Where Did All the Billions of Dollars Given to the Palestinian Authority Go?

By Barry Rubin

Palestinian Authority (PA) Prime Minister Salam Fayyad says that his regime is short of funds. And meanwhile a reader asks me:

"Can you please explain to me why 20 years after Oslo and billions in dollars in foreign aid, the Palestinian Authority (PA) still has not built modern hospitals? Or rather, why do the donor countries pour money down the PA drain without expecting even some face-saving results?"

Good question. Short answer: Swiss bank accounts. In other words, a huge amount of the money has been stolen. There is nothing more distasteful than rulers of a people--especially a poor people--who complain about their subjects' suffering at the same time that they profit from it. Of course, when some foreign observer sees Palestinians in poor conditions they blame Israel, thus furthering the cause of the same leaders who, -by their intransigent policies, ensure that the situation continues.

The personal wealth of PA "president" Mahmoud Abbas is estimated at $100 million. Add onto that millions of dollars for a large number of PA and Fatah senior officials along with the hundreds of millions of dollars that Yasir Arafat carried off and you get the idea. Remember, too, that this total of about a half-dozen billion dollars has gone to an entity ruling just over two million people over the last twenty years.

I have seen the villas of the PLO leaders in Tunis and the PA leaders in the West Bank and Gaza Strip. I have followed in detail the saga not only of Yasir Arafat's personal stash but also how he used corruption to sustain his political control. And his heirs mostly continue to run the Palestinian movement.

It is easy to forget that the PA has existed for 18 years and governed virtually every Palestinian on the West Bank and the Gaza Strip starting about 16 years ago. That's a long time. And while Israel can be accused of harassment and putting up various roadblocks, its part in this problem has been limited. Indeed, Israeli actions that have hurt the PA's economy have arisen in direct response to episodes of terrorism, violent confrontation, and all-out wars started by the PA itself.

Foreign donors have learned that no matter how great the humanitarian benefit of any project it will only get done if they pay for it and supervise it directly. One notorious example was the effort to build a better sewer system in the Gaza Strip (before the Hamas takeover) which was delayed for years while the PA did nothing to help its own people.

PA leaders have received more aid money per person than anyone else in history and yet the results have been remarkably unimpressive. The leaders have looted the money and used it as political pay-offs to buy patronage. By patronage I mean paying off the proportionately huge security forces that guard the PA and provide jobs and salaries for its political supporters.

Note that in recent years, since Hamas seized the Gaza Strip the aid money has gone mostly to the West Bank only, though some of it is used to pay PA employees in the Gaza Strip to keep them loyal even if these people just stay at home. In other words, the level of aid has stayed the same but the number of people being supported generally has been cut in half.

__________________________________________________

Barry Rubin, Israel: An Introduction (Yale University Press) is the first comprehensive book providing a well-rounded introduction to Israel, a definitive account of the nation's past, its often controversial present, and much more. It presents a clear and detailed view of the country’s land, people, history, society, politics, economics, and culture. This book is written for general readers and students who may have little knowledge but even well-informed readers tell us they’ve learned new things.Please click on the picture of the book on the right column of this site to purchase and/or get more information on the book.
___________________________________________________

Yet the PA cannot provide jobs for most of its people or build good institutions. Luxury apartments are going up but not hospitals, schools, and infrastructure improvements. Even though the PA economy is doing well--how could it not do so given the tidal wave of aid?--the regime cannot even enforce its own law forbidding Palestinians from working on Jewish settlements on the West Bank. Thousands do.

Prime Minister Salam Fayyad is respected in the West as a relatively honest, professional, and moderate guy who tries to stop the thievery. He is totally powerless in political terms. The leaders of Fatah have been working endlessly to get rid of Fayyad so they can have unrestricted access to the loot again, while Hamas also wants to fire him. Only the demands of the Western money donors have kept him in office. But for how much longer will that be true?

Why does the world not pay attention to this massive theft, inefficiency, and misappropriation of funds?

Simple.

• The money is not being given for development purposes but for political purposes to keep the PA going and to make sure that Hamas doesn't take over the West Bank. That's why President Barack Obama, with Israeli government support, has just overridden Congress to release even more U.S. aid to the PA. He also has not objected to the PA using that money to pay its former bureaucrats in the Gaza Strip, thus indirectly benefitting Hamas, too.

• Giving money to the PA supposedly supports the cause of peace and therefore is considered sacrosanct in the West, even though the PA isn't negotiating for peace. From a cynical Western leadership's standpoint it can be said that at least the funding keeps things relatively quiet in the face of lots of other troublesome issues in the region. Thus, they overlook the PA's partnership deal with Hamas--which is not working out so well anyway--and remained passive until the very end about the PA's violation of its own commitments to seek unilateral independence at the UN.

• The left-controlled media and academia don't like Israel and generally refuse to criticize the PA because it is allegedly the "moderate,' 'peace-loving," "good guy" and victim. The Palestinians, after all, are non-Christian, non-Western, and--in the bizarre parody of reality prevalent today, "non-white."

And so the Western taxpayers give the money, the PA leaders steal or use the money for political purposes, and the average Palestinian suffers more from this situation than from the largely extinct "Israeli occupation." Then their suffering--despite their leaders having received more aid money per capita than any entity in history and being far less than that of people in six dozen countries--is used to indict Israel. If, as seems to be true, Fatah has finally pried control over the money from the hands of Fayyad, whose sin has been that he was too honest, the situation would get much worse.

Barry Rubin is director of the Global Research in International Affairs (GLORIA) Center and editor of the Middle East Review of International Affairs (MERIA) Journal. His book, Israel: An Introduction, has just been published by Yale University Press. Other recent books include The Israel-Arab Reader (seventh edition), The Long War for Freedom: The Arab Struggle for Democracy in the Middle East (Wiley), and The Truth About Syria (Palgrave-Macmillan). The website of the GLORIA Center  and of his blog, Rubin Reports. His original articles are published at PJMedia.