Corruption and The Debate Over Funding the Palestinian Authority

How long will the world continue to give the Palestinians a blank check, without any oversight into how the money is spent?

Many were surprised when the Foreign Minister of Norway, Espen Barth Eide, said in an interview with the Jerusalem Post this week that both the Israelis and the Palestinians should know that the world will not continue to fund the quasi-state in the West Bank indefinitely. It was likely an empty threat meant to apply pressure on both sides, notably on the Palestinians at least as much as on Israel. But any talk of cutting the international funding of the Palestinian Authority is a rare step.

Elliot Abrams, a former advisor to Presidents Ronald Reagan and George W. Bush and a senior fellow for Middle East Studies at the Council on Foreign Relation, responded to Eide’s interview in his blog yesterday. Abrams believes that the very idea Eide expressed, that the aid to the Palestinians may be halted if progress is not made on the diplomatic front, is counterproductive and dangerous. Abrams believes that the funding of state-building is more important than “leaping to final status agreements.” He also believes that the international community has not “met the challenge of providing adequate political and financial support for state-building.”

Both sides are right, and both sides are wrong. The idea that the Palestinians should not be given a blank check to do whatever they want is sound, but the cutoff of aid could have devastating consequences if it is not handled carefully. The current status quo is the most tenable and peaceful it has been since the first Intifada, and the costs and benefits of any move whose potential costs could be a new outbreak of violence should be carefully weighed. The idea that the act of state-building should be considered one of the most important parts of the peace process is also sound, but only if safeguards are in place to ensure that the money showered on the PA actually goes towards state-building.

Abrams is wrong to say that America and Europe have not provided enough financial aid to the Palestinians for state-building. The Palestinians are among the largest recipients of aid-per-capita and have received tens of billions of dollars in aid since the signing of the Oslo Accords. Their economy is based around foreign donations, and they continue to receive hundreds of millions of dollars in total aid each year. The problem is not, as Abrams seems to believe, that not enough money is being given to the Palestinian authority.

The problem is that their is no oversight once the aid reaches the PA and the money does not go to the Palestinian people or towards state building, but is lost in one of the worst cultures of corruption on the planet.

Suha Arafat, wife of the late Palestinian leader who launched the murderous Second Intifada, was famous for spending aid money meant for the Palestinian people on Paris shopping sprees. Today that sort of corruption continues, as is highlighted in the latest report of the Coalition for Accountability and Integrity and as dozens of officials close to Mahmoud Abbas under investigation for stealing public funds. It is widely assumed that the former Palestinian Prime Minister, Salam Fayyad, was forced to resign because he stood up to this culture of corruption and actually wanted to use the money to build a state.

And even when the money is not being used for the humanitarian purpose of making the old guard of Fatah rich it is often still wasted on causes that not only have nothing to do with state-building but actively hurt the chances for peace. The PA pays the salaries of terrorists sitting in Israeli prisons. It does not matter whether they are in prison for, even if it is for murdering children. Their mere presence in jail is enough to warrant their collectively receiving $5 million each month.

Not once does Abrams address these seemingly insurmountable problems in his blog, but unless he has a plan that can overcome all of the corruption and waste that prevents aid money from actually reaching the Palestinian people his dream of building a state from the ground up will remain as much a fantasy as the final status agreements he rightly has little faith in. Nor does Minister Eide address the corruption problem. Instead he frames the issue entirely in relation to the outcome of the current peace talks.

The debate over the continued blank checks given to the PA is an important one to have. But it is a useless debate if it does not deal with the most important issue: how the money is spent.

About the Author
Gary Willig is a researcher at the Center for Near East Policy Research and a student of communications at Bar Ilan University