• Israel's responsibilities  - Yossi Alpher
The aid situation in Gaza, particularly since the Hamas armed takeover of June 2007, is especially problematic.

• Working in the void: views from an international aid worker  - Alexander Costy
The long-term effect of an aid-dominated economy is to undo mutual relationships between leaders and ordinary people.

• Aid without development  - George Giacaman
The willingness to provide aid is not accompanied by any vigorous political intervention.

• The hamster wheel  - Anne Le More
Diplomatic engagement requires pushing for a change in the overall policy of occupation and territorial expansion.

Israel's responsibilities
 Yossi Alpher

Aid--primarily international, but also Israeli aid--has long been a fixture of Israeli-Palestinian interaction. Israel's attitude toward both forms of aid has been complex and often ambivalent. Israel, whether as occupying power or as concerned neighbor, has a strong interest in facilitating international aid to the Palestinians in the West Bank and Gaza Strip.

Back in the pre-1967 days, when Israelis contemplated the role of UNRWA in the Palestinian refugee camps across the green line in Gaza and the West Bank and in neighboring Arab countries, the impression was overwhelmingly negative. UNRWA, it was said, contributed to Palestinian incitement and violence against Israel, and by its very existence prolonged the existence of the refugee issue, hence extended the conflict. The Palestinian refugees were the only ones in the world, out of some 150 million refugees in the post-WWII era, for whom a separate UN agency was established, and the only ones allowed to pass refugee status on from one generation to the next.

After the 1967 Six-Day War and the onset of the Israeli occupation, Israeli attitudes changed. UNRWA, it was discovered, also fed, clothed and educated Palestinian refugees--functions that under international humanitarian law would have to be born by the Israeli occupier unless it cooperated with the UN organization.

At the same time, Israeli government institutions also undertook some aid efforts, particularly with regard to agricultural and medical training and attempts to thin out the population of the Gaza Strip refugee camps. The latter enterprise involved both encouraging emigration and providing of land and resources for constructing alternative housing, and had a humanitarian as well as an ulterior motive--reducing potential refugee pressure for "return" to Israel. It proved both short-lived and generally unproductive or even counterproductive.

Today, under conditions of prolonged conflict, most Israeli medical, agricultural and other aid has been radically reduced or is delivered on a commercial basis. Cooperation on specific projects--e.g.,water resources development or joint marketing of agricultural produce--is limited in scope. It generally reflects an Israeli interest in promoting joint water and environmental conservation, along with collaboration in dealing with outbreaks of livestock epidemics and the like, and a degree of agricultural interdependence that has developed over the years. Israel also maintains Palestinian infrastructure supply--electricity, water, fuel, telephone services, etc.--on a commercial basis, as well as the supply of commercial foodstuffs and other materials, and continued to do so throughout two intifadas.

Meanwhile, international aid to the Palestinians has only increased. Today, most of it takes the form of emergency humanitarian assistance. The Israeli Civil Administration for the West Bank and Gaza, which liaises with the international aid organizations, generally argues that the donors provide a service that Israel cannot provide, particularly under hostile conditions. In general, Israelis have the impression that the Palestinian Authority squandered large aid increments in the period between Oslo and late 2000, when the outbreak of the current conflict put a virtual stop to development aid.

The aid situation in Gaza, particularly since Hamas' armed takeover of June 2007, is especially problematic. Israel, with the backing of the Quartet and even Egypt and the Ramallah-based PA, has taken to restricting the supply of international donor aid as well as commercial foodstuffs as a means of leveraging Palestinian public pressure on Hamas to moderate its extreme Islamist negation of Israel and restrict terrorists that fire rockets at Israeli civilian concentrations bordering on the Strip. (In some case, supply is curtailed of necessity because terrorists target aid delivery points.) There is little evidence that this Israeli economic warfare has the desired effect, while it certainly causes extensive humanitarian hardship. At a more general level, both Israel and at times the international community have for decades viewed economic aid and investment and their denial as effective carrots and sticks for steering Palestinians toward the desired political process--with little to show for their efforts, which ignore the essentially ideological/political nature of the conflict.

Some in the aid community believe that the international organizations are, in effect, subsidizing Israel's occupation; that it is Israel's obligation, and not theirs, to attend to the welfare of the Palestinian civilian population; and that the aid community could shorten the conflict significantly by "pulling out" and forcing Israel to confront the true cost of occupation. At the opposite pole of the spectrum there are also many Israeli politicians and security officials who today consider the international aid community to be a hypercritical source of trouble for Israel--one that inevitably sides with the Palestinian "underdog" and displays little sympathy or understanding for the Israeli response to Palestinian terrorism.

In effect, Israel's historically ambivalent attitude toward aid is embodied in the contradiction between its declared relinquishment of responsibility for the Gazan population after the 2005 disengagement on the one hand, and its call for the international community to cooperate with it and to continue to prevent a humanitarian disaster there, on the other.

Only if and when disengagement reaches phase two of the Israeli plan, under which Gaza's air and sea ports and land crossing (to Egypt) are reopened and developed, could Israel legitimately make the argument that it is legally and officially absolved of responsibility for the humanitarian welfare of the Gazan population, whether through economic development or through aid. Meanwhile, regardless of the logic or legal underpinnings of the international aid effort, it will continue to be necessary and justified, and will require various forms of coordination with Israel.

Looking further into the future, a viable two-state solution to the conflict may absolve Israel of its legal obligations toward the Palestinian population--but not, in the aftermath of 100 years of conflict, its moral obligation to alleviate Palestinian suffering (even though this need not and should not imply legal responsibility for that suffering). Moreover, eventual resolution of the Palestinian refugee problem and regional water problems will almost certainly bind Israel in some sort of treaty-based aid relationship with the Palestinian state. The two countries' infrastructures will also remain linked for a long time to come.

Friction over scarce resources, particularly borderless resources like water and clean air, will almost certainly continue to involve the international aid community in the "crossfire" between Israelis and Palestinians long after peace. At the same time, future Israeli-Palestinian relations will at least in some cases also reflect a strong Arab reticence to entertain overt Israeli aid, which will be seen and characterized as colonialist and paternalistic. This points to the prospect of a long term triangular relationship between Israel, the Palestinian political entity or entities and the donor community.- Published 25/9/2008 © bitterlemons-international.org


Yossi Alpher is coeditor of the bitterlemons.net family of internet publications. He is former director of the Jaffee Center for Strategic Studies at Tel Aviv University.

Aid workers are supposed to be the good guys in international relations. Their work is steeped in ethics. They try to do what's good for people or, at the very least, to do no harm. Yet international assistance can produce contradictions that make even the most seasoned aid professionals cringe.

As far back as the 1940s, Marshall funds meant to support civilian reconstruction in Yugoslavia were used to violently suppress opponents of the emerging Tito regime. In the 1990s, international aid enabled warring factions in Angola to divert their domestic oil and mineral revenues toward military operations, while up to two million civilians languished in a state of chronic hunger, insecurity and displacement. Aid professionals usually blame such twisted outcomes on the "politics" beyond their control.

In the occupied Palestinian territory, well over $12 billion in international assistance has been spent over the past 15 years. Yet for most Palestinians the economy is worsening and public institutions are more fractured than ever. Statehood seems more elusive today than at any time in the past. In this context, there is a standing argument that the primary function of international aid has been to subsidize Israel's occupation. Here too, well-meaning aid experts can be forgiven for wringing their hands, resorting to ready arguments about neutrality and urgent needs and for regarding, once again, "politics" with grave suspicion.

But aid needs politics in order to work. It performs best when it is allocated for clear purpose and within an agreed political framework. In the Palestinian context, the main intent has always been to support the Palestinian Authority, not Israel, to discharge social, economic and security responsibilities in the areas under the PA's jurisdiction as agreed within the political framework of the Oslo accords. Clearly, the investment has been toward a two-state solution, not continued occupation. But with the erosion of Oslo as a framework for international aid these distinctions have blurred. Sadly, Oslo has been neither revived nor replaced, and many aid managers genuinely wonder what it is, exactly, that they are working toward in the long run.

In practical terms, working in a political void has had troubling effects on the ground. A bewildering array of plans--rapid-action, early recovery, medium-term, public sector reform, emergency response, etc.--have been produced almost without respite over the past four years, often simultaneously, by the PA and international organizations. They seek to draw aid funds in this direction or that, are often at logical odds with one another and mostly serve to justify new spending where there is little real progress to show. In the meantime, new (or newly re-packaged) "boutique projects" meant to produce quick and easy wins on the ground, to "roll-out success from the bottom up", are proliferating. Because they confer visibility in the thick fog of the crisis, they may be difficult for some donors to resist. But it is difficult to tell what bearing they have on the overall logic of the conflict or on its eventual resolution.

But most worryingly, the political void has prompted a growing reliance on emergency financing instruments that function outside the very institutions that are central to the Palestinian state-building project itself. This can be seen in the rapid growth of multilateral programs in recent years: between 2004 and 2007, the size of the UN's annual humanitarian appeal for Palestine more than doubled. The overall value of UN programs grew from some $430 million in 2006 to an estimated $550 million in 2008. This represents about 30 percent of the PA's own annual budget.

There is no question that the UN is an effective and reliable implementing partner. But we are left to wonder about the state-building logic of encouraging multilateral budgets to grow as the PA's own revenue base shrinks rapidly.

Although they may openly shirk political interference, most aid professionals privately recognize the need for a decisive politics (whether they agree with it or not) to guide the aid effort. Given the deep uncertainties of the moment, this will not happen overnight. But in the meantime, foreign politicians who release large amounts of money should understand that they are not just managing a difficult crisis. The long-term effect of an aid-dominated economy is to undo mutual relationships between leaders and ordinary people. Leaders' accountabilities are diluted because key spending decisions are taken in faraway capitals. And because they can barely affect these decisions, ordinary people become disenfranchised, feeling more like refugees than potential citizens of a new state.

If this rupture deepens, it will be difficult to overcome. If anything, the post-Oslo years have shown us that without a sound political logic, aid can only provide diminishing returns over time.- Published 25/9/2008 © bitterlemons-international.org


Alexander Costy has worked in conflicts in Africa, Asia and the Middle East. From 2004 to 2007, he was head of coordination in the Office of the UN Special Coordinator for the Middle East Peace Process.

On September 13, 1993, the Declaration of Principles, the first Oslo agreement, was signed. Two weeks later, 42 countries and donor agencies met in Washington, DC to pledge over two billion dollars in aid explicitly for the purpose of furthering this "historic political breakthrough in the Middle East".

Since then, aid to Palestinians for development and diplomacy has gone through several stages. The first ended with the breakdown of the Camp David talks in the summer of 2000. Another was introduced with the re-invasion of the West Bank by the Israeli army in March 2002. Aid was by now largely dispersed for humanitarian purposes and to keep the Palestinian Authority afloat on condition it "reforms" itself. In June of the same year, the "100-Day Reform Plan" was launched.

After several interruptions, including the formation of the short-lived first ever Hamas government in 2006 and the subsequent unity government, this year has seen nearly seven billion dollars pledged for a three-year period to support the "Annapolis process". But there has been no development and the political process is stalling.

The World Bank is very clear about why there is no development. In the several reports the Bank has issued on the issue, it ranks the Israeli closure policy in the West Bank--the more than 500 obstacles to movement, including checkpoints, barricades, roadblocks etc.--as the main reason for the lack of investment, rising unemployment and general absence of socio-economic development in the occupied Palestinian territory.

In several of her 16 visits, US Secretary of State Condoleezza Rice has prodded the Israeli government to ease the closures, but to no avail. Slightly over three months are left until the end of the year, the Annapolis target date for reaching agreement, but hardly anyone is optimistic. And even if a "shelf agreement" is reached, Ehud Olmert, the Israeli prime minister, recently declared that it would only be implemented in stages over a period of ten years. Such a formula was one of the reasons the Oslo process collapsed.

It should be clear that for aid to lead to development in the Palestinian case, a stable political solution has to be arrived at. Here there's a problem with donors: the willingness to provide aid is not accompanied by any vigorous intervention in the political process that might bring results.

The reason for this paralysis is the fact that Israel has been far too successful in warding off external pressure to end its occupation of the West Bank and Gaza even while it has continued creating "facts on the ground" that undermine any possible political settlement. This is largely due to its influence in the US Congress and on various US administrations. As a result, the Palestinian-Israeli conflict has become an issue for negotiation primarily inside the Israeli political arena where the interests of parties and politicians are electoral, local and careerist. As Jordan's King Abdullah said recently, Israel has no strategic vision for peace. This is due to the fact that the conflict has become essentially a domestic Israeli issue.

Unless the conflict is put back in its correct place as a regional and international issue, no stable peace is likely to be achieved. This is where primarily the US but also Europe have failed. And everyone will pay and continue to pay a price and not only in aid. How many years donors are willing to continue to support the existence of the PA in the absence of a credible political process is an open question. Negotiations cannot be an end in themselves. Ultimately, the PA itself will lose legitimacy and whatever credibility it still retains. In the absence of peace, aid at best is "humanitarian relief".- Published 25/9/2008 © bitterlemons-international.org


George Giacaman teaches at Birzeit University and contributes political analysis to Arab and international media.

On September 22, the Ad-Hoc Liaison Committee, the main donor forum charged with coordinating international assistance to the Palestinians, met in New York on the margins of the United Nations General Assembly to discuss prospects for Palestinian economic revival and development.

This is seen by the international community not only as a humanitarian imperative given the dismal socio-economic conditions of the population of the occupied Palestinian territory, but also as a key pillar of Israeli-Palestinian peacemaking and Palestinian state-building. Although economic growth will in itself not guarantee peace, widespread poverty, unemployment and despair will make the search for a solution to the Israeli-Palestinian conflict and prospects for a viable Palestinian state much more difficult.

Key issues on the AHLC agenda were: (i) status of implementation of the Palestinian reform agenda as laid out in the Reform and Development Plan the Palestinian Authority presented to donors in Paris in December last year; (ii) status of implementation of measures by the Government of Israel to remove obstacles to Palestinian economic revival notably through facilitating the movement of goods and people as well as access to key natural resources such as land and water; and (iii) the need for donors to sustain their financial engagement through continued high levels of funds in direct support of the PA budget.

Though originally envisaged as an "ad-hoc" mechanism, the AHLC has now become a permanent donor mechanism and has been meeting regularly since the beginning of the Oslo process in the early 1990s. In view of continuing Israeli occupation and lack of Palestinian national sovereignty and control over borders and natural resources, a tripartite approach to further Palestinian economic development with parallel actions to be taken the PA, Israel and the donor community has also characterized those forums from the outset.

Sadly, however, not only has the AHLC become a fixed feature of the Israeli-Palestinian donor and diplomatic landscape with a fairly predictable tripartite format, but the issues on its agendas, analyses provided at its meetings by international institutions such as the IMF, World Bank and the United Nations, and the policy recommendations made on the basis of those analyses have also been remarkably constant. In fact, they seem to have become immovable.

This is how those meetings generally go and what they say:

The PA presents its development plan and is asked to make further progress in security performance, reform of its institutions and public financial management. Over the years, a number of plans such as the PRDP have been drawn up with more or less the same mix of measures to be taken, such as ensuring law and order, containing the wage bill or reducing Palestinian fiscal deficit. And some progress has been recorded in terms of security reform, transparency and fiscal management particularly in the post-Arafat period, even if much more can always be done.

For their parts, donors are asked to provide more funds. Indeed assistance has been growing year after year although flows often lack in predictability and generally fall short of the total amount needed. Just for the first eight months of 2008, the international community has disbursed an unprecedented $1.2 billion in recurrent budget support to the PA alone. Since 1994, more than $10 billion have been given to the Palestinian population of the West Bank and Gaza, not including the funds that cover UNRWA's regular budget. This is one of the highest and longest sustained rates of per capita foreign aid in the world.

Finally, Israel is asked to remove economic restrictions, notably facilitating the movement of goods and people within the Palestinian territories, between the West Bank and Gaza and between the oPt and the outside world. As stated over and over again by the World Bank, without a substantial overhaul of the closure system and access to economies of scale, natural resources and an investment horizon, there will simply not be any Palestinian economic growth. On this front, and despite sporadic and partial steps, the GoI is repeatedly found not to have fulfilled its obligations. And as restrictions persist, so does economic decline, despite sustained funds provided by the international community and whatever reform progress may be achieved. In fact, ever since the beginning of the Oslo peace process, Palestinian living conditions have worsened. Since 2000, the situation has become a full-fledged humanitarian crisis.

Of course, this parallelism in actions to be undertaken by the three main stakeholders is symbolic and primarily aimed at sustaining a semblance of diplomatic cooperation. As anyone who has been working on this dossier knows all too well, the situation is deeply asymmetric. As the World Bank states in its report to the AHLC this week, "aid and reform without access are unlikely to revive the Palestinian economy." Funds only just allow the PA to stay alive, so totally aid dependent have the PA and its economy become (external aid is estimated to represent about 32 percent of Palestinian GDP this year). Budget support will also prevent the population from growing ever more destitute as people increasingly rely on the public sector in the absence of growth and private sector opportunities. Fundamentally, however, little economic progress will be achieved.

And this system of restrictions is unlikely to be alleviated as long as Israel continues its military occupation, separation of the West Bank and Gaza and settlement expansion in the West Bank. For the past 15 years, the West Bank, East Jerusalem and Gaza Strip have become less and less contiguous and evolved into a collection of increasingly narrow and confined enclaves of high Palestinian population density. These are subjected to various regimes of control, citizenship status and human rights within one de facto Israeli sovereign space from the Mediterranean to the Jordan River. These "islands" of populations are isolated and strangled by a range of obstacles such as a complex permits system, military checkpoints, roadblocks, settlements, a dual segregated by-pass road system and the separation barrier. Though Israel has legitimate security concerns, those restrictions on Palestinian movement and access that stifle Palestinian life and development have less to do with the security of Israel proper than with that of its settlements and the by-pass roads that enable settlers to move freely within the occupied territories and between them and Israel.

Diplomatic accountability is needed for all stakeholders. Without linking economic assistance to a clear set of security, political and human rights goals leading to a permanent status agreement and an evenly balanced incentive structure toward both parties and not just the Palestinians, European and Arab taxpayers' money will continue to be spent without tangible economic benefits for the Palestinians. This also means little prospect of seeing the emergence of a viable independent state and, with it, of reaching a just agreement that will at long last bring peace to Palestinians and Israelis.

Diplomatic engagement requires more than packages of limited economic measures sporadically extracted by Quartet representatives such as James Wolfensohn and now Tony Blair. It requires pushing for a change in the overall policy of occupation and territorial expansion. It also requires for international partners to foster Palestinian national reconciliation rather than exacerbate the power struggle between Fateh and Hamas by providing funds to the PA while starving Hamas in Gaza. If serious political action is not taken to that effect, we can be sure that next year's AHLC will be about the exact same issues as this week--and the past 15 years.- Published 25/9/2008 © bitterlemons-international.org


Anne Le More is an associate fellow of the Middle East Program at Chatham House, London, and the author of International Assistance to the Palestinians after Oslo: Political Guilt, Wasted Money.