"The recent G8 summit produced a decision to double international aid to the Palestinian Authority – to $2 billion per year. The announcement, which comes on the eve of Israel's removal of settlers from Gaza and parts of the West Bank, has been widely lauded. The Economist predicted that the aid would 'help to shore up' Palestinian President Mahmoud Abbas, adding that 'putting more cash at his disposal to alleviate the suffering of an angry, impoverished populace can only help.'
"In fact, it will not help – and it may very well hurt. The West Bank and Gaza simply cannot absorb this much money effectively. Much of it will end up going to waste; and worse, it may be used for corrupt purposes, feeding cynicism among ordinary Palestinians and thereby undermining the shaky legitimacy of the Palestinian Authority.
"After the 1993 Oslo accords, international aid for the Palestinian territories doubled from $250 million a year to $500 million a year; after the 2000 intifada started, it doubled again to $1 billion a year. In addition, the P.A. currently takes in about $1.1 billion in revenue per year – ironically, mostly from taxes collected by Israel on the P.A.'s behalf.
"By and large, that money will be spent poorly. Next year, just $300 million will go to development outlays, while $1.6 billion will go to salaries and pensions, which is all too often a euphemism for handouts – of the 58,000 security personnel, no more than 20,000 show up for work, according to Lt. General William Ward, U.S. envoy to the region.
"Raising aid to $2 billion per year would mean spending $600 per person – 10 times the Live 8-Bob Geldof-Tony Blair target for Africa, a goal that has been criticized by International Monetary Fund researchers as too high for the continent to absorb.
"It's true that Palestinians are desperately poor and depend on humanitarian aid. But it's not the total amount of aid that's a problem; it's the way that aid is currently distributed. And therein lies the truly pernicious effect of sending too much aid to the territories: In addition to being wasted, excessive aid has the potential to exacerbate problems in Palestinian society.
"Consider that after Oslo, USAID tackled the housing problem in Gaza by building 192 apartments at a cost of $35,000 to $42,000 each, in a place where per capita income was around $1,200 a year. Guess who got the apartments: politically well-connected families, some of whom occupied multiple units without paying.
"There is reason to fear that future aid would be spent just as poorly. A massive Rand study released this year (titled 'Building a Successful Palestinian State') recommends constructing a high-speed railroad linking the major population areas of Gaza and the West Bank. There is the minor problem that, as the authors note in passing, roads rather than rail would be used for most freight shipments, for emergency services and for those who can afford cars – including tourists, dignitaries and the growing middle class the study envisages.
"As former World Bank President James Wolfensohn has pointed out, a good road would connect the Palestinian urban areas at a much more modest cost than the billions the authors propose to pour into a railroad – which could quickly turn into one of the money-draining, inefficient public enterprises that plague many developing countries. All of which is to say that excessive aid money could well fund white-elephant investments, saddling the P.A. with operating costs it can ill afford.
"So if aid won't help the Palestinian economy, what will? In a word: security.
"The key to restarting the Palestinian economy is easier movement of people and goods – and the essential prerequisite for freer movement is stopping terrorist attacks. Therefore, the best way to help the Palestinian economy is not aid, but stronger Palestinian security efforts so that Palestinians can once again work in Israel, so that Israelis will once again shop and dine in Ramallah, and so that foreign tourists will once again visit Bethlehem."
Mainline Churches Start to Go Where Even Saudis Fear to Tread
George Mason University law professor Eugene Kontorovich writes in The Wall Street Journal (www.opinionjournal.com) on July 22 about the recent church attacks on Israel:
" 'It is the Occupation in its many facets that foments the violence and fuels the conflict [in Israel],' said a report endorsed by leaders of the Anglican Church at their meeting in Britain last month. They adopted a resolution there supporting divestment from companies doing business with Israel.
"The Anglicans are only the most recent on a list of mainline Protestant churches to endorse a boycott of companies with ties to the Jewish state. The United Church of Christ took similar action last month, and the Presbyterian Church USA passed a resolution last year.
"But there is little evidence that the leaders of these churches are representing the sentiments of their members. The Presbyterian action provoked outrage from the church's rank and file, as well as bipartisan condemnation in Congress. The church has yet to actually divest any funds, and its horrified congregants might still reverse the decree.
"These denominations are mainline, but their anti-Israel position is far from mainstream. Indeed, they are divesting even as many of Israel's most vocal critics forswear such tactics.
"Even Israel's Arab enemies are backing away from these tactics. Saudi Arabia, because it needs U.S. approval to join the World Trade Organization, is poised to drop its long-standing boycott of American companies that do business with Israel; Egypt and Jordan have already done so.
"Still, the divestment movement continues in some Protestant denominations. The United Church of Christ is particularly noteworthy for its hypocritical treatment of Israel. [It] condemns Israel's security barrier for, among other things, 'changing an international border without direct negotiations between partners.' Yet the divestment resolution, passed at the same meeting, specifies exactly what Israel's final border must look like and what Israel must give up, including Judaism's two most holy sites.
"It would seem beyond the bounds of decency for a Christian church to demand that the Jewish state cede sovereignty over its sacred places. Is there any other religion to which these denominations would presume to dictate the disposition of its holy sites?
"Most American Christians back Israel and its right to defend itself. (The evangelical wing of Protestantism is especially vocal in its support.)
"[In fact,] a recent nationwide survey sponsored by the Anti-Defamation League revealed that nearly four times as many Americans sympathize with Israel than with the Palestinians.
"The same cannot be said, though, for the leaders of these churches."