, the US gave almost no ground on global warming. Bush acknowledged that humans contributed to the problem, but he continued to insist the science of climate change was inconclusive.

The most which the declaration could come up with is the promise of new dialogue on global warming - including emerging economies such as India, China and Brazil - and promises to develop new technology as a means to limiting emissions without damaging living standards and the economy. But environmentalists have criticised the agreement as meaningless because it took no action to control global warming.

The global warming pledge is another of the pledges which the G8 will get back to, this time in a meeting in London in October.

A Labour insider defended Blair against accusations that he had failed to make the most of his special relationship with the United States to save the world from the effects of pollution.

"There would have been no point in getting Bush to reluctantly sign up to something only for it to be knocked out of the park by Congress," he said. "Far better to get agreement on something real. We said that we were going to tackle the problems of Africa. This is something which will help Africa. We could have pushed our luck and got Bush to sign up for both the aid and the climate change deal. And they would both have been thrown out over there. Far better to have Bush coming back with one hard sell, and he can sell it as a deal for Tony Blair, which will mean they are more likely to vote it through. Our Tony goes down pretty well over there."

But Malcolm Bruce, a Liberal Democrat member of the International Development Committee, said: "The American position is unreasonable, and that should have been made clear. We could and should have expected something better."

If the climate change failure was a bitter blow for Blair, then the deal on aid for the Palestinian Authority was a chance to claim that he had won a concession from Bush. Under the agreement, there will be an extra £1.72bn a year for the Palestinian Authority, aimed at building an infrastructure for when Israel begins handing over control of areas in Gaza and the West Bank.

Blair said the deal would allow "two states, Israel and Palestine, two peoples and two religions to live side by side in peace", although Bush was known to be cool about giving cash to the Palestinians, lest it be used to aid anti-Israeli fundamentalists such as the Hamas terror group.

In addition to the deal allowing Blair to portray himself as independent of Bush, the cash will be seen as a rebuke to the terrorists. Islamist terror groups often cite the plight of the Palestinians as a reason for their campaigns against the West.

But even the undertaking for the Palestinians included a softener for Bush. There was no reference to it in the final communiqué, just in one of the accompanying appendices. Although the cash will be provided, and the pledge to the Arabs is fully signed-up G8 policy, its exclusion from the communiqué means that it causes the US fewer problems.

One Labour insider explained how the cash would be seen as part of the fight on terror.

"The message of this cash to the terrorists is, 'We have a better way, and we are not like you.' We are helping the Palestinian people by helping them build a new life. What is of more use to the people of Palestine, dead people on the streets of London or billions of dollars of economic aid? If it is not in the communiqué but in an appendix, well, it makes it easier for the Americans and the cash will still be there."

This was a week dominated by Africa, a week in which Blair would be seen as saving the world with strongly worded resolutions for action from the globe's most powerful countries. Blair had to leave the summit with his mind very much focused on domestic matters, the outcome of the summit was less a programme for world change than a to-do list of things to get back to later this year. Nevertheless, for all the compromises and doubts, Blair has emerged from the summit with his reputation as a world statesman strengthened, the fixer who at least achieved some of his idealistic aims in the maelstrom of a terror attack.

Substance may have been lacking but the appearance of unity was retained, something that could be said to be just as important in the face of terror.

Palestinians Welcome G8 Commitment to $3 Billion Aid Package


GAZA, July 9, 2005 (IPC + Agencies) - - Chief Palestinian negotiator Dr. Saeb Erekat welcomed the recent pledge of $3 billion by G8 countries to the Palestinian National Authority during the recent summit in Gleneagles, Scotland.

Erekat hoped that such financial aid would coincide with a meaningful support of the peace process that would lead to ending the Israeli occupation of Palestinian territories since 1967.

The British Prime Minister Tony Blair, who is the current president of the G8, told reporters after the summit, "Yesterday evening the G8 agreed a substantial package of help for the Palestinian Authority amounting to up to $3 billion in the years to come, so that two states - Israel and Palestine - two peoples and two religions can live side by side in peace."

"We offer today this contrast with the politics of terror," Blair added, referring to the deadly bombings that struck the British capital city London last Thursday.

In the summit's chair summary, the G8 (composed of Germany, Canada, the United States, France, Italy, Japan, the UK and Russia) reiterated its support for the Quartet Committee's special envoy for the Israeli disengagement, and committed to raising global financial support of up to $3 billion.

"We met James Wolfensohn, the Quartet's Special Envoy for Disengagement, who briefed on his work to help ensure a successful Israeli disengagement from Gaza and parts of the West Bank, and his proposals for long-term follow-up to that process, laying the foundations for the viability of a future Palestinian state. We welcomed and strongly endorsed his efforts, and will explore how best to support his proposals for the future," the chair's summary noted.

G8 also urged Israel to let Palestinians move more freely around occupied Palestinian territories, as well we easing the restrictions that limit the growth of the Palestinian economy.

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