Do We Know Where the Money Goes? - Progress Report

Brad Nielson

Dateline: March 21 2004

"..from the point of view of Palestinian interests….we need to change the faces of those in power, hold people to account.." - Mohammed Dahlan, a former Palestinian cabinet minister, writing in the Guardian, May 2002.

The Funding For Peace Coalition (FPC) has long argued that giving aid and charity is a noble task, but one that demands appropriate controls. Unfortunately, much of the support destined for the Palestinians has been distributed in a reckless manner, rarely reaching the intended target populations in full. There is clear evidence of it being used to extend the conflict - or even worse, being diverted to violence and corruption.

The past week, the public domain has seen three new aspects of this dangerous political compote.

First, an article in The Scotsman sets out clearly the problem of EU funding to date. Europeans have constantly channeled taxpayers' monies towards the PA, claiming it has reformed or was about to reform. This "spin" has unraveled in the past month. A new generation of Palestinians is now shouting out loud that the PA itself is the prime obstacle to political, financial and social reform. And as the Europeans have been caught out, new attempts to circumvent the issue are proving equally problematic.

The article in full can be found at

Similarly, the International Herald Tribune has focused on European reluctance to clamp down on so-called charities, which channel money to terrorists. True, the source of the funding may not be the public purse, but the result is often the same. The money goes to a rich faction leader or his arms supplier, but not to the average citizen. European leaders are failing again the very people they wish to help.

Anne Richard's assessment can be read at

On a more immediate plane, the UK Department for International Development has issued a 32-page draft statement, proposing a massive influx of funds towards the PA. The introduction calls weakly for transparency and for methods to monitor success.

It is not the position of the FPC to debate if the report is accurate, although it is clearly lacking in impartiality, leaving many "facts" open to discourse. The point is that Her Majesty's government is running down the same path, which the EU began to chase over a decade ago.

The EU has channeled 4 billion EUR into the PA and there has been minimal reform; political, social and economic.

Item on political reform: Palestinians have long tried to reason that national elections could not be held since 2000 because of Israel's reaction to the Intifada. In fact, Fatah's Revolutionary Council was elected into office over 15 years ago. Even internally, it has only finally convened for the first time in 3 years. No political reform here.

Item on financial corruption: The IMF report in September 2003 revealed how hundreds of millions had been misappropriated and how there were major ongoing structural deficiencies within the PA Ministry of Finance.

Item on social corruption: The Toronto Star reported that there have been 32 slayings in recent months in Nablus of innocent bystanders, suspected Israeli collaborators and, in one particularly high-profile case, Ahmad Buraq Shaqa, the businessman brother of Nablus Mayor Ghassan Shaqa. Basem 'Eid, founder and director of the east-Jerusalem based Palestinian Human Rights Monitoring Group and former deputy director of the Israeli human rights group B'tselem, was quoted saying: "The question is: What Palestinian interior minister would dare punish those responsible? Would the Palestinian interior minister be killed if he imposed a penalty upon them?" (See article.)

Even the World Bank, from whose previous meeting Lian issued his jubilant praises, has now woken up. Nigel Roberts, the Bank's leading representative in the region said at the end of February 2004: "Without evident commitment and progress towards tightening these systems and improving accountability, the PA will not get the money it needs". And that is after, in Roberts' words, the Palestinians have benefited from "the highest per capita transfer in the history of foreign aid".

While certain charities point out that the average Palestinian is forced to live on $2 a day, one thing is clear. The Europeans have latched on to a catchy phrase 'reform' in order to justify further investment, which is unlikely to change this sad statistic.

And now the UK has caught the bug as well.

Mr. Dahlan made his point nearly two years ago. If the Europeans did not wake up then, what makes us think direct UK investment in the Middle East will be any more successful?

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