Select Committee on International Development Written Evidence

Memorandum submitted by the British-Israel Group (BIG)


  The British-Israel Group (BIG) is an Israel-based non-profit association for 35,000 British expatriates living in Israel. Israelis of British origin do not form a politically homogenous group in terms of Israel's internal politics, but rather represent a cross-section of Israeli society; right and left, religious and non-religious. However, while they do not have any specific internal political bias, our members do share a pride in Israel's rebirth in its historic land, strong support for the right of the State of Israel to peace and security, and growing concern over the misrepresentation of Israel's case by some segments of the media in Britain.


1.   The effectiveness of aid from UK and EU sources on Palestinian poverty levels, how it is targeted and what could be done to prevent it from being wasted or destroyed

  BIG Input: Aid from the UK and EU is targeted through three major channels: the PA, UNRWA and NGOs. The effectiveness of each of these routes is described below:

    —  PA: It has been documented elsewhere (most recently by the latest IMF report "Economic Performance and Reforms under Conflict Conditions,") how the PA channels much of this aid to its "security forces", a further 8% serves as Arafat's personal slush fund, and much of the funds for education go toward incitement and raising a new generation of "shaheeds". Even the monies earmarked for sport go to run a league where the teams are named after suicide bombers (Al Ayyam, 21 September 2003). Thus the PA is part of the problem and not part of the solution. In terms of the UK effort to alleviate poverty in the territories, funding the PA is clearly the least efficient route. To the extent that the military actions of the PA's various military arms exacerbate the conflict, it could be argued that funding the PA is not merely inefficient but is also counterproductive.

    —  UNRWA: As detailed in UNRWA's submission to this committee, the bulk of UNRWA's funding does go in direct support to the poor. The problem with UNRWA is not its lack of devotion to the poor but with its over-devotion to its organisational self-preservation. Whereas the UN High Commission for Refugees has worldwide responsibility for refugees and has dealt with the re-housing and re-settlement of millions of refugees worldwide since the 1940's, UNRWA has done the opposite. Whereas UN policy worldwide is to resettle refugees where "refugee status" only lasts for one generation, UNRWA defines all descendents of Palestinian refugees as refugees as well and tries to maintain their refugee status indefinitely. For this reason the UN maintains two parallel refugee organizations, one for Palestinians (UNRWA) and one for the rest of the world. Thus the refugee status of Palestinians is maintained indefinitely by UNRWA, thereby perpetuating the conflict rather than trying to solve it (see Appendix A). For this reason alone, the UK should not provide funds via this organisation.

    —  NGOs: NGOs are the vehicle of choice to deliver direct aid against poverty to the villages and neighborhoods where it is needed. However, not all NGOs are alike and so the choice of which NGOs to support should be made judiciously. As a general rule, the "local committee" type of NGO is truly dealing with humanitarian aid in a specific area and should be supported. Those Palestinian NGOs that need to be reviewed more critically are those which are national in scope and headquartered in Ramallah. These range from being virtual arms of the PA to completely genuine aid organizations. A useful criterion in distinguishing which national-level NGO falls into which category is the readiness of that NGO to sign the USAID declaration that they do not divert any funds to terrorism (See "Palestine Media Watch" report in Appendix B for a partial list of those not prepared to sign). Lastly, the non-Palestinian NGOs such as Oxfam and Christian Aid are a relatively inefficient means of funding the local NGOs mentioned above. Oxfam for example lists among its partners a Palestinian organization that refused to sign this USAID declaration, and many of Christian Aids partners (listed on their website) are political organisations which spend the funds they receive on political propaganda instead of alleviating poverty, in a move that must surely place Christian Aid in violation of its charitable status.

  In summary, channeling UK funds though local Palestinian NGOs is the most efficient and effective means of alleviating poverty in the territories. However, the methods and organizations via which this aid is channeled to those organizations should be reviewed, and only apolitical organizations entrusted with this important task.

2.   The impact on Palestinian trade, employment and economic development of customs duties and taxes, and controls on the movement of goods and people at Israeli ports and airports and points of entry to the West Bank and Gaza

  BIG input: As Israel has the kind of efficient transportation and tax systems typical in first-world economies, the PA made good use of these resources in the years prior to the breakdown of the Oslo process, to the detriment of the development of the PA's own Gaza port. When the PA reneged on the Oslo process in September 2000 and effectively declared war against Israel, its access to these resources naturally became more limited. It is illogical for the PA to expect that Israel will continue to pursue economic integration with it in the face of continued terrorism. On the assumption that this terrorism will continue, the international community should place an emphasis on the development of alternative port facilities, particularly in Gaza and a land route from the West Bank to Jordan, so that the two economies can be effectively disengaged.

3.   The impact of the wall of separation for Palestinian farmers and for employment, movement of people and delivery of humanitarian assistance.

  BIG input: In the medium and long term, the impact of this security fence (it is a misnomer to call it a wall as only 5% of it is a wall) will be to greatly improve the freedom of movement of Palestinians within the territories. Currently, in order to prevent terrorists crossing the "green line", the Israeli Army has been forced against its will to re-enter the territories and restrict the movement of terrorists and armaments at the local level, causing considerable inconvenience to all. Once the security fence is complete, the hope is that there will be no further cause to place roadblocks at the local level to prevent Arabs from smuggling in explosives using ambulances, or concealed about their bodies, etc., and thus the overall freedom of movement for the Palestinian populace will be greatly improved. The establishment of this fence represents a major victory for the PA, as Israel had not intended to relinquish land to which it has historic rights other than within the framework of a true and lasting peace.

4.   The control that the network of settlements in the occupied territories have over the basic conditions for the development of the Palestinian economy: agricultural land, water, movement of persons and goods, environmental impacts

  BIG input: Israeli settlement in the territories in the period 1967 to 1993 provided a major spur to the previously moribund economy in these areas, when these territories were illegally occupied by Jordan and Egypt. The Jordanian occupation of the West Bank was recognized by only two countries (UK and Pakistan), whereas only Pakistan recognized Jordanian sovereignty over Jordanian-occupied East Jerusalem. Even though these territories were forced upon Israel in a war for Israel's very survival, Israel undertook responsibility for the economic progress of the inhabitants, and statistics show that Israel was very successful in this task. The 1968-93 Central Bureau of Statistics document "Demographic Characteristics of the Arab Population in Judea and Samaria", details the rapid improvement in living conditions in the territories during this period. Examples of relevant statistics from this report include: ". . . infant mortality has declined from approximately 35 deaths per 1,000 live births in 1968, to 18.1 in 1991", "Washing machine ownership in the Gaza Strip went from 3% (in 1967) to 91% (in 1992)" ( With the onset of the Oslo accords and the arming of the PA in 1993, the latter set about systematically attacking the access roads to the Jewish villages that had been established in the territories and had largely (until that point) enjoyed friendly and economically productive relationships with their Arab neighbors. From that point onwards, due to the PA policy, these peaceful Jewish villages ceased to be a contributory factor in the Palestinian economy. When the PA reneged on the Oslo agreement by launching the "second intifada" in September 2000, safeguarding the free passage of the residents of these villages became an Israeli priority and thus, in an "own goal", the PA's actions led to the restriction of free movement of the Arab residents of these areas.

5.   The accountability of Palestinian government institutions and the technical capacities of the public and private sectors to build an autonomous and viable economy

  BIG input: As has been widely reported, including in the recent IMF report cited above, PA government institutions have been notoriously unaccountable, even to the extent that hundreds of millions of Pounds are entirely unaccounted for. As the public sector, including the major monopolies, is controlled by the PA, this sector is by definition unable to assist in the task of building an "autonomous and viable economy". This leaves the private sector as the only realistic engine for economic growth in the territories. The term "autonomous and viable" implies that the economy in this very small geographical area really can or should be autonomous; something which has never yet happened. Until 1967 these areas were an integral part of larger economic units—the West Bank as part of the Jordanian economy and the Gaza Strip as part of the Egyptian economy—and since 1967 they have been part of the Israeli economy. With the construction of the security fence nearing completion, the period of integration into the Israeli economy is coming to a close and thus the only way forward for the economy in the territories is tighter economic integration with the adjoining Arab countries. To this end, the private sector should be encouraged to establish industrial zones just across the Jordanian and Egyptian seam-line, as per the maliquadoras on the US-Mexico border which have been so successful in promoting economic growth and alleviating poverty in Mexico. The UK and EU should assist the World Bank in providing grants to private sector businesses to establish such factories.

6.   The role of civil society, including NGOs, in ensuring a broad popular participation in the development of Palestinian society

  BIG input: As per BIG's input to issue 1 above, we favour the extensive use of local Palestinian NGOs in fostering broad participation in the development of Palestinian society. To prevent the misuse of funds, these NGOs should be closely monitored and forced to give strict financial accounting to the funding bodies. In particular, any diversion of British or EU funds by such NGOs to incitement or terrorism should cause the immediate cessation of their funding; with a watchdog organisation being specifically appointed for this purpose.

7.   Priorities for UK aid through bilateral and multilateral channels to strengthen the infrastructure of Palestinian development

  BIG input: The determination of priorities for UK aid should arise from an anticipation of the likely ramifications of the completion of the security fence. The completion of this fence will, on the one hand obviate the need for all the roadblocks and other impediments to free movement of people and goods. On the other hand, the revenue currently enjoyed by day labourers working in Israel will probably be sharply curtailed. Thus the infrastructure of the Palestinian economy needs to undergo a structural change in order to orient itself towards fuller integration with the Jordanian and Egyptian economies. Priorities for UK aid should include transportation projects (roads, railways, etc) for facilitating this integration, and the provision of loans, guarantees and micro-credit to Palestinian entrepreneurs participating as contractors in these infrastructure projects.

8.   The role of aid in supporting political solutions to the conflict

  BIG input: Until now, much of the aid provided by the international community, in particular the funding of the PA and UNRWA, has hindered progress toward political solutions. The funding of the PA has enabled the PA to institute not only terrorism on an unprecedented scale but also to raise a younger generation schooled in hate (see Appendix C and the other material on the Palestine Media Watch website: As described above, UNRWA's contribution to prolonging the conflict is the maintenance of the refugee problem as a permanent obstacle to peace. Likewise, much of the funding to European-based NGOs is channeled to partners who disseminate one-sided political propaganda, thereby stimulating continued hatred of Israel and adversely affecting the chances of a political solution to the conflict. To give one example among many, Christian Aid supplies funds to Palestine Monitor which, via its website, disseminates a totally inaccurate historical analysis of the conflict in which no mention is made of the Arab rejection of the 1937 partition plan or the Arab rejection of the 1947 UN partition resolution, or of the fact that 5 Arab countries invaded the area immediately the British Mandate ended in May 1948 with a view to eliminating the nascent Jewish state. The funding of such blatant propaganda by a "Christian" organisation which is supposed to be seeking a peaceful solution not only defies logic, but also does little to support Christian Aid's somewhat hollow claim that its main purpose is to eliminate poverty. However, now, with the building of the security fence, aid organizations finally have a window of opportunity to make a positive rather than a negative contribution to reaching a political solution. This solution needs to focus on halting funding for violence and incitement, building infrastructure to facilitate the economic integration of the territories into Jordan and Egypt, and the building of a peaceful Palestinian society. Additionally, much can be done in the educational field to reduce the level of racism and incitement in Palestinian society. Possible methods include supporting a joint Jewish-Arab "think tank" and promoting joint Jewish-Arab projects in the school and university educational systems to promote mutual tolerance, uproot negative stereotypes and encourage dialogue.

9.   Future development needs of a Palestinian state and the potential for its economic cooperation with Israel

  BIG input: At this point, much of the PA territories have descended into anarchy, with inter-clan killings of so-called "collaborators" often serving to conceal the closing of personal accounts in an arena where societal frameworks have broken down. At the same time, Arafat's health is widely reported to be rapidly deteriorating. As Arafat is the "symbol" of Palestinian nationalism, it is unclear whether there will be any continuation of a specifically "Palestinian" national identity in a post-Arafat era. Accordingly, it is an open question whether, after the unsuccessful experiment of Oslo, there will continue to be movement toward a Palestinian state. As regards the potential for economic cooperation with Israel should such a state be formed, this is largely a function of whether the security fence does indeed bring an end to terrorism and usher in a period of peaceful relations. If Arab attacks against Israelis continue, then it is difficult to imagine that Israel will have any motivation to cooperate economically with this state, in the same way that most countries at war with each other do not cooperate in the economic sphere. Thus the major question is whether a future Palestinian state will wish to live in peace with Israel. As per a poll taken in September 2003, "59% of Palestinians said that even if Israel were to leave all territories and a Palestinian state was to be formed, Hamas and Islamic Jihad should continue terrorist attacks against Israel" ("Poll Paints Dim Picture for Israeli/Palestinian Peace", Steve Brown, Staff Writer, CNSNews, Given these Arab attitudes to Israel, there is clearly a question whether Palestinians envisage a future Palestinian state existing alongside Israel or as replacing Israel. As long as such polls seem to indicate that the latter is the case, it would seem to be against Israel's existential interest to furnish such economic cooperation.

  The following appendices have not been printed, but copies have been placed in the Library:

  Appendix A—Recent Article Concerning Refugee Problems Worldwide, Who Wants to be a Palestinian Refugee?, by Steven Plaut

  Appendix B—Palestine Media Watch Report on NGOs Refusing to Sign USAID Declaration, PA NGOs Defy US—Refuse to Sign Anti Terror Document, by Itamar Marcus

  Appendix C—Planting seeds of the next war: The truth about the Palestinian schoolbooks, by Itamar Marcus

November 2003

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