Trade not aid?

International aid to Palestine currently stands at about £1.8 billion, and in addition to providing essential services for nearly half of Palestinian people, it also allows the Palestinian Authority (PA) to operate and pay its employees. However, life on the ground here is becoming increasingly desolate, with a huge gap in resources and high levels of unemployment. America and Israel have threatened to withhold funding to Palestine if they were to be successful with their bid for statehood, and whilst other Middle Eastern countries have vowed to match whatever is withheld by The Ugly Sisters, what is becoming clear to me is that this is really beside the point. I was told today by one of our partners at UNAIS that even if foreign aid to the West Bank and Gaza were tripled, Palestine’s GDP would only grow by 5%.

Furthermore, according to an article in today’s Guardian (Israeli occupation hits Palestinian authority), Israel’s occupation deprives the Palestinian economy of over £4.4billion a year, almost 85% of Palestine’s nominal GDP! A combination of the blockade on Gaza, water restrictions, natural resource restrictions, and import and export limits have served to hinder and isolate Palestine in the global economy. Palestine can never be an autonomous, sovereign state state as long as it relies on foreign aid, and all the caveats and constrictions that international aid brings with it.

Our partners have repeated time and time again that whilst the work undertaken by various organisations is of course beneficial, everything in this country has a political purpose, and applications for aid must fit a certain criteria for foreign budgets. This is one of the predominant reasons that a lot of money is going into so-called “state-building” and advocacy at the moment; multilateral projects like these are currently the “sexy” way to support Palestine. Khalid, who is my director at DFID, said a few years ago apparently it was disability projects..

This is clearly not sustainable if Palestine is to build a viable state. As Hasan Abu Libdeh, the economy minister at the PA said today, “No matter what the Palestinian people achieve by our own efforts, the occupation prevents us acheiving our potential as a free people in our own country.” He went on to suggest that one of the reasons that Israel has refused to respond to international calls for peaceful negotiations is the profit it makes from being an occupying power. For some of the people I work with, the situation has become so desperately unresolvable in recent years that they even suggested they wished the PA would dissolve itself, so that Israel would have full fiscal responsibility for Palestine, something that would inevitably cripple the Israeli economy in a time of global economic austerity. Then perhaps we would see a peace treaty negotiated more quickly.

What the international community, and the UK too must realise, is that being dependent on aid will never resolve anything in the long-term for Palestine. Only ending the occupation can do that.


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