The political and territorial challenges facing Israeli and Palestinian peace negotiators are formidable and familiar. The economic obstacles to the creation of a viable Palestinian state are also formidable, but easier to make a dent in — if all the donors who claim to care about the Palestinians and peace live up to their promises.On paper, this week’s international pledging conference was a huge success. Led by the United States, the European Union and Saudi Arabia, donors committed to contribute $7.4 billion over the next three years. That is almost $2 billion more than the Palestinian Authority had sought, though probably less than it really needs.
The conference owes at least some of its success to Tony Blair, who is coordinating international efforts to support Palestinian development. It was also helped by the Bush administration’s overdue attention to peacemaking since the Annapolis conference and by the serious economic recovery plan presented by the Palestinian prime minister, Salam Fayyad, an economist.
Fund the Palestinians? Bad Idea
Lavishing funds on Mahmoud Abbas and the Palestinian Authority to achieve peace has been a mainstay of Western, including Israeli, policy since Hamas seized Gaza in June. But this open spigot has counterproductive results and urgently must be stopped.
Life has been growing steadily grimmer in the West Bank and the Gaza Strip since the outbreak of the second intifada in 2000 and Israel’s crushing military counterattacks and economic blockades. Things got even tougher after the West suspended most of its support following Hamas’s 2006 election victory. Those aid spigots have now been reopened, at least to the West Bank where Palestinian Authority moderates, under President Mahmoud Abbas, are in charge. It is crucial that the people of Gaza also receive support. But that support should not flow through Gaza’s Hamas government.
Fund the Palestinians? Bad Idea
Some background: Paul Morro of the Congressional Research Service reports that, in 2006, the European Union and its member states gave US$815 million to the Palestinian Authority, while the United States sent it $468 million. When other donors are included, the total receipts come to about $1.5 billion.The windfall keeps growing. President George W. Bush requested a $410 million supplement in October, beyond a $77 million donation earlier in the year. The State Department justifies this lordly sum on the grounds that it “supports a critical and immediate need to support a new Palestinian Authority (PA) government that both the U.S. and Israel view as a true ally for peace.” At a recent hearing, Gary Ackerman, chairman of the House Subcommittee on the Middle East and South Asia, endorsed the supplemental donation.
Not content with spending taxpayer money, Secretary of State Condoleezza Rice launched a “U.S.-Palestinian Public Private Partnership” on Dec. 3, involving financial heavyweights such as Sandy Weill and Lester Crown, to fund, as Rice put it, “projects that reach young Palestinians directly, that prepare them for responsibilities of citizenship and leadership can have an enormous, positive impact.”
One report suggests the European Union has funneled nearly $2.5 billion to the Palestinians this year.
Much of the money pledged on Monday will be needed just to keep Mr. Abbas’s government solvent. What the Palestinian economy really needs is private investment to reanimate commerce and revive trade with the world. That can only happen once Israel agrees to remove the barricades that seal off West Bank communities from each other and feels secure enough to ease the passage of goods through border crossing points.
Fund the Palestinians? Bad Idea
In brief, each $1.25 million or so of budgetary support aid translates into a death within the year. As Stotsky notes, “These statistics do not mean that foreign aid causes violence; but they do raise questions about the effectiveness of using foreign donations to promote moderation and combat terrorism.”The Palestinian record fits a broader pattern, as noted by Jean-Paul Azam and Alexandra Delacroix in a 2005 article, “Aid and the Delegated Fight Against Terrorism.” They found “a pretty robust empirical result showing that the supply of terrorist activity by any country is positively correlated with the amount of foreign aid received by that country” – i.e., the more foreign aid, the more terrorism.
If these studies run exactly counter to the conventional supposition that poverty, unemployment, repression, “occupation,” and malaise drive Palestinians to lethal violence, they do confirm my long-standing argument about Palestinian exhilaration being the problem. The better funded Palestinians are, the stronger they become, and the more inspired to take up arms.
To make a real difference, the billions pledged in Paris will need to be matched by diplomatic progress.
Fund the Palestinians? Bad Idea
A topsy-turvy understanding of war economics has prevailed in Israel since the Oslo negotiations began in 1993. Rather than deprive their Palestinian enemies of resources, Israelis have been following Shimon Peres’s mystical musings, and especially his 1993 tome, The New Middle East, to empower them economically. As I wrote in 2001, this “is tantamount to sending the enemy resources while fighting is still under way – not a hugely bright idea.”Rather than further funding Palestinian bellicosity, Western states, starting with Israel, should cut off all funds to the Palestinian Authority.
Crossposted on Soccer Dad.
One would think that if you want someone to do something that they aren’t inclined to do, make it advantageous for them to do it. It makes no sense to offer them inducements not to do what you want…unless it’s the Middle East. There, from the Jews deeds, from the Arabs, words.
That is called paying the Danegeld, and we’ve proved it again and again,
That once you start paying the Danegeld, you never get rid of the Dane.
Do stupid, short-sighted, and ignorant people become diplomats and world “statesmen”, or do normal people become that way when they become diplomats and world “statesmen”?