Aid to Palestine promotes peace and prosperity

As a dedicated partner for peace, Palestine supports the announcement by France last week of a new international conference aimed at resolving the almost century-old Israeli- Palestinian conflict. Yet our commitment to a two-state solution is increasingly being undermined by Israeli officials who now are seeking to diminish the viability of a Palestinian state by advocating a cut to international humanitarian and foreign aid for the Palestinian people, thereby denying us the ability to fund critical security and economic programs.

Donor funds support the Palestinian Authority (PA) budget and provide economic, technical and education assistance to upgrade Palestinian capacity and skill sets. With donor assistance, we have created full-fledged PA governmental institutions and infrastructure frameworks, which are fundamental attributes of a modern functioning state. We have done so in record time, despite Israel’s military occupation of Palestinian lands.

{mosads}We have done all of this with full transparency; detailed Palestine government financial statements are posted monthly to the Finance Ministry’s website.

Donor aid is closely monitored, audited and administered by the United States, World Bank, International Monetary Fund, European Union and others. The U.S. State Department has called aid to Palestine the most extensively reviewed program on the planet, and the IMF applauds the PA’s fiscal transparency and accountability in line with international standards.

Donor aid comprises less than 30 percent of our budget. Most of our budget (70 percent) is funded by clearance revenues — indirect taxes on imported goods. Under the 1993 Oslo Accords, Israel must collect and remit these clearance revenues to the PA. But, in violation of Oslo, the Israeli government deducts “handling fees” and other charges. 

The Israeli government uses that money to subsidize its relentless policy of colonizing Palestinian lands through illegal settlements. Since the 1993 Oslo Accords, Israeli settlements on our lands have tripled. The United Nations’s secretary-general and the EU this month again emphasized that Israeli settlements violate international law and provoke Palestinian frustration. 

Supplementing our revenues with donor aid, the PA expends the largest part of our budget (31 percent) on security and public safety. Those vital services protect Palestinians and Israelis alike. The remaining majority of our budget supports education, healthcare, social services and pensions.

Small periodic payments are made as welfare to support the families of Palestinians imprisoned by Israel. More than 850,000 Palestinians have been detained by Israel since the 1993 Oslo Accords. Most are detained on political charges fueled by Israel’s occupation, like curfew violations. This aspect of military occupation creates enormous social problems for Palestine because, overwhelmingly, the detainees are income-earning heads of families. 

The United States and other donors provided input when we established this social welfare program for detainees’ families. Donors recognize that this program provides a small but needed safety net for families who have lost their breadwinner and that it encourages released detainees to shun efforts by extremist groups to exploit them. This should not be controversial, especially when one considers that the Israeli government makes national insurance payments to Yigal Amir, the Israeli who killed Prime Minister Yitzhak Rabin. 

Yet in recent weeks, senior Israeli officials, led by Israeli Deputy Foreign Minister Tzipi Hotovely, have publicly attempted to distort these facts beyond recognition by using a double standard to vilify welfare payments to families of Palestinians held as political prisoners by Israel. Such individuals, who oppose Palestinian sovereignty and hope to undermine the PA, are part of the problem, not the solution. They will not block our path to peace and prosperity.

The reality is that the PA has been a good steward of donor funds. The World Bank confirms that donors’ funds are used by the PA to support water and sanitation, solid waste management, electricity, municipal service delivery and a host of other critical government functions.

Through hard work, the PA has reduced our budget deficit from over 15 percent of gross domestic product in 2013 to below 9 percent in just two years of work. We have enhanced revenue collection, rationalized expenditure practices and more efficiently managed public finance.

We shall always strive to do more. But Israel’s continuing military occupation of Palestine thwarts our effort to achieve sustainable economic growth.

First, in defiance of the Oslo Accords, Israel refuses to transfer to us Area C, the West Bank lands comprising 63 percent of Palestinian territory. This subtracts at least 20 percent annually from our economic growth.

Second, by blocking our access to East Jerusalem, Israel has torpedoed our ability to promote tourism to the holy sites there.

Third, Israel’s siege on Gaza blocks our access to over 40 percent of Palestinians, making effective governance there impossible.

And finally, Israel fully controls our borders, preventing any independent Palestinian trade policy.

Because the obstacles created by Israel are severe, the IMF and the World Bank have sounded the alarm that the West Bank and Gaza cannot survive without continued, indeed increased, donor aid. 

U.S. Secretary of State John Kerry recently underscored the blunt truth that those who try to undermine the PA “simply don’t believe in two states.” He challenged the Israeli government to do more to support the PA and pointedly asked whether Israel could afford to shoulder the PA’s responsibilities when donors end their support, rather than fund Israel’s illegal occupation of Palestine.

We are profoundly grateful for the generous support that the donor community has given the Palestinian people in their quest for independence. With their continued support, we shall be tenacious in our state-building efforts. 

We will prove to the world and to our friends that we are able to build a state in our land that shall be a beacon of inclusiveness, democracy and responsibility. Now more than ever before, we need the donor community to stand by us. And the day will come when they will have reason to be proud for having played a part in advancing the cause of peace and in bringing justice to the Palestinian people.

Bishara is minister of Finance and Planning for the Palestinian Authority.