Palestine – Pouring Money into a Bottomless Pit

June 2, 2013 by David Singer
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US Secretary of State John Kerry at a meeting of the World Economic Forum in Jordan this week proposed investing another four billion dollars in trying to resolve the 130 years old Jewish-Arab conflict…writes David Singer.Why these billions would succeed – when tens of billions given at previous international aid meetings failed – remains a mystery.

The belief that economic prosperity for the Arabs living in the West Bank will bring a lasting end to the conflict has proved worthless in the past and will continue to do so in the future.

When the international community pledged $7.4 billion dollars at the Paris Donors Conference in December 2007 to achieve the creation of the two state solution by the end of 2008 – my article – “Paris Produces Palestinian Funding Frenzy” – made the following observations:

“Creating two separate States for one Arab population living in the territorial boundaries of former Palestine always was an artificial invention that had no basis in history, geography or demography. It was a fiction contrived by the international community at a particular time to solve a particular problem.

There are two questions that remain unanswered – when will the international community stop pursuing this fiction and when will they turn off the money tap trying to make it happen

Solutions – other than another Arab State – are possible and achievable.

Pursuing those solutions – and throwing money at them in amounts similar to the Paris pledges – have a far better chance of success than the continued promotion of a 70 years old concept that has well passed its 1967 expiry date

Surely the time is fast approaching for these donors to cut their losses and simply say “enough is enough”.

The Paris Conference final communique declared:

“The Paris Conference has made evident the high degree of confidence of the international community in President Abbas and PM Fayyad’s reform and development programme”

Arafat has since then repudiated the Oslo Accords and the Bush Roadmap.

Fayyad is no longer Prime Minister – having left his reform and development programme in tatters as the International Monetary Fund makes clear in its report released in Brussels on 19 March 2013:

“the economy has deteriorated markedly and the public finances are on an unsustainable track. Economic growth has weakened, the unemployment rate has increased, and the fiscal position has deteriorated to the point where core government functions have been affected, with ongoing cash rationing eroding public financial management institutions. Unsustainably high fiscal deficits combined with aid shortfalls are resulting in a large buildup of arrears and increased bank borrowing in the context of a slowing economy. Worryingly, with donor aid receding, the government‘s ability to finance large deficits is becoming more and more circumscribed. Thus, arrears, many with private suppliers, are causing them to become progressively more reluctant to provide the PA with goods and services while also causing distortions in the private sector. Arrears in the form of delayed or partial payment of wages risk social unrest and strikes, while additional recourse to the banks would further increase banking sector vulnerabilities.”

Yet just two months after this alarming IMF report – Secretary of State Kerry and the 300 Israeli and Palestinian industrialists and entrepreneurs gathered at the World Economic Forum are still prepared to keep this rapidly sinking fiction afloat – no matter how much it costs.

No doubt they are well intentioned in their desire to see the two state solution concluded between Israel and the PLO – but they completely ignore the following political realities:

  1. Palestine is an economic basket case – run by an unelected and unconstitutional self styled head of State – Mahmoud Abbas – who refuses to sit down and negotiate with Israel without pre-conditions.
  2. Elections have not been held since 2006 and there is no prospect in sight for the people to have their say as to who should govern them.
  3. Hamas and the PLO remain at loggerheads allowing the West Bank and Gaza to become separate fiefdoms under different power structures that brook no opposition.

In this mire – even if Abbas returned to the negotiating table – the negotiations would founder on the following two demands made by Israel – which Abbas refuses to concede:

  1. That Israel be recognized as the Jewish National Home as determined by the San Remo Conference, the Treaty of Sevres and the League of Nations.
  2. That any Palestinian Arab State be demilitarised.

Israel’s raison d’etre and right to live in freedom and security free of any future Arab threats are non- negotiable.


Abbas – on the other hand – has made it clear that:

  1. He will never agree to abandon the right of return for millions of Palestinian Arabs and their descendants to what is now Israel.
  2. He will not countenance Jews remaining as equal citizens with Palestinian Arabs in any Palestinian state

These demands can never be accepted by Israel.

So Senator Kerry’s four billion dollars will only serve as a pinprick in the demand for continuing financial aid to prop up entrenched institutions of power bringing little relief to a long suffering population which could have had its own independent state in 1937, 1947, at any time between 1948-1967, in 2000/2001 or 2008.

Apparently this never ending game seems set to continue – as are the casualties of terrorism, violence and social upheaval.

Jordan – not the PLO – still remains the key to ending the conflict.

Continuing to pour money into the bottomless pit represented by Abbas is certainly not the answer.

David Singer is a Sydney Lawyer and Foundation Member of the International Analysts Network

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