Does Foreign Aid Help Palestinians

United States Secretary of State Hillary Clinton on Monday pledged $900 million in aid to the Fatah-led Palestinian Authority, including $300 million for rebuilding Hamas-controlled Gaza. While this seems well and good, does this charity actually help the Palestinians?

Representatives from at least 75 donor nations are meeting in Sharm el-Sheik with a goal of raising money to rebuild Gaza after Israel's military offensive.

Egyptian Foreign Minister Ahmed Aboul Gheit says international donors have pledged $4.48 billion in new funds at a donors conference on rebuilding the Gaza Strip, which is even more than the $2.8 billion the Palestinian Authority desired.

Billions of dollars have been donated in the past by the U.S. and European Union (EU) countries - $7.7 billion has already been pledged for 2008-2010.

The PA has become the world's largest welfare state.

In a report filed last summer, the World Bank concluded that billions of dollars in foreign aid has enabled the PA to inflate its public payroll while its education system continues to incite violence against Israel.

And yet, even as aid rises, the domestic output of the PA economy has actually dropped by 30 percent on a per capita basis since 1999, one year before the Oslo War, the Second Intifada, or what we call the Stupidfada

A Middle East Quarterly essay written by Steven Stotsky, last summer, noted the relationship between terror and aid moneys. Almost all of the foreign aid before the Stupidfadfa was directed to economic and infrastructure development programs. The escalated terror campaign since 2000 cut employees' wages and PA tax revenues, leaving the PA more and more dependent on foreign aid.

In a classic example of the creation of perverse incentives, the decision to fund the government budget made the Palestinian Authority less dependent on revenue derived from commerce, detaching the PA's solvency from the health of the economy. Thus, while the intifada sent the Palestinian economy into free fall, the PA's coffers swelled. The conditions were thus established that ensured the separation of Palestinian governance from responsibility for the economic health of the Palestinian people.

Even some prominent Palestinians are troubled by the current determination to fund the Palestinian Authority, Stotsky notes. "Abed of the Palestinian Monetary Authority, although supportive of financial assistance to the Palestinians, has spoken openly of the futility of providing donor aid, asserting that what is needed is investment."

Secretary Clinton insisted that the aid will flow on the condition that none of it would reach Hamas. This is ridiculous, and flies in the face of a long history of Hamas putting its hands on foreign money, weapons and United Nations humanitarian aid.

1. An Israeli newspaper reported Monday that it obtained a Palestinian document proving that PA Prime Minister Salam Fayyad spent 90 million shekels ($21.5 million) for rebuilding Gaza with tax revenues that Israel had transferred with the understanding they would be earmarked for salaries of PA employees.
   
   Hamas directly received the funds, none of which were deposited in workers’ accounts in Gaza banks, according to the Hebrew-language newspaper Yediot Acharonot. Fayyad had claimed that he needed the funds urgently to cover salaries, but a large portion of the money was used instead to rebuild Gaza homes and mosques, some of which have been used by Hamas as weapons storage depots.
2. Earlier this year, the United Nations Relief and Works Agency (UNRWA) admitted that Hamas had commandeered convoys of aid destined for its warehouses. Weapons that the United States and other countries have supplied the past several years to Fatah leader and PA Chairman Mahmoud Abbas also have found their way into Hamas hands and have been used in terrorist attacks against Israelis.
3. Journalist David Bedein noted that according to a study conducted by the Jerusalem Center for Public Affairs (JCPA), the PA is bound by the "Mecca Agreement" of 2007 to fund the Hamas regime, including the growing army of the terrorist group, which is outlawed by the United States.

The reality is that it is virtually impossible to separate aid in Gaza from Hamas, which wrested control of the region from Fatah nearly two years ago.

Meanwhile, on the sidelines of the conference in Sharm e-Sheikh, representatives of the Quarter met to discuss the Peace-by-Pieces Process. While there are no real differences in what should be done, there is some disagreement on how, especially as regards the role of Hamas.

While the US genuinely seems adamant in wanting to see Hamas meet the three conditions set by the Quartet in the past - recognizing Israel, renouncing terrorism, and accepting previous agreements - before being given any international legitimacy, even as part of a wider Palestinian unity government, the European tone that has emerged in recent talks in Jerusalem with Israeli leaders is a desire to somehow get over the three criteria issue, so that it doesn't pose a threat to the diplomatic process.

Many of the Europeans want to see more "creativity" in finding a way to let Hamas come back into the PA, even if the organization falls short of accepting all three conditions.

As for Israel, these conditions are not negotiable. Prime Minister-designate Binyamin Netanyahu said in a Washington Post interview published Saturday, "Hamas is incompatible with peace."

And yet the money is pledged, the money will be given, and nothing will keep Hamas from getting the money.

Last year, US citizen Richard David Hupper was sentenced to three-and-a-half years in federal prison for aiding Hamas. Hupper admitted to giving $20,000 to Hamas while working in Israel with the International Solidarity Movement, a thinly-veiled front for the gang.

Will we have to send the Secretary of State to jail, too?