How much does terrorism cost the Palestinian economy?

In a recent edition of the Guardian’s data blog – where facts are evidently “sacred” – contributor  focused on history’s refugees and naturally managed to include the Palestinian “Nakba” while failing to mention the more than 800,000 Jewish refugees from Arab lands in the two decades following 1948.


So, when we saw Chalabi’s byline in a new data blog entry on the Palestinian economy, (How does Palestine’s economy work?, Oct. 14), we weren’t expecting much.

Chalabi begins her piece, thus:

These days, the economic health of any country relies on that of others – but the Palestinian Territories are exceptionally dependent on factors outside of them. On what do Palestinian economic fortunes rely on and how does the future look?

Whilst she notes the role played by Palestinian corruption, Egyptian restrictions and a few other factors, her focus, accounting for a large majority of the text in the story, is naturally on Israel.

She writes:

Israeli occupation in Palestinian territories, the barrier it has constructed along and within the West Bank as well as its land, air and sea blockades in the Gaza strip have placed severe limitations on the success of Palestinian economic policies.

A complex web of checkpoints and roadblocks make it difficult for Palestinians to travel within the Palestinian Territories for jobs, to bank or to trade. Farmers whose land is now behind the barrier are required to apply for ‘visitor permits’ which Israel regularly rejects – in Akkaba it approved 49% of applications in 2011, and just 20% by 2012. More recently, a report from the World Bank found that Israeli restrictions in the West Bank alone cost the Palestinian economy $3.4bn (£2.1bn) a year, or 35% of its GDP.

Israel’s reach in the Palestinian Territories means it can exert enormous power over Palestinian livelihoods. Oxfam estimates that 800,000 olive trees have been uprooted by Israeli authorities since 1967. As a result, the 80,000 Palestinian families that the UN claims are economically reliant on the olive harvest lose £12.3m each year To show the impact of this, Visualizing Palestine showed what an area with a third the amount of trees – Central Park – would look like if it were destroyed.

Israel may have policies that hamper the Palestinian economy, but it is also a major source of Palestinian livelihoods. Unemployment is exceptionally high in the West Bank and the Gaza strip where almost 1 in 4 adults are jobless. According to the latest report from the International Labour Office, some 87,000 Palestinians aged over 15 (around 10% of all those with jobs) are employed in Israel and its settlements.

The majority of these Palestinians are employed in the construction sector, followed by manufacturing and agriculture – all of which tend to be characterised by insecurity. A survey by Palestine’s main trade union found that only 11% of workers in Israeli settlements said they had job security, over half received less than the minimum wage and 65% had been exposed to toxic substances.

Though you can read our posts in response to the World Bank report mentioned by Chalabi here and herethe remarkable thing about her claim regarding the harmful effects of Israeli checkpoints and security fences on the Palestinian economy is that she doesn’t say a word about the Palestinian violence which prompted them.  You’d almost be forgiven for believing that Israel enacted these defensive security measures for no reason whatsoever, or for the purpose of choking the Palestinian economy.  Indeed, words such as “terrorism”, “rocket”, “militant” and “violence” are nowhere to be found in her post.

To get a sense of how extraordinarily misleading this is, imagine a media report about the injurious effects of economic sanctions on Iran which didn’t even mention that the sanctions were enacted to influence Tehran into complying with U.N. Security Council demands that it halt its nuclear weapons development.

Similarly, Chalabi – as with most Guardian Left narratives about the economic toll of Israeli defensive measures on the Palestinian economy – is conflating cause with effect.  It ignores the fact that the Israeli blockade of Gaza was prompted by thousands of rockets targeting Israeli civilians, and that the security fence was constructed in response to waves of deadly suicide bombings in the early 2000s which targeted cafes, markets, bus stops and other public areas where families and children congregate.  

One can of course debate the particular costs and benefits of specific checkpoints, or question whether the route of the security fence can be altered to improve Palestinians’ quality of life while continuing to protect Israeli civilians.  But, to completely ignore that these measures were undertaken to carry out the most fundamental mission of government – to protect its citizens from harm – represents a glaring obfuscation.

Just once, we’d love to see an analysis of the economic impact of terrorism on the Palestinian economy.  To those so inclined, here are a few dynamics worth attempting to quantify:

  • The cost to the Palestinian economy by Israeli security measures necessitated by Palestinian terror
  • The cost of procurement, production, maintenance and deployment of nearly 13,000 rockets launched by terrorists in Gaza since 2001
  • The cost of terrorist tunnels in Gaza, both in terms of the government funds used to build them as well as the diversion of concrete and other construction materials which would otherwise be used to improve their infrastructure 
  • The costs of guns, ammunition, suicide belts, explosive devices (and training of ‘militants’ to use such arms) in the West Bank and Gaza since the First Intifada
  • The related cost to the Palestinian economy of thousands of Palestinians involved in the terror industry who could otherwise be employed in more productive enterprises
  • The cost to the Palestinian Authority of paying salaries to Palestinian terrorists in Israeli prisons
  • The cost to the Palestinian economy of their leaders’ glorification of terror and Zionist scapegoating and related failure to nurture a national ethos of education, hard work and innovation

The World Bank report on the Palestinian economy optimistically predicted a $3.5 billion windfall as the result of Israeli withdrawal from the West Bank. But, even leaving aside the question of which party is to blame for the economic impact caused by the failure to reach a peace agreement, it seems reasonable to take into account the cost of Palestinian values, habits and cultural norms which are inimical to economic prosperity.

Palestinians pay dearly for Hamas ‘resistance tunnels’

The IDF recently discovered an elaborate and costly tunnel from Gaza to Israel which was likely to be used by Hamas to launch future terror attacks.


A soldier investigating the Gazan terror tunnel that led into Israeli civilian communities,

The 1.7 km tunnel (leading from Khan Younis, in southern Gaza, into Israel) was complete with an electrical supply and phone lines, was reportedly the longest ever constructed, and extends a full 18 meters underground. It cost Hamas tens of millions of dollars, and used an estimated 24,000 concrete slabs and 500 tons of concrete (material which the IDF had recently permitted into Gaza in greater quantities to benefit the ‘civilian’ construction sector). If it had been utilized in a terror attack, or a kidnapping, it could have prompted a full-scale war. 

However, whilst the Guardian’s Harriet Sherwood has been focused on other ‘productive’ Gaza smuggling activities, and hasn’t yet reported on the tunnel, we’d recommend that – if she does cover it – she considers framing the story in a manner similar to her coverage of a World Bank report titled ’Israel’s West Bank control ‘costing Palestinian economy billions, and focus on the money lost by the tunnel’s construction and the likely loss in future imports and trade.  

She may also want to glean important context on the implications of the story from our guest contributor Akus who, in response to Sherwood’s World Bank story, questioned the assumption that wealth will flow from Palestinian lands due merely to an end to the ‘occupation’.  Akus suggested the speciousness of the assumption that a new Palestinian state will be economically successful, especially in light of the long history of mismanagement by the PA, which has included billions in wasted and stolen foreign aid.

Akus also pointed to factors the World Bank report on the ‘root cause’ of Palestine’s economic woes didn’t take into account.  He noted that their rosy scenario of future growth (once free of the yoke of ‘Israeli oppression’) ignores a Palestinian culture which is inimical to such progress – the deleterious effects of terror, incitement and moral scapegoating inherently inconsistent with the values necessary for social and economic progress and self-reliance.

Indeed, while most mainstream media outlets have reported on the terror tunnel, we haven’t yet read an analysis which has seriously connected the dots and provided readers with an understanding of the implications of such Islamist duplicity.

A serious contextualization of the story would note that, just last month, Israel permitted delivery of increased quantities of cement and steel for use by the private sector into Gaza, levels not seen since 2007 when Israel banned their transfer fearing that Hamas would use construction materials unsupervised by international aid agencies to fortify its positions and build tunnels for terror attacks.

Indeed, the IDF reported that “sufficient evidence suggests that terrorists methodically abuse construction materials transferred into the strip by Israel as humanitarian aid in order to build such [terror] tunnels.”

In other words, initial Israeli concerns about the potential misuse of humanitarian aid for military purposes (dual use items) have clearly been vindicated.

The next time you read a report at the Guardian or elsewhere criticizing Israeli restrictions on imports into Gaza, consider how many homes, schools, medical facilities, water sewage treatment plants, and other vital infrastructure projects could have been built in Gaza with the construction materials Hamas continues to divert for military purposes.

Further, per the post by Akus, you can conclude from the enormous resources (in time, money and manpower) that went into the Gaza terror tunnels that the rosy scenarios for peace and prosperity in another independent Palestinian polity are, at best, quite questionable.  

When pro-Israel commentators criticize the Palestinian culture of incitement and terror, they aren’t engaging in ‘Zionist talking points’ but, rather, are expressing sincere concerns that the greatest peace treaty ever written can’t engender a Palestinian culture of peace, education and self-sufficiency.  Though most Israelis support in principle ‘two states for two peoples’, Israelis accurately extrapolate from the consequences of recent territorial concessions that withdrawing from land alone won’t necessarily bring peace if Palestinian leaders don’t cease in inculcating their citizenry with the values of belligerence, hate and violence.

It’s unclear how anyone truly concerned with peace in the Middle East can fail to recognize that the “resistance tunnels” in Gaza not only will cost millions to the Gazan economy, but will result in an additional loss more difficult to quantify – the continued erosion of Israeli trust, and the fear that even our bravest and most audacious peace overtures will never truly be reciprocated. 

The Guardian (and World Bank) distorts cause of Palestinian economic woes

A guest post by Akus

Harriet Sherwood has been remarkably quiet of late, but rushed into service on October 8 with a story headlined ‘Israel’s West Bank control ‘costing Palestinian economy billions, which was followed by the sub-header “World Bank says allowing Palestinians to use the 61% of the West Bank under full Israeli control would boost the economy”.


Her article is based on a 72 page World Bank study released a day earlier, West Bank and Gaza – Area C and the future of the Palestinian economy.  Sherwood cites Mariam Sherman, World Bank Country Director for the West Bank and Gaza, asserting the following:

“Unleashing the potential from that ‘restricted land’ … and allowing Palestinians to put these resources to work, would provide whole new areas of economic activity and set the economy on the path to sustainable growth”

Powerful language, but as I read through the article, and then much of the World Bank report, several strange aspects of the belief that Palestinian control of Area C would make such a dramatic difference became apparent.

1. Why does Israel control “Area C”?

The World Bank report and Sherwood’s article make it appear that Israel unreasonably maintains control of Area C. Sherwood repeats the false claim that Israeli settlements are illegal: “All Israeli settlements, which are illegal under international law, are situated in Area C.”

In fact, Israel is behaving in accordance with the Interim Agreement it made in 1995 with the Palestinian Authority ceding interim control of Area C to Israel and not restricting ‘settlement’ activity. So it is important to understand how Area C came into being and why Israel remains in control of it, something that Sherwood ignores or doesn’t understand.

Area C was created as a result of the 1995 Interim Agreement, as the report itself makes clear in its description of the agreement in Par. 8 of Page 3, and in part was intended to pass to Palestinian control:

The division of the West Bank into Areas A, B and C dates back to the 1995 Interim Agreement between the Palestinian Liberation Organization and the Government of Israel. Area A includes most major pre-existing Palestinian urban areas, covers 18 percent of the West Bank and is under full Palestinian security and civil control. Area B consists largely of peri-urban areas and small towns, comprises 21 percent of the West Bank and is under Palestinian civil control and Israeli security control.

Area C was defined under the Interim Agreement as “areas of the West Bank outside Areas A and B, which, except for the issues that will be negotiated in the permanent status negotiations, will be gradually transferred to Palestinian jurisdiction in accordance with this Agreement.

So the Palestinians agreed that Area C would remain under Israeli control, at least until final negotiations settle the borders between Israel and a future Palestinian state.

It needs reminding that since the Palestinians have frequently walked away from negotiations following the 1995 Agreement, Israel is justified in maintaining its control of Area C. Yasser Arafat agreed to this in exchange for control of the heavily populated areas of the West Bank (full control of Area A, civil control of Area B).

Thus the underlying premise of World Bank report, faithfully repeated by Sherwood, that “Israel’s control of a huge swath of the West Bank is costing the Palestinian economy $3.4bn (£2.1bn) a year”, represents a mischaracterization. The Palestinian West Bank economy, until final agreement is reached, can only be considered to include Areas A and B.

The Palestinian Authority’s previous refusal to negotiate the future of the West Bank’s borders, among other matters, means that they have not negotiated the transfer of much of Area C to their own control as was expected when the agreement was signed.

2. How many West Bank Arabs live in Area C?

Per Sherwood, the report says about 180,000 Arab West Bankers live there. Actually, it is a bit more complicated than that, and oddly enough that figure comes from a largely EU-funded Israeli NGO called Bimkom (which specializes in providing planning assistance to Arab communities in Area C) rather than from a Palestinian source. Bimkom’s estimate is provided in footnote 66 on Page 18 of the report:

The Palestinian population located in Area C is estimated by the Israeli planning organization Bimkom to be 180,000 (this includes those whose house is located in Area C but are part of communities which are split between Area C and Areas A or/and B); PCBS data shows that around 113,000 people live in communities entirely located in Area C.

The 180,000 strong Arab population of Area C is considered to be about 6.6% of the West Bank Arab population.  Put another way, approximately 93.4% of all West Bank Arabs live in areas A and B whose economy is controlled by the Palestinian Authority.

3. So how prosperous can Area C be if the Palestinians controlled it?

As I considered that 93.4% number and the $3.4 billion I began to wonder about the methodology and conclusions of the World Bank report. The methodological approaches are laid out in great detail at the end, but deeper thought suggests that the report may be overly optimistic in assessing the degree to which control of Area C would really change matters economically for the West Bankers   (the report mostly ignores Gaza).  To make matters worse, the report’s Executive Summary claims that the calculation of $3.4 billion, which already includes a “1.5 overall multiplier effect” on “other related sectors”, is “very probably an underestimate”.

Now, $3.4 billion (or even more, if the hint in the Executive Summary is believed) is indeed a considerable sum.  But, before I thought more deeply about it and realized how carefully the issue has been framed by the World Bank report, I dismissed it as rather a marginal issue. (I am reminded of Daniel Kahneman’s 2011 book “Thinking, Fast and Slow” shows how framing issues can change perceptions).

“Thinking fast”, I recalled that Israel has a GDP of about  80 times that $3.4 billion number and as small as the Palestinian economy might be by comparison, surely the gain of $3 billion or so would not be the panacea that the World Bank thinks. Are they that much on a knife-edge between prosperity and disaster?

Well, no. “Thinking slow”, I realized that if $3.4bn (£2.1bn) a year represents 35% of Palestinian GDP, the GDP of Areas A and B (and possibly Gaza) must be only about $10 billion at most. In fact, Figure 1 of the report shows that indeed the current Palestinian GDP is $10 billion. 

Ten billion dollars (US) is a remarkably low number for a population of 2.5 million people (excluding Gaza), even for 4 million people if the $10 billion number includes Gaza.  It is about $2,500 per capita (the PCBS predicts $1,687 per capita and by comparison Israel’s GDP is about $13,800 per capita) and a terrible indictment of the economic performance of the PA (and Hamas). It also demonstrates how billions in aid that have been poured into “Palestine” has been wasted. 

The World Bank report expects us to accept that even though the entire population of Areas A and B (93.6% of the West Bank Arabs), and possibly including that of Gaza (another 1.5 million people), generates a GDP of $10 billion, controlling and developing other largely empty areas of the West Bank will increase that by about 35%. Is this possible?

It is true that the report comprehensively assesses a variety of different activities that could add value – agriculture (provided there is almost unlimited water), tourism at the Dead Sea and Gaza Beach, adding cell phone towers to improve coverage and increase cell phone use, quarrying stone, etc. Oddly, the benchmarks that they frequently refer to as a basis for their estimates are Israeli activity and success in each of these sectors. It must surely be possible to create wealth in several of these sectors already in Areas A and B (and Gaza). Yet, the report would have you believe that 94% of the Arab population in the West Bank can only generate GDP of $10 billion or less because Israel controls Area C.

It strains credulity. If it is at least reasonable to assume that there is some correlation between the number of people living in an area and the level of economic activity in that area, it seems highly unlikely that simply adding land to the equation could have such a dramatic effect. One can blame Israel’s control of the disputed territory up to a point, but the idea that wealth will flow from the largely barren hills of the West Bank and the beaches of Gaza when Israel leaves Area C is, frankly, quite incredible. Consider the claim in light of previous economic performances in the territories, and when billions in wasted and stolen aid has poured in for decades that have created such a bloated civil service.

Finally, the report seems to work on the assumption that change will be rapid. It has taken Israel 65 years to reach its current prosperity in many of the sectors that the World Bank thinks could be copied to Area C so, clearly, change in Palestine will be slow. The 35% addition to GDP the report predicts could actually take decades to achieve. Thus, the blaring headlines in the Guardian article should surely be toned down.

The emphasis on Area C is yet another diversion from the core Palestinian problems – excessive reliance on foreign aid that distorts their tiny economy, masks massive corruption and promotes a culture of incitement and scapegoating inconsistent with the values necessary for social and economic progress.

Nothing in the report demonstrates better the degree to which the Palestinians are themselves responsible for their situation than a paragraph which lists prospects for a tourist industry based on religious and historical sites (mostly Jewish), Dead Sea tourism, and the beaches of Gaza: (Emphasis added)

42. Tourism currently makes a meager contribution to the Palestinian economy. It contributes less than 3 percent to Palestinian GDP and some 2 percent of total employment. Following a sharp decline during the second intifada years, the Palestinian tourism industry has recovered and capacity has been expanded: the past 3 years have seen an average of more than 500,000 arrivals, with total stays of more than 1.2 million room nights per year, up from well below 50,000 arrivals in 2000-2002.

In summary, to go back to Mariam Sherman’s statement:

But, unleashing the potential from that ‘restricted land,’ –access to which is currently constrained by layers of restrictions – and allowing Palestinians to put these resources to work, would provide whole new areas of economic activity and set the economy on the path to sustainable growth.

Will it be so?

Maybe. But it will take decades if it can be done at all, and I suspect the estimates of the contribution Area C could provide are grossly overstated based on prior performance. The dismal record goes back into Ottoman times, through the Jordanian occupation, and 40 plus years that included, until the terror activities became more than Israel could bear, close integration with a far wealthier neighbor.

The issue is not the lack of Area C – it is what goes on in Areas A and B, and Gaza. Change that, and you will achieve more than the arid hills of Area C could ever provide.

CiF Watch prompts correction to Guardian claim on Gaza construction imports


In a CiF Watch post published on Dec. 28, ‘Harriet Sherwood falsely claims that “almost no” construction materials have entered Gaza’, we noted this extremely misleading, and quite confusing, passage in a Dec. 27 report by Sherwood:

“Meanwhile, Israel is to allow construction materials to enter Gaza from next week for the first time since 2007. Despite easing its blockade of the enclave two and a half years ago, it has continued to ban the import of almost all construction materials, such as cement and steel, saying they could be used for military purposes.”

We explained that the first sentence was completely untrue, while the passage (seemingly contradicting the first) highlighted in the second sentence was, at best, extraordinarily misleading.

As we noted, despite restrictions (which have recently been eased) on dual-use materials entering Gaza (items which could be used for military purposes) thousands of trucks carrying construction materials have entered Gaza, since 2010, via COGAT (Coordinator of Government Activities in the Territories).  COGAT has coordinated such shipments in conjunction with international sponsors (US Aid, the World Bank, the UN, etc.) who can guarantee that the materials are used for their original civilian intent.  

Further, during the same two-year period Sherwood is referring to, out of 268 submitted construction proposals by the PA (in conjunction with international sponsors) 235 were approved.

The new easing of restrictions by Israel – implemented as part of the ceasefire agreement with Hamas, which was brokered by Egypt – now allows building materials into Gaza for use by the private sector for the first time since 2007.

After communicating with Guardian editors, demonstrating the construction import figures, and noting that other media outlets who made similar errors had (due largely to the diligence of our friends at CAMERA), corrected their mistakes, the Guardian has corrected the original text in Sherwood’s report.

Here’s their notice, at the end of Sherwood’s piece, noting the change:

• This article was amended on 7 January 2013. The original said that “Israel is to allow construction materials to enter Gaza from next week for the first time since 2007. To clarify: limited quantities of building materials, for UN sponsored projects, were allowed to enter Gaza during that time, as was made clear in the next sentence.

A sincere thanks goes out to our followers who assisted us in contacting Guardian editors to request the correction. 


Guardian falsely claims that “almost no” construction materials have entered Gaza

Harriet Sherwood’s latest report, ‘Hamas bans Palestinian journalists from Israeli media cooperation‘ Dec. 27, took a detour from the issue indicated in the title in the penultimate paragraph.

Sherwood writes:

“Meanwhile, Israel is to allow construction materials to enter Gaza from next week for the first time since 2007. Despite easing its blockade of the enclave two and a half years ago, it has continued to ban the import of almost all construction materials, such as cement and steel, saying they could be used for military purposes.”

The first sentence is completely untrue.

The passage highlighted in the second sentence is, at best, extraordinarily misleading.

At the Kerem Shalom Crossing, every day, around 250-350 trucks bring goods into Gaza – food, electrical products, clothing, and construction materials.


Here’s a photo I took while on tour of Kerem Shalom in September, 2012.

In order to ensure that dual-use items (construction materials which could be used by Hamas and other terror groups to build fortified bunkers, military installations, etc.) COGAT (Coordinator of Government Activities in the Territories) coordinates such shipments with international sponsors (US Aid, the World Bank, the UN, etc.) who can guarantee that the materials are used for their original civilian intent.

Since 2010 (the period Sherwood is referring to), out of 268 submitted construction proposals by the PA (in conjunction with international sponsors) 235 were approved.

Such projects include housing, schools, clinics, roads, agricultural installations and other civilian infrastructure.

According to COGAT, the only ones not implemented on the ground have been those in which the sponsor didn’t have the funds.

Here’s a breakdown of the material. (The numbers cited below represent the amount of construction materials, in tons.)


Here is a further breakdown of what has been built, or is in the process of being built, in Gaza with construction materials sent since 2010, quantified above.

  • 1900 housing units completed or underway
  • 14 health clinics completed or underway
  • 42 schools (new or renovated) completed or underway
  • 22 water and sewage projects
  • 10 new roads 


And, lets not forget the five-star hotel, the al-Mashtal, which opened in 2012 in Gaza – which Sherwood herself reported on.

guardianYou don’t need to be a building contractor to conclude that an awful lot of construction material was required for these luxury accommodations.

You can see a full list of construction projects in Gaza underway or already completed, here.

Such facts and figures regarding construction materials entering Gaza completely contradict Harriet Sherwood’s claim that all, or “almost all”, construction materials have been banned from entering Gaza over the last two years.

Please consider sending a respectful email to the Guardian’s readers editor requesting a correction to Sherwood’s story.

Low Returns on 40-Year Investment in Palestinians

This essay was written by Hadar Sela and published in The Propagandist.

This year marks the fortieth anniversary of the commencement of European Union contributions to the Palestinians. The EU has beeUNRWA’s largest donor since 1971 and over the last decade has provided that organisation with almost one billion Euros. Since the establishment of the Palestinian Authority under the Oslo Accords in 1993 it has, in addition, been a major donor to that administration.

The numbers are truly staggering; the EU has pledged to provide 28.4 percent of the total humanitarian aid budget for 2011 – US $60,013,647 – making it the top contributor. That figure does not include donations from individual EU member countries or separate donations to shore up the PA budget.  In 2010, EU contributions to the PA budget as set out in the Palestinian Reform and Development Plan amounted to 199.90 million Euros. Funds donated by member states of the EU amounted to an additional 62.70 million Euros.

When combined  with the additional donations from the World Bank, the United States, Japan and the notably less significant , the total amounts of money donated (US $3.96 billion in 2009-2010) mean that the Palestinians are still the highest per capita recipients of aid in the world, even 18 years after the establishment of the Palestinian Authority.  

As Europe sinks ever deeper into financial turmoil itself, taxpayers in EU countries must be asking themselves if the tax money paid both directly to their own governments and indirectly to the EU could not be better employed in reviving their own economies and supporting unemployed and poverty-stricken residents of the EU. They may also be wondering if their 40 years of investment in UNRWA and 18 years of investment in the Palestinian Authority have actually brought any benefit to the Palestinian people. After all, throwing money at an investment which yields no returns is not financially savvy.

Not only has EU and other investment in UNRWA not solved the problem of Palestinian refugees, it has actually perpetuated it by forcibly keeping second, third and even fourth generations in permanent statelessness.

Read the rest of the essay, here.

Is Palestinian Statehood in the near future a realistic proposition?

This is cross-posted by Hadar Sela and Eli E. Hertz at the site, Myths and Facts.

There is a saying in the medical world that an x-ray is only as good as the doctor reading it. The interpretation of information differs according to pre-existing factors such as knowledge and experience, with mistakes in diagnosis having the potential to be tragic. It is true even when the given information is accurate and unquestionable, but when its reliability is not assured, precise interpretation and analysis become nearly impossible.

In December 2010, the European Union’s Foreign Affairs Council stated that it would recognize a Palestinian Arab state “when appropriate” on the basis of assessments made by the World Bank, that the Palestinian Authority “is well positioned for the establishment of a State at any point in the near future.”

In order to determine whether this assessment is correct, and therefore potentially justified and actionable, it is important to understand exactly how it came about.

The source of this assessment regarding Palestinian readiness for statehood is the September 2010 World Bank report to the Quartet’s Ad Hoc Liaison Committee which apprises on the subject of the Palestinian Authority’s progress in implementing the Palestinian Reform and Development Plan initiated in 2007. It is also known as the “Fayyad Plan” after the Palestinian caretaker Prime Minister by whom it was authored.

The international community, as represented by Quartet Members, the United Nations, the European Union, the United States and Russia, has been monitoring the progress of the three year Fayyad Plan through the reports of its representative on the ground, the World Bank, which runs a “country team” in the region.

Three basic problems emerged from the study of the regularly issued World Bank reports. The first involves methodology – the information upon which the reports are based is gathered mostly from politically biased NGOs working in the region, some of which are actually funded by countries from Quartet members. These include organizations such as B’Tselem, UN OCHA, Peace Now, HaMoked, Amnesty International, Gisha, Yesh Din and IPCRI. The World Bank uses consulting services from Ben-Or Consulting, a company associated with several of the above organizations and with connections to politically motivated groups both in Israel and abroad.

The second basic problem is that the Palestinian Reform and Development Plan is limited largely to reforms which may be termed financial, economic and administrative. Components of civil society within a functioning state such as the rights and protection of women, children and minorities, labour rights and trade unions, freedom of the press or prevention of torture are not within its scope.

Thirdly, in the approach taken towards Palestinian reform by both the Palestinian Authority and the Quartet, the subject of dealing with the ideological and religious causes of continuous Palestinian terror, is clearly absent.

Under such circumstances, the European Union’s haste in declaring itself ready to recognize a Palestinian state contrasts dramatically with its cautious approach to the accession of Turkey to its own ranks. In that case, a country already deemed sufficiently trustworthy to be a veteran member of NATO has been obliged to engage in a 10 to 15 year process of reform and overhaul of all its systems and institutions – economic, financial, judicial, political, civil and social. The process is overseen by the European Union itself and is both strictly performance-based and will have an iron-clad reversibility clause if Turkey fails to live up to its promises.Only when all criteria have been met will the subject of Turkey joining the European Union actually be brought up for vote by the existing members.

Soon after its foundation, the Quartet initiated the Roadmap which was also intended to be a performance-based process leading to Palestinian statehood and an end to the Palestinian-Israeli conflict. Unfortunately, even the first clause of the Roadmap has not been fulfilled and yet it now appears that the European Union, relying upon questionable assessments, is ready to abandon its own blueprint for the peace process in favour of a Palestinian Arab state which comes nowhere near the criteria it demands for its own members.

Read the full essay, here.

Palestinian ‘Authenticity’ overlooked by Seumas Milne

In his CiF article of January 26th, Seumas Milne lamented the passing of ‘authentic’ Palestinian leadership, much in the same spirit as his paper’s editorial of January 23rd which described the current PA as ‘craven’ and ‘weak’.  Milne’s primary complaint is that the spirit of an ‘authentic national liberation movement’ has evaporated from the PA and that dependency upon foreign funding – particularly that from the US and the EU – means that “the PA’s leaders are now far more accountable to their funders than to their own people”.

How strange then that the Guardian should choose to completely ignore this news item from the indispensable Palestinian Media Watch which indicates that the PA is still doing exactly what it always did with European and American taxpayers’ money.

Abbas gives terrorist’s family $2000

by Itamar Marcus and Nan Jacques Zilberdik

Earlier this month a Palestinian terrorist attempted to attack an Israeli checkpoint. Carrying two pipe bombs, he ran towards the Israeli soldiers, screaming “Allahu Akbar” – “Allah is Greater” – and was shot and killed before he could detonate the bombs.

Yesterday Palestinian Authority Chairman Abbas granted “the relatives of the Shahid” $2000:

“The governor of the Jenin district, Kadura Musa, has awarded a presidential grant to the family of the Shahid (Martyr), Khaldoun Najib Samoudy, during a visit that took place yesterday in the village of Al-Yamoun. The governor noted that the grant is financial aid in the amount of $2000 that the President [Mahmoud Abbas] is awarding to the relatives of the Shahid, who was recently killed as a Martyr at the Hamra checkpoint by the Israeli occupation forces.”

[Al-Hayat Al-Jadida (Fatah) Jan. 25, 2011]

Over 60% of the PA’s GNP now comes from foreign donations – mostly from the US, the EU, the World Bank and the UN.  The percentage of foreign donations as part of the annual PA budget has steadily risen in recent years. In other words, the PA is becoming more –rather than less – dependent upon aid as time goes by.  In 2000 foreign aid comprised 10.5% of the annual income, in 2005 – 22.4% and in 2007 – 35.9%.  Some of this money finds its way to Gaza in the form of transfers from the PA – including funds to pay the salaries of Fatah employees who are paid to stay at home. The Hamas regime of course has its own donor network and an up to date insight into the entire economy of Gaza can be found here.

The ‘tradition’ of siphoning off funds from foreign donations in order to finance terror was initiated by Seumas Milne’s hero Yasser Arafat. With the creation of the PA – whose financial affairs were overseen by the international community from the very beginning – a special ‘Presidential budget’ was established.  A rather laconic description given in a 2003 International Monetary Fund report on the PA’s finances stated that:

“Presidential budgets (or for heads of State) are sensitive issues in all Middle East countries and most developing countries. In most cases, information is quite opaque if at all available.”

The report went on to state (chapter V, p. 107) that:

“In the case of the PA, actual expenditures of the President’s office are published on a monthly basis, broken down by wages, operating expenses and transfer. The 2003 budget appropriated US$74 million to the President’s office (8 percent of the total budget), of which US$34 million is dedicated to “transfers.” The President assumes the prerogative of providing aid to various organizations and individuals…

…However other claimants and organizations are part of politically favored networks who should not be getting such grants under any criterion.”

Despite the subsequent (mainly post-Arafat) reforms within the PA, the tradition of ‘Presidential transfers’ continues, albeit on a smaller scale as can be seen in the PMW report above.

I personally have considerable difficulty with the knowledge that EU and US taxpayers’ money has been  used to finance terror attacks upon Israeli citizens and reward the families of ‘martyrs’ and I think that it is high time that the World Bank, which supervises the Palestinian Reform and Development Plan, was called to give both past and present accountability on this subject, along with the donor countries themselves.

Seumas Milne, however, will most likely be delighted to learn that the spirit of the ‘authentic national liberation movement’ he finds so inspiring lives on.