As yuletide approaches, the average Palestinian must be wondering what present he can expect from the wintry North. But Bethlehem’s man in the street might be surprised to hear that the EU has already filled his Christmas stocking with around €4 billion (Euros) over the past decade.
As he struggles to survive on a princely €1.70 a day, our Palestinian’s heart will no doubt be warmed to hear of the European investment that has rolled in since the Oslo Accords were signed. Following the EU’s example, the United States has added some €110million to the last two years’ UNRWA budget.
On it goes. Belgium and Italy contributed significantly to the new and “improved” Palestinian schoolbooks – despite their inflammatory content. Canada has promised €37 million in humanitarian contributions between 2000 and 2006. Ironically, the EU even funded an €19 million counter-terrorism programme in the West Bank and Gaza.
Does all this largesse mean a turkey in every Palestinian pot this holiday season? Not likely. Current politically correct orthodoxy says blame Israel and the occupation. That makes for a nice slogan, but it doesn’t add much clarity to the analysis. The 33 years from 1967, which followed the end of Jordan’s illegal occupation of the West Bank, saw the rate of Palestinian ownership of domestic appliances soar from 5 percent to around 90 percent of the population; gross domestic product zoomed skywards during those same years. The Palestinian Authority’s launch of the Intifada in September 2000 reversed the trend and brought the pain of deep economic recession to both Israel and the Palestinians.
The problem, it appears, lies elsewhere. The stupendous personal economic gains of the Palestinian elite and their largesse provide a good place to start looking.
Yasser Arafat’s personal wealth was assessed by Forbes magazine in March 2003 as marginally trailing the Queen of England’s. His wife and daughter “make do” in their luxurious Paris quarters on a monthly allowance of €85,000 of Palestinian public funds, according to a CBS News analysis.
Sadly, it would seem that Arafat has no copyright on such liberties.
The PA’s former Deputy Minister of Health, Munzar Al-Sharif, appropriated a complete medical laboratory - donated to his people by the German government - to a privately owned hospital. Palestinian Finance Ministry funds paid for the installation of an expensive air conditioning system in the Foreign Minister’s Ramallah home. European loan financing intended to fund a Palestinian power plant was instead applied to the purchase of valuable real estate for the chairman of the PA’s Energy Authority: there goes €1.7 million. Documented stories of UNRWA aid - food and medicines - finding their way to the black-market are legion.
In his little-reported resignation speech, Abu Mazen, former Palestinian Prime Minister, complained bitterly of tens of millions “stolen annually” and the rejection of his repeated attempts to implement controls over cash payments, which were met with “a silly excuse and a cover for theft” by Palestinian bureaucrats.
Why does this keep happening?
Amazingly, the European Commission consistently tells us that there is little cause for concern. In November 2001, President Prodi assured that “The use of our funds is closely monitored by the IMF.” The Rt. Hon. Christopher Patten assures his Parliamentary masters “We have found no evidence of EU funds being used for purposes other than those agreed between the EU and the PA.” Patten’s office again stressed the IMF role in monitoring international aid, when quizzed on funding controls by a recent UK Parliamentary inquiry,: “We implement this [aid] under the control of the International Monetary Fund, so that the IMF controls the broad aggregates of expenditure by the Palestinian Authority.”
Sounds good, but the IMF sees it differently. Their report of September 2003 reveals $900 million in assets ‘diverted’ from the Palestinian system into private accounts. They then point to other wide ongoing control gaps in EU-funded PA budgets, presided over by the same circle of thieves.
No surprise to anyone - except perhaps to the European Commission. One full year earlier, George T. Abed, a Palestinian and Jordanian national, in his role as Director of the IMF’s Middle Eastern Department, wrote: "there has, no doubt, been some abuse …the IMF does not and cannot control downstream spending by the various Palestinian agencies. This matter remains between the Palestinian Authority and the donors.”
The Palestinians are simply not seeing the benefits of these monumental transfers of aid. It is time to rethink this sad strategy, which is harming the Palestinian, the European taxpayer, and the Middle East peace process.
David Frankfurter is an Australian business consultant, corporate executive and writer, currently resident in Israel, who frequently comments on the Middle East conflict.