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Newsletter - November 2006

November 9, 2006

As the Lebanese war and the deaths in Iraq during Ramadan fade from the news, bulletins from the Middle East are re-focusing on the Palestinians. A central theme is rising poverty.

A joint European-US decision established a policy of not dealing with the Hamas government. The Funding for Peace Coalition (FPC) is concerned that this sidestepping - whether via the Presidential offices of Mahmoud Abbas, via private initiatives or via NGO's - is unlikely to have a better outcome.

A case in point is the International Development Committee (IDC) of the UK parliament. It is conducting a review to determine effective alternatives for UK aid, in the light of developments since the election of Hamas. The remit of the committee shows a tendency to favour NGOs.

In their minds must be the fate of the Gaza greenhouses vacated by the Israelis in August 2005. Mr Wolfensohn, the former chief of the World Bank, encouraged private individuals and institutions to join him in investing personal funds to purchase the plantations for the Palestinians.

Initially, although the greenhouses were raided by over zealous Palestinians, the sites were restored and tended to. There was genuine hope and expectation that they would become a source of employment, replacing sorely needed income for the Palestinians, who had previously worked them on behalf of the Israelis. The pictures below reveal the sad reality.





In the first photo, the greenhouses in August 2005, as they were handed over to Palestinian sovereignty. One year later, the second photo reveals an Israeli soldier during a military action designed to prevent the massive weapons smuggling and consequent rocket attacks on Israeli civilians from Gaza. The greenhouse is barren. Devoid of its economic hope, it has been used as the cover for a terrorist smuggling tunnel.

The core of the FPC's campaign has been opposition to the abuse of valuable public resources ploughed in by the European Community and other international donors. These resources are limited. Whether directed towards greenhouses, hospitals or schoolbooks, they have been diverted from the global emergency aid agenda. And they have been diverted again - toward destruction; destroying hopes of peace, order and prosperity for Palestinian society.

In our specific example, the reader will have noted that the tunnels require sophisticated construction, which must be funded. The weapons and other goods transported via these systems also have to be purchased. More money sidetracked from the dreams of peace toward the nightmare of destruction.

There have been relatively few schemes where the results have led to a better way of life for the Palestinians. Even the DfID - the department of the British Foreign Office which executes the decisions taken by the IDC - can rarely account with full transparency for its expenditure in the Palestinian territories.

It is clear that without a dramatic shift in the administration and application of international aid, Palestinian poverty will remain addressed.

Palestinian opinion polls regularly confirm the position of the FPC. In April 2006, a poll by the Palestinian Center for Public Opinion, 47% of the Palestinian public said that the reason for Hamas' rise to power was either the corruption of Mahmoud Abbas' Fatah regime, or its mismanagement of the Palestinian Authority (PA). After six months of Hamas government, a poll by the Palestinian Center for Policy and Survey Research showed that 89% of Palestinians now believe corruption exists in the PA and 72% believe that jobs are obtained mainly through wasta, or personal connections.

It is in this context that the FPC welcomes the IDC inquiry, and has made a submission on behalf of our members, for the committee's consideration. The submission outlines the issues and makes a set of four very specific recommendations. The submission can be seen in the Reports section of our website.

Using international aid to help reduce poverty is an established, and still welcome, concept. What is increasingly disturbing for monitors of international aid is the manner in which the previous mistakes, which allowed vast sums to be diverted to Palestinian corruption and terror, are being repeated in current dealings - and not just with the Palestinians.

First, following the devastation from the August war in Lebanon, Europeans and others pledged around $1 billion toward the cost of rebuilding. Significantly, there has been little mention of accountability in the declarations of financial support. A recent editorial in the Washington Times highlighted concerns, claiming that the terrorist organization of Hezbollah is bound to benefit from such a lax approach. This is yet another Middle Eastern story where the people will be ignored, as the masters of weaponry benefit.
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Second, President Abbas is trying to show the international donors that he can form a coalition that will act responsibly and also to recognise Israel. These are the two key elements, which will allow the Europeans and others to release appreciably more funds to the Palestinians.

The real question is can the PA - whether led by Fatah under President Abbas, a Hamas controlled government , or a coalition of these forces - assure donors that their funds will be disbursed with accountability and transparency?
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To clarify our concerns, it is worth recalling the FPC's newsletter from June 2006. We reported that "the new Hamas government appears to have no intention of addressing the issue of budgetary reform, despite its electoral platform". Europe appears to be willing to over-ride previous declarations, backing down from its insistence on previously agreed-upon financial reforms called for by the World Bank.
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Ending on an optimistic note, the FPC has carried a report from the Economist, which describes a new "mini MBA" for Palestinians, in conjunction with the University of Maryland. In a region where education has become a tool of war and where unemployment is threateningly high, these initial measures must be seen as a welcome change.
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