Select Committee on International Development Second Report

1 Introduction

1. The Occupied Palestinian Territory (OPT) has considerable economic potential, but the conflict with Israel over more than 50 years has severely constrained its development. The period following the Oslo Accords brought relative peace and prosperity. But these did not last; a cycle of violence, intifada (resistance), and Israeli closures since September 2000 has almost destroyed the Palestinian economy and led to a dramatic increase in poverty. The Department for International Development (DFID) and other donors have responded with emergency measures to prevent a humanitarian catastrophe. Our report sets out to examine the constraints under which development work has to operate and seeks to answer the question—what development is possible in such a situation?

2. This report is not an analysis of the peace process, nor is it a discussion of the legitimacy of Israeli or Palestinian statehood. We realise that political progress is necessary for genuine development to take place. At the time we visited the OPT in October 2003, peace negotiations had broken down, and the Roadmap appeared at best to be stalled. Politicians have a deep belief in "process". The belief that "process" plus participation by politicians, plus time will result in a benign solution. The Middle East Roadmap is such a process. The intention is that if the parties follow the "process" laid out in the Roadmap over time, it will lead to a solution to the benefit of all the parties. The danger is that politicians can cling on to the hope of a "process" succeeding, even when the reality of that "process" has long since vanished. The reality is that at the present moment there is no "peace process" in the Middle East. The Roadmap still exists as a statement of intent, but from all that we heard nothing meaningful is being done to implement its provisions.

3. It is time for politicians in Europe and the United States to recognise the realities on the ground. There are, within Israel and the OPT, two groups of people—the "occupiers" and the "occupied". From the Israeli perspective, they have offered a peaceful way forward on numerous occasions in recent years, starting with the Oslo process. From their perspective, at no time have the Palestinians been willing to take forward anything that has been agreed. In particular, they have totally lost confidence in Yasser Arafat's ability either to take forward a peace process, or to curb the terrorist activities of Hamas, Islamic Jihad and other groups. Israel has suffered over a hundred suicide bombings with tragic loss of life and there have continued to be attacks on settlers. It is clear that the Government of Israel (GOI) is no longer prepared in any way to negotiate with Yasser Arafat. Nor are they prepared to negotiate with any Palestinians who themselves are in contact with Yasser Arafat. In other words, the GOI is only prepared to negotiate with a Palestinian leadership that is clearly and unequivocally independent of Yasser Arafat. Such leadership is unlikely to emerge for the foreseeable future, for a number of reasons.

4. Ironically, the repeated attacks by Israeli Defence Forces (IDF) on Palestinian communities in Gaza and the West Bank, the demolition of houses and flats and the building of the security fence, have all tended to reinforce the image of Arafat seemingly in the eyes of the huge majority of Palestinians as being the "Father of the Nation". Moreover, it is difficult to see how a new Palestinian leadership could emerge without democratic elections to a new "Authority." The GOI have made it clear that they are not willing to help facilitate such elections which would necessitate some freedom of movement between the various occupied enclaves of the West Bank and Gaza. It is therefore difficult to see how any alternative, democratically-valid Palestinian leadership is going to be able to emerge for the foreseeable future.

5. The Palestinian Authority (PA) has got itself into the worst of all possible worlds. It neither de facto, nor de jure, controls any territory whatsoever. It is incapable of delivering any meaningful public services. A large part of its income is dependent upon donor contributions. A large number of the Palestinians in the West Bank and Gaza look to UNRWA for humanitarian food relief and medical support. The PA has clearly failed in preventing Hamas and other Palestinian terrorist groups from continuing to perpetrate terrorist actions against Israelis. The IDF have deliberately destroyed every PA police station and prison so even if the PA were unequivocally willing and able to identify and arrest members of terrorist groups, they have no means of processing or holding such detainees.

6. From the perspective of the Palestinians, life under occupation is becoming increasingly oppressive and increasingly inhuman. Rates of malnutrition in Gaza and parts of the West Bank is as bad as anywhere one would find in sub-Saharan Africa.[1] The Palestinian economy has all but collapsed. Unemployment rates are in the region of 60-70% and many of those who are employed are dependent upon NGOs or international relief organisations for employment.

7. From the Israeli perspective, whilst the suicide bombings and attacks on settlers continue, they are understandably determined to prevent any such further attacks, loss of life and suffering on Israelis. It is clear that the GOI, and many Israelis, now see every Palestinian as a potential "suicide bomber". The objective of the occupiers is to ensure the minimum possible freedom of movement by Palestinians and are thus hoping to reduce, as far as is humanly possible, the risk of "suicide bombers" leaving Gaza for the West Bank to perpetrate acts of murder in Israel. The lack of freedom of movement clearly has the most serious impact on the day to day lives of Palestinians, their ability to earn an income, and their quality of life. It is not only their inability to leave Gaza or the West Bank, but the fact that for sometimes days on end they are subjected to 24-hour curfews where they live, so that their lives, freedom of movement, ability to work, go to school, farm their land, or undertake any usual human activities are all subject to the wishes and controls of the IDF.

8. The GOI, and doubtless the overwhelming majority of people in Israel, clearly feel that the Palestinians have failed to agree a settlement peacefully. From their perspective, some Palestinians are continuing to perpetrate acts of terror and violence, which in addition to resulting in death and injuries to innocent Israelis, inevitably has had an impact on tourism and other economic activity in Israel. They are content, therefore, for the IDF to bear down upon the Palestinian population with all the force that they consider necessary in the hope that in this way the Palestinians will unequivocally renounce violence and seek a peaceful settlement. Whilst it is clear that the overwhelming majority of Palestinians simply want to get on with their lives like any other human beings in the world, and that many Palestinians wish to see a peacefully negotiated settlement, it is still tragically the case that for a number of Palestinians, the harder the IDF bear down on them, the more they feel obliged to resist by force of arms with a continuing downward spiral of violence for all concerned.

9. Informal meetings have been held in Geneva, the result of which was a "Geneva Accord", signed at the beginning of December 2003.[2] The Accord has attracted wide support outside the region, and may act as a catalyst for further negotiations. But nearer to the heart of the conflict, the Accord is seen as suggesting solutions that neither leadership will accept. The challenge for Palestinians remains to achieve a just settlement through the peace process and with it the creation of a viable, democratic Palestinian state. Without peace, there can be no prospect of economic growth and an improved quality of life.

10. Development and politics in the OPT are inseparably intertwined. But there are key development issues and questions. These include: the humanitarian situation and its causes; how to deliver humanitarian relief; how obstacles to development have shaped the provision of development assistance; how donors can support the peace process through institution building; donor harmonisation; and Palestinian-led development. At the same time, there has to be a sense of realism about what development assistance can achieve. The World Bank told us that removing the "access controls" imposed by the Israelis would have increased real GDP by 21%, whereas a doubling of development assistance—without easing closure—would only reduce the number of people living in poverty by 7% by the end of 2004.[3] The situation in the OPT, in other words, is not one which donor assistance can resolve. There is not a food shortage in the OPT, but people are suffering from malnutrition as a result of the difficulties in obtaining food. Movement restrictions adversely affect both the suppliers and buyers of food and economic deterioration and unemployment arising from closure mean that people do not have the money with which to buy food.

11. Our remit is to monitor and scrutinise DFID's work. In the OPT this includes the assistance which DFID provides through the United Nations Relief and Works Agency for Palestinian refugees (UNRWA) and the UK's contribution to the European Union's (EU) support to the PA. Since the start of the Oslo peace process in 1994, DFID's bilateral programme has grown from £3 million to £20 million per annum.[4] In 2002/03 DFID gave £15 million in bilateral aid to support Palestinian civil society and the PA.[5] In the same period DFID provided £18.8 million multilaterally to UNRWA.[6] Between 1994 and 2002 the UK provided £190 million through the European Commission (UK share 19%) and between 1993 and 2002 the UK provided £12 million through the World Bank (UK share 5%).[7] To put this in some context DFID's programme in the OPT, including UNRWA contributions, is the UK's 15th largest bilateral aid programme. In 2003, total assistance amounted to £73 million. DFID's aid programme to the OPT is aimed at reducing poverty amongst Palestinians and building institutional capacity during the process towards statehood.[8]

12. We are grateful to all those 19 individuals and 39 organisations who submitted written evidence to the inquiry.[9] At Westminster, we took oral evidence from: DFID and the Secretary of State for International Development, the Rt Hon Hilary Benn MP, the European Commission, Christian Aid, Oxfam, Save the Children Fund, the Welfare Association, the Israeli Committee Against House Demolitions, the Parents' Circle, the Simon Wiesenthal Centre and Ilka Schröder MEP. Seven Members of the Committee visited the West Bank and Israel in October 2003. During the visit we met the Palestinian Authority and Israeli government officials, UNRWA and other UN agencies, as well as NGOs and countless ordinary Palestinian people. No amount of evidence taking at Westminster can equal the impact of experiencing the situation in the OPTs at first hand. Finally, we would like to thank our specialist advisers: Youssef Hajjar of the Arab Resource Collective and Karma Nabulsi of Nuffield College, Oxford.

13. The report begins by describing the development context in some detail. The reality on the ground affects the type of development which can be carried out and the way in which donors can operate. Setting out the impact of Israeli security measures on Palestinians and their access to services illuminates the general nature of the development challenges, the specific challenges to DFID's development objectives and the level at which donor assistance is needed. We then discuss the Palestinian Authority and how donors can work best with it. We describe the Palestinian economy and the reasons why it has been so vulnerable to the impact of Israeli occupation and security measures. In the later chapters we discuss in detail the specific challenges to development and how donors should work to meet them.


14. The Occupied Palestinian Territories of East Jerusalem, the West Bank, and Gaza Strip cover an area the size of Cumbria (see MAP 1), and have a population of around 3.5 million.[10] Ninety-seven per cent of the Palestinian population are Muslim and three per cent are Christian.[11] Half of the population is under the age of eighteen.[12] The OPT would, under normal circumstances, be categorised as middle rather than low income.[13] Palestinian society is well-educated with a sizeable middle class, and a tradition of a strong and vibrant civil society.[14] In the past three years an escalation in the level of violence has developed into an intifada by the Palestinian population against Israeli occupation. Militant groups have sent suicide bombers to kill civilians inside Israel, and in the OPT many Palestinian civilians have been killed by the IDF. The security measures imposed by Israel have brought about economic collapse and soaring poverty levels in the OPT.

Key actors

15. From the start of the Israeli occupation in 1967, the Israeli Authorities assumed responsibility for the provision of basic health, education and other municipal services. These responsibilities were then handed over to the PA as part of the implementation of the Oslo Accords in 1993. Before the creation of the PA, there was no functioning Palestinian administration or institution of government. As a consequence, civil society developed to fill the gap in service provision and local organisation. There has also been a proliferation of international donors and NGOs in the OPT. The USA and the EU are key donors. The United States Agency for International Development's (USAID) funding for the West Bank and Gaza between 1993 and 2002 totalled approximately $1 billion, making it one of the main bilateral donors.[15] Between 1994 and 2000 the EU provided approximately €1 billion in grants and a further €500 million in contributions to UNRWA.[16] The International Financial Institutions (IFIs) play a prominent role. The World Bank's analysis of the Palestinian economy has shaped PA economic policy.[17] The IMF is also closely involved with monitoring and guiding the PA's fiscal reforms.[18]

Status of the Occupied Palestinian Territories in international law

16. International law provides the legal framework for the roles and responsibilities of the two sides and the international community. Early in 2002 Israel reoccupied those areas which had previously been under PA control. The situation in the OPT has now resumed its character of pre-Oslo military occupation and is thus framed in terms of international humanitarian law, and in particular the application of the Geneva Conventions of 1949.[19] Israel has specific responsibilities and obligations to the Palestinian population under the 4th Geneva Convention.

17. The GOI rejects this interpretation. It argues that prior to its assumption of the role of occupying power in 1967 the territories were legally under occupation by Egypt and Jordan. It maintains that the 4th Geneva Convention applies to sovereign territories only and not therefore to the West Bank and Gaza. As Alan Seatter, of the Directorate General for External Relations, European Commission, told us:

"We believe that under the Geneva Conventions it is the responsibility of the occupying power to look after the civilian population in areas they are occupying. Israel does not agree with this interpretation. As colleagues from DFID said, and there have been many representations to Israel about this at many different levels, they do not accept they are subject to these provisions".[20]

Israel's refusal to accept its responsibilities under the Geneva Convention does not, however, relieve the international community from the constraints and conditions of its application in dealings with Israel as an occupying power. All High Contracting Parties, signatories of the Convention, of which the UK is one, have obligations to respect and ensure respect of the Convention as it applies to the OPT, and are bound by its regulations.

Israel's commitments

18. Although Israel does not accept the applicability of the Geneva Conventions, it has signed an agreement to facilitate the activities of international organisations. The agreement followed a visit from the UN Secretary General's Personal Humanitarian Envoy, Catherine Bertini and set a minimum standard on humanitarian provision in the OPT, which included commitments on health, water and access for humanitarian workers.[21] These "Bertini Commitments" serve as a useful additional framework for negotiations with the Israeli authorities on the delivery of basic humanitarian services. However, we agree with the UK Government that the Geneva Conventions apply to the Israeli occupation. The 4th Geneva Convention should remain the standard by which the GOI should perform in the OPT. The UK Government has its own obligations to uphold the Convention, and monitor breaches of the rules of the Convention as regards to the civilian population.

1   Ev 86 Back

2   The Geneva Accord is an unofficial blueprint for peace. The basic framework includes proposals on the right of return of refugees, settlements and the division of Jerusalem. Back

3   Twenty Seven Months - Intifada, Closures and Palestinian Economic Crisis, An Assessment, World Bank, May 2003 Back

4   Ev 51 Back

5   Ev 58 Back

6   Ev 58 Back

7   Ev 59 Back

8   Ev 51 Back

9   A full list of those who submitted evidence is available in Volume II of this report (HC 230-II) Back

10   FCO, Country Profile, October 2003 Back

11   Ibid. Back

12   Ev 241 Back

13   A middle-income country is defined as one with a per capita income of between $761 and $9,360. However, middle income does not necessarily mean without poverty: there are over half a billion people living in poverty (on below $2 a day) in middle-income countries. See: Eliminating Global Poverty: The Middle-Income Countries, Department for International Development, November 2001 Back

14   Ev 250, Q 94 Back

15 Back

16   Ev 117 Back

17   World Bank, Op. Cit. May 2003 Back

18   West Bank and Gaza: Economic Performance and Reform under Conflict Conditions, International Monetary Fund, September 2003 Back

19   For example: Ev 80, Ev 89, Ev 126, Ev 135, Ev 145, Ev 166, Ev 240 Back

20   Q 61 Back

21   See OCHA, Humanitarian Monitoring Report, Commitments made by the Government of Israel to Ms Catherine Bertini, Personal Envoy to the Middle East for the Secretary General, April 2003 ( See also Personal Humanitarian Envoy of the Secretary General (Catherine Bertini)-Mission Report, August 2002, United Nations (copy placed in the library) Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2004
Prepared 5 February 2004