Daily Israel Report

Op-Ed: Make Money, Not Peace

The PA's biggest incentive for avoiding the peace process is also one that could be changed.
Published: Thursday, September 20, 2012 8:06 PM



For the mired Israeli-Palestinian ‘peace process’ commentators vicariously blame four things:

(1) The antipathy of Middle East rulers to a Jewish flag in the neighborhood;

(2) Israeli settlement building in the ‘West Bank’;

(3) Israeli ‘occupation’; and

(4) Arab-Palestinian insistence on the demographic bomb called ‘right of return,’ to which they look to vanquish the Jewish state by other means.

These four peace blockers omit what? Arguably they overlook the most blameworthy thing of all – money. Buckets of free money predispose PLO and Hamas leaders not to make peace, on top of the four other inhibitors. A

nd why should they? Search the planet for a political leader who would disturb a state of limbo to make peace, if it meant turning off a money tap. Eighteen billion dollars of bounty, with hardly a string attached, has gushed from taps in Gaza City and Ramallah. That’s the sum only from Western donors, during the period 2000 to 2010. What the Arab league splashed on Arafat and lately Abbas would be anyone’s guess.

Largesse will never incentivize people to get off their bums. Ask the World Bank. Its report in July 2012 opined that “the Palestinian economy cannot sustain statehood as long as it continues to rely heavily on foreign donations.”

So on what did the Palestinian Authority spend eighteen billion dollars?

Some of it went to pay 140,000 workers lucky enough to swell the payroll of the PA ‘government.’ These workers are the breadwinners for a third and more of the Palestinian population. Many of them work for the security force, which employs 58,000, or 41% on the total payroll. They are mostly Fatah members, but ‘security’ carries a meaning sufficiently broad to allow militants of the Al-Aqsa Martyrs Brigade, Islamic Jihad and other groups to draw a salary.

And even if they happen to be behind bars, still they receive their stipend. At this time Abbas is paying around $54 million (6% of the PA’s budget) annually to ‘political’ prisoners, a term which includes convicted murderers. In the upside down scheme of things the political prisoners never go short, while the financial crunch which has caught up with the PA often leaves teachers and health workers waiting for their money.

Another part of the $18n billion went into ‘development aid’ though what that means depends on what Abbas and his cabinet cronies decide it should mean. The balance of the money has gone down a few deep pockets.

“Chronic Kleptocracy – Corruption within the Palestinian Political Establishment” was the title given to a hearing of the House Committee on Foreign Affairs held in July 2012. Analysts testified before Congress on crony capitalism, endemic corruption, distortions of the market and other malpractices

Mahmoud Abbas and sons Yasser and Tareq have milked the Palestine Investment Fund for all its worth. The PIF was established in 2003 as an independent investment company, to strengthen the local economy through key investments, while maximizing long-run returns for the people of Palestine. Home made apple pie stuff, but off balance sheet, the picture looks rather different.

One of the sleaziest cases involved US loan guarantees meant for Palestinian farmers and other small to mid-sized businesses being diverted to a mobile-phone firm backed by the family of Mahmoud Abbas and Gulf investors.

Steve Chabot testified at the hearing that Abbas, like predecessor Yasser Arafat, has used his position to line his own pockets, along with those of favoured cohorts.

In Gaza foreign aid is the economy. Under the PLO, much of this aid came from the US and Europe, but when Hamas won control, the Arab League was forced to step in. Iran on its own has become an important donor, funding the Hamas government to the tune, according to Reuters, of $300 million per year.

In April 2012, Hamas approved a budget of $769 million, up from $630 million in 2011. Since there can hardly be tax revenue from an economy with almost no taxpayers, $700 - $800 million per annum would be the extent of no-strings attached foreign support of ‘Hamastan.’

On what, and on whom, the money is spent no one exactly knows, and cares even less.

There’s a rather important lesson here.

Until the money tap is turned off no power on earth would impel super-rich, unaccountable leaders to smoke the peace pipe with Israel.