Donors Slow to Aid Palestinian Territory

By MacKinnon, Colin | Washington Report on Middle East Affairs, December 31, 1994 | Go to article overview

Donors Slow to Aid Palestinian Territory


MacKinnon, Colin, Washington Report on Middle East Affairs


Donors Slow to Aid Palestinian Territory

By Colin MacKinnon

Time for a tally. How much of the $2.4 billion that international donors promised one year ago has actually reached the Palestinian Territory and been put to work? Recall that $1.2 billion of this was described as "emergency funding." Recall, also, that the total disbursement of this emergency funding in 1994 was supposed to be $393 million.

Well, at summer's end 1994, the best guess is that of the $2.4 billion pledged, somewhere around $50 million has actually ended up in Palestine, and that mostly for day-to-day expenses.

What's holding things back is well known. Donor nations and multilaterals (like the European Union) have so far just not been willing to entrust the Palestinian National Authority with their money.

Donors complain of a lack of "transparency" and "accountability" at the PNA and PECDAR, the Palestine Economic Council for Development and Reconstruction. What the donors imply is that they're afraid that corruption or incompetence or both will lead the shaky PNA to squander their money and damage the program. PECDAR has yet to appoint an international consultant to oversee procurement and project management. The donors say they have legal guidelines that force them to scrutinize recipients and withhold funds when the recipients don't measure up. So far, they say, the PNA hasn't.

Fear of PNA misspending isn't the only problem, though.

World Bank officials will admit, if donors won't, that the donors sometimes haven't talked enough with the PNA and have tended to ignore the need for funding recurrent costs--salaries, administrative expenses and the like--in favor of infrastructure projects. The donors have been demanding administrative competence from the PNA but mostly haven't seen fit to help fund it.

How long this impasse will last and how it will be settled is anyone's guess. But going into autumn 1994, there's been no resolution.

The Jerusalem Question

Curiously, the issue of Jerusalem, supposedly political and supposedly put off for a couple of years, has intruded itself into the funding stand-off. Talks in Paris in early September between the World Bank, the PNA and the Israelis broke down over the issue of whether or not to fund Palestinian institutions in East Jerusalem. The Palestinian Authority, of course, wanted to; the Israelis flatly refused to allow it. Not much except rancor has leaked out from the meetings, but a Palestinian official has been quoted as saying that six percent of the Palestinians' 1994 $160 million operating budget was to be spent in Jerusalem.

Will Palestinian tourist companies have access to Jerusalem?

The question of Jerusalem will show up in contexts other than controversies over where aid money can be spent. Take tourism. The tourist industry should be a major contributor to the Palestinian economy. But will Palestinian tourist companies have access to Jerusalem? If they don't, they're really not going to make it commercially. Will they and the Israelis work out an accommodation?

As the Paris talks ended, the World Bank issued a curt, highly unusual announcement quoting Caio Koch-Weser, World Bank vice president for the Middle East and North Africa, who voiced his "deep disappointment at the way in which things have evolved...we cannot allow such meetings that are expected to mobilize and coordinate aid to the Palestinians to be derailed by the two main parties bringing their political differences to the table."

Shortly thereafter, Ahmed Korei, PNA minister of economics and trade and a key negotiator at the Oslo talks last year, went public in an interview with the London daily Financial Times, expressing gloom over the lack of funding coming into the Palestinian Territory and threatening to resign. Korei is thought to hold Yasser Arafat responsible for the donors' slow transfer of funds. He is said to think Arafat scares off donors by continuing to insist on personally overseeing the disbursement of aid rather than delegating authority to responsible and accountable institutions that donors can trust. …

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