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Millions in aid for Palestinian Authority, but where has it gone?

David Frankfurter

The European Union has poured an astonishing 4 billion into Yasser Arafatís Palestinian Authority (PA) since 1993. Together with contributions from the UK, the US and other individual countries, this, according to a leading World Bank official, is the largest per capita transfer of aid funds ever. But while evidence of high-level corruption within the PA is clearer than ever before, Brussels persists in claiming that it sees reform; its efforts to change the PA are "paying off".

Any serious analysis of the money reaching the PA necessarily begins with Chris Patten. As EU Commissioner for External Relations, he has spearheaded a policy of far-reaching tolerance towards his Palestinian beneficiaries. "We have done more to reform the PA than anybody else ... reinforced transparency in finances Ö and the adoption of the Law on the Judiciary", Patten has claimed. The true picture is deeply depressing. While the average Palestinian wallows in poverty, and violence created by the Palestinians shows no sign of let-up, their leadership shows few visible signs of financial distress. Where has the investment gone?

Mohammed Dahlan, one of the inner circle of PA powerbrokers, throws some light on the question: "Those who are surrounding Arafat are blocking internal reforms," he explained last month. Hardly surprising? It is no secret that the PLO was established in the 1960s under KGB guidelines. Four decades later, the same leadership remains in power, enjoying the fruits of a much richer economic climate. Consider:

1. Nabil Shaath, the PAís current foreign minister, was cited back in 1997 for financial mismanagement. Today, he owns a super-luxury villa in the middle of Gaza.

2. Mrs Arafat lives in ostentatious luxury in Paris with her mother and staff, funded from EU-provided budgets.

3. Arafatís hand-picked prime minister, Ahmed Qurei, came under investigation as the owner of a cement company that supplies Israel with material for building settlements and its reviled security fence.

4. The IMF, in a September 2003 report, revealed that hundreds of millions have been misappropriated and pointed to major structural deficiencies within the PAís Ministry of Finance.

Then thereís the lawlessness. The mayor of Nablus, Ghassan Shakaa, resigned last month in protest at the absence of progress in dealing with unsolved rapes and unpunished crime. In some towns, rival militias, such as Arafatís Al-Aksa Brigades, compete for control of the streets. As for democracy, Palestinians have often reasoned that elections could not be held since 2000 because of Israelís reaction to the Intifada. In fact, Fatahís Revolutionary Council was elected into office more than 15 years ago.

Itís not hard to understand why the EU officials repeatedly raise the flag of reform. It spares them from having to face up to the minimal return on their huge investment. New villas in Ramallah and Gaza are the few visible signs of donor money having passed through town. The European Commission money managers must be seeing this. Otherwise, how do we explain their recently revised strategy of channelling aid into Palestinian NGOs instead of directly to the PA? Yet most Palestinian NGOs are connected to the PA leadership. Some have been caught engaging in corrupt practices or working outside their stated charters.

Consider LAW - a Palestinian human rights agency. Only after some $2m of European taxpayersí money ended up in private bank accounts, was an investigation started. Or the Palestinian Red Crescent Society - severely criticised by the International Red Cross for using ambulances to ferry weapons. The Negotiation Support Unit runs activities that directly contradict UK national policy.

European money plays a very significant role in the events affecting the Palestinians. The taxpayer deserves to see a better use of the money. The average Palestinian needs to see it arriving.


David Frankfurter is a writer on the Middle East conflict.


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