Memorandum submitted by the Board of Deputies
of British Jews
1. The Board of Deputies of British Jews
welcomes the opportunity to make this submission to the Select
2. The Board is the representative body
and voice of the British Jewish Community. It was founded in 1760.
As an organisation, the Board has a responsibility to act upon
the concerns articulated by members of the community. One of the
core functions of the Board is to express the solidarity of British
Jews with the people of Israel. It is in this context that members
of our community have expressed concerns over the issues raised
by the Select Committee's current inquiry.
3. The Board of Deputies does not itself
profess expert knowledge of the Palestinian economy, its infrastructure
or its development needs. But as British citizens and taxpayers,
members of our community consider that they are entitled to assurances
that public funds which are made available for the purposes of
development assistance in the Palestinian territories are properly
used and accounted for. In recent years there has been abundant
evidence that funds provided to the Palestinian Authority from
EU sources have been diverted for improper or criminal purposes,
either to support terrorism or to enrich the leadership of the
Palestinian Authority. Terrorism and corruption are embedded in
the culture of the PA, and there is therefore a special responsibility
on all agencies which support the Palestinian economy in any way
to ensure that funds made available for legitimate development
needs are not diverted for improper or terrorist purposes. In
the view of the Board of Deputies, the Select Committee cannot
examine objectively the availability of development assistance
in the Palestinian territories without assessing the extent to
which at least a part of the assistance provided over the past
years has been siphoned off for other nefarious purposes.
4. In this connection, the Board of Deputies
welcomes that fact that B'nai B'rith UK has submitted a recent
publication of B'nai B'rith Europe entitled "The Palestinian
Authority: Where Does the Money Go?
" written by Rachel Ehrenfeld from the New York-based American
Center for Democracy.
5. The Board of Deputies would also wish
to draw the Select Committee's attention to a further paper by
Rachel Ehrenfeld entitled "Reforms in the Palestinian
Authority: A Reality Check".
6. In addition, the Board would draw attention
to the IMF's report of 15 September 2003 entitled "West
Bank and Gaza: Economic Performance under Conflict Conditions".
This is a detailed examination of Palestinian economic performance
in recent years. The report is available at www.imf.org/external/pubs/ft/med/2003/eng/wbg/wbg.pdf
7. We would specifically like to highlight
a few items:
(i) The level of funds that did not pass
through the Ministry of Finance, instead being spent directly
by the collecting ministry, or diverted to other accounts, such
as one under the control of Yasser Arafat (pp 88-89).
(ii) "All in all, excise tax revenue
and profits from commercial activities diverted away from the
budget may have exceeded US$898 million" (p 89, chart on
(iii) There is significant over-employment
in the civil service (pp 91-93).
(iv) Expenditure management and control contains
weaknesses (pp 93-94).
(v) Prior to the Intifada. . . "the
economy grew at a remarkable rate" increasing the standard
of living for the Palestinian population. The onset of the Intifada
did see a "major decline" in the Palestinian economy,
however it "proved surprisingly resilient. And by early 2003
there were already signs that the downward trend had been stopped
and that the economy was beginning to stabilise" (p 11).
(vi) The IMF alludes to a linkage between
the withholding of funds to the Palestinian Authority and their
promises to implement audit reform (pp 71-72).
8. All these points appear highly relevant
to the management of donations to the Palestinian Authority and
their diversion for improper purposes.
21 Copy placed in the Library. Back
Copy placed in the Library. Back