The post-Annapolis talks between the Israeli and Palestinian negotiating teams, set to start today, are expected to focus on process rather than substance. At the same time, Palestinian Prime Minister Salaam Fayad said on Monday that he would be seeking a $5.6 billion, three-year aid package at a donors conference next week.
Last month, Quartet envoy Tony Blair unveiled a plan for major international projects to aid the Palestinian economy. "It is a critical part of this process," Blair said, "because without hope of prosperity and a rise in living standards and giving people an economic stake in the future... the politics will never succeed." Blair is right that there is a connection between economics and politics, between hope and security. The record regarding the connection between aid to the Palestinians and economic progress, however, is dismal.
Between the signing of the Oslo Accords in 1993 and 2002, for example, the Palestinians received over $4 billion in aid, according to the World Bank. This amounted to $214 per capita, which is more aid than any other people in the world received.
After the Oslo Accords dissolved into a terror war, the Palestinians actually received more assistance, and even more since Hamas's rise to power. In January of this year, UN Undersecretary-General Ibrahim Gambari reported that since Hamas won the parliamentary elections a year before, aid to the Palestinians, not counting funds going directly to Hamas, amounted to an astounding $1.2 billion - a 10-percent increase over the previous year. Despite this massive flow, mostly in food aid and cash-for-work programs, per capita income declined in 2006 by at least 8%, and poverty levels increased by some 30%.
In addition to choosing terrorism, another major Palestinian economic blight has been corruption. A 2005 Atlantic Monthly article by David Samuels estimated that Yasser Arafat and his senior aides may have stolen as much as half of $7 billion in aid sent to the Palestinian Authority. Citing an International Monetary Fund report, Samuels claimed that Arafat may have personally taken $900 million in international assistance between 1995 to 2000, not including kickbacks and other forms of corruption.
It is for this reason that George T. Abed, a former IMF official who was appointed governor of the Palestine Monetary Authority, stated in 2005 that "if you poured in a lot of financing at this time... it would be wasted."
Some argue that the situation now is different; this time, it will not just be throwing good money after bad. Yet even this has been heard before. In 2004, Nigel Roberts, the World Bank's director for the West Bank and Gaza, told international donors, "Maybe your $1 billion a year hasn't produced much, but we think there's a case for doing even more in the next three or four years." Clearly, as Blair himself recognizes, any new money earmarked for the Palestinians must be tightly linked to crackdowns on corruption, to establishing the rule of law, to dismantling armed gangs and to economic cooperation with surrounding countries, including Israel. But even this is not enough.
It is impossible to do any of this while even the PA that Abbas controls is still teaching, believe it or not, that the "Palestine"-to-be will be in Israel's place, not Israel's peaceful neighbor. On November 28, the day after the Annapolis conference, official PA television broadcast a map of all of Israel, the West Bank and Gaza covered with a Palestinian flag. A month earlier, PA television repeatedly broadcast a song that described Palestine thus: "From Jerusalem and Acre and from Haifa and Jericho and Gaza and Ramallah / From Bethlehem and Jaffa and Beersheba and Ramle / And from Nablus to the Galilee, and from Tiberias to Hebron." Abbas may not control Gaza, or even much of Fatah, but he does control his own official media. There is no point to throwing more money at him if he does not take minimal steps to show that these funds will not be put toward a state dedicated to Israel's destruction.
Crucially, furthermore, ending the incitement against Israel in the PA-controlled media would mark a vital step toward creating an atmosphere in which Abbas could begin to impress upon his own people the legitimate sovereign rights of the Jewish state and the consequent need to compromise with it. Surely, if Abbas wants to lead the Palestinians to reconciliation, he has every interest in explaining to them why this is justified and necessary.
