Memorandum submitted by Maurice Ostroff
This memorandum presupposes that any serious
study of the effectiveness of Development Assistance requires
an analytical approach, carefully distinguishing between the facts
and propaganda. It makes no pretence at being comprehensive and
responds only to items 1, 2 and 9. The memoranda already published
on the Committee's web site, have fully documented the truly tragic
circumstances in which the Palestinian people are living. A careful
study indicates however, that unfortunately, most deal with the
symptoms in the form of the harsh conditions under which the Palestinians
are living and ignore the basic causes. Certainly, in the short
term, symptoms must be treated, but in seeking the long-term solution,
it is essential that unbiased efforts be made to identify the
root causes and address them.
The writer appreciates the enormous value of
work being done by the several humanitarian agencies who have
submitted memoranda and in particular, while having reservations
about certain aspects, commends the constructive memorandum submitted
by Christian AidBecause
of its high value, an addendum has been added to this report in
which certain aspects of CA's submission are discussed.
While the Committee's terms of reference do
not call for recounting the history of the conflict, it will be
unable to arrive at realistic, workable solutions unless the recommendations
and observations submitted are placed in their proper context,
taking into account the background and the circumstances which
led to the present situation. Otherwise, they are liable to be
dangerously misleading, resulting in superficial conclusions.
As indicated by the name of the Committee, the
"Occupation" is a central issue and ending the occupation
is the self-evident solution most commonly offered in the memoranda
already published. Certainly, Israel's rule over the Palestinian
people in the West Bank and Gaza must be brought to an end, but
the problem with calls to "end the occupation" is that
they mean different things to different people. Some consider
Israel's presence anywhere between the Jordan and Mediterranean
Others regard the occupation as referring to all areas beyond
the 1947 partition lines and yet others demand only that Israel
withdraw from its incursions into areas allocated to the PA. Most
refer to the occupied territories as those, which came under Israeli
control in 1967. It is plainly obvious that, to be given any serious
consideration, the call for "an end to the occupation"
must be clearly defined. As explained in appendix A, many who
use the expression "end the occupation" actually intend
to suggest territorial adjustments as called for in resolution
242 and as proposed in the Road Map. (See appendix A.)
An attempt is made to add some balance to the
shortcomings in memoranda, which examine the present situation
in isolation, without considering the preceding causative events.
Clearly, if the Committee is to arrive at valid conclusions, it
must consider both sides of the conflict, carefully avoiding arguments
based on invalid assumptions.
ITEM 1. THE
UK AND EU SOURCES
The Committee is performing an invaluable task
in seeking ways and means to improve the effectiveness of aid.
One cannot help but wonder how much better off the Palestinian
people would be today if all donated funds had reached the intended
beneficiaries; not only in receiving more aid, but by a reduction
of the terror made possible by use of the misappropriated funds.
With less terror there would have been less of the harsh Israeli
For a long time, despite growing serious allegations,
the EU was reluctant to accept that funds intended for aid were
being misappropriated; a reluctance succinctly phrased by Chris
Patten in his famous declaration that he wanted the issue investigated
"like a hole in the head."
But the evidence has become overwhelming. No
doubt Committee members will have read the authoritative report
"Where Does the Money Go? by Dr. Rachel Ehrenfeld,
an expert on corruption and transnational crimes. She describes
how Yasser Arafat has used criminal means, including drug trafficking,
money laundering and counterfeiting to divert funds intended for
development of the Palestinian state, to terrorism and to personally
enrich terrorist leaders while amassing his own personal fortune.
On 10 November, 2003 CNSnews.com carried the
headline "Israel Warned West Years Ago of Arafat Pocketing
It reported further that according to a CBS 60 Minutes broadcast
Arafat secretly squirreled away some $1 billion in public Palestinian
funds and gathered another billion from Israeli tax revenues.
It quoted unnamed U.S. officials who estimated Arafat's personal
wealth at between $1 billion and $3 billion, much of the first
billion coming from international aid to the Palestinian Authority.
On 7 November, 2003, the Herald Online of Scotland,
reported that Arafat has amassed a personal fortune of up to £1.8
billion . In addition his wife Suha Arafat, who lives in Paris,
receives 60,000 pounds monthly to fund a lavish lifestyle. In
addition, her mother also enjoys a luxurious life in Paris at
the expense of the Palestinian taxpayers. The report continues
that Arafat, still controls most of the £3.3 billion in international
aid that has flowed to the Palestinian Authority over the past
nine years, during which time he has established a system of financial
aid that guarantees the support of a host of Palestinian factions.
On the same date (7 November, 2003) BBC World
News reported that a BBC investigation has found that the Palestinian
Authority, headed by Yasser Arafat, is paying members of a Palestinian
militant organisation which has been responsible for carrying
out suicide attacks.
Generous, well meaning donors must be devastated
to discover they have unintentionally been funding the terror
they abhor. As Palestinian type terror is now spreading globally,
any actions resulting from the Committee's deliberations which
prevent the diversion of donor funds to terror, will serve not
only to reduce the heat in the Israel Palestinian conflict, but
will inevitably assist the international fight against terror
(see appendix B).
The collection by Israel of customs duties and
taxes on behalf of the PA is an agreed procedure but Israel's
delays in transferring the funds to the PA cause serious difficulties.
Since the beginning of the intifada three years ago, Israel froze
payments of more than 2.5 billion shekels in tax revenues to the
PA as a result of evidence that large proportions of the funds
were being misappropriated to support terrorism. However, since
late last year, after USAID agreed to monitor the destination
of the monies, Israel began transferring it in monthly installments
to the PA.
The impact of controls on the movement of goods
and people is much more serious as the Palestinian economy was,
and continues to be dependent on employment not only inside Israel
but also in the settlements. Prior to the outbreak of the second
"Intifada" in September 2000, Palestinian workers and
business people from the West Bank and Gaza (WBG) freely entered
Israel without interference. Permits were only required for work.
146,000 Palestinians were working in Israel and the settlements
(about 22% of total Palestinian employment). Average wages for
Palestinian workers in Israel have generally been about 70 to
75% higher than those in the WBG. In 1999, labour income from
Israel accounted for about 20% of Palestinian GDP,
and the importance of this source of income for the Palestinian
economy cannot be ignored in any plans for alleviating the distressing
The dilemma faced by the Israel authorities
since the violence erupted is how to distinguish genuine work
seekers from potential terrorists. They have attempted to do this
by a system of work permits and it is worth noting that even during
the worst periods of violence 33,000 Palestinians continued to
work in Israel. Without attempting to judge which came first,
the chicken or the egg, every realist accepts that control of
the movement of goods and people is inevitable in Israel's efforts
to prevent entry of suicide bombers. Terrorists on their way to
carry out attacks have been pre-empted at checkpoints and border
crossings, saving countless lives. Even the Red Cross found it
necessary to caution the Palestinian Red Cross Society in May
2002 for using ambulances to ferry ammunitions and combatantsThe
situation which needs to be seriously addressed in a non-partisan
manner by the Committee is the anomaly of daily acts of physical
and verbal Palestinian violence against Israel on the one hand,
while simultaneously demanding employment in Israel, unrestricted
entry and removal of the barriers which have been created to prevent
acts of terror.
Not only workers have been affected by the closures.
Prior to September 2000, Palestinian and Israeli business people
and merchandise were moving feely between the WBG and Israel to
the mutual benefit of both. Hopefully, with an end to violence,
this state of affairs will be restored.
There may be room for debate about the proportionality
of Israel's responses, but not even the fiercest Israeli critic
doubts that the incursions into PA areas, restrictions of entry
into Israel proper and targeted assassinations are defensive measures.
There can be no doubt that the presence of Israeli
troops in the PA areas and restrictions on movement cause untold
suffering to Palestinians and should be brought to an end as soon
as possible in the interests of Israelis and Palestinians alike.
No Israeli soldier welcomes his tour of duty in these areas and
every Israeli desperately seeks a solution, which will make it
unnecessary. Why then are they there? The solution is obvious;
stop Palestinian terror and Israel will immediately withdraw from
PA territory, the restrictions on movement will end, the hated
fence will become unnecessary and negotiations towards a fruitful
peace can commence.
ITEM 9. FUTURE
In considering the potential for Palestinian
economic cooperation with Israel, lessons must may be drawn from
the situation in pre-intifada days, and by considering ways and
means to return to it, pointing to a light at the end of the tunnel.
Far from bringing any benefits, the intifada, which has cost so
many lives, effectively aborted a promising hugely optimistic
situation. An end to the violence and abatement of incitement
hold the promise of a slow return to the halcyon days before the
violence erupted when Israelis flocked to the Palestinian territories
on weekend shopping expeditions and Palestinians equally enjoyed
visiting Israeli shopping malls.
Many projects were in the pipeline for joint
ventures in the West Bank that would have fostered cooperation
between Jews and Arabs, created employment and generously redistributed
municipal tax revenues to depressed Palestinian areas. As an executive
member of the Israel South Africa Chamber of Commerce, I was personally
involved in a small way, in an initiative to establish a forum
for cooperation between Israeli and Palestinian business people.
We met in Jerusalem and Ramallah and had arranged a substantial
joint function, when the violence erupted and aborted our efforts.
Natan Sharansky, when he was Minister of Industry
and Trade, reported that he personally saw Chairman Arafat reject
countless projects that would have bettered the lot of his own
people simply because they would have served to decrease tensions
between Israelis and Palestinians. He wrote that Arafat continually
spurned efforts to help the Palestinian Authority establish an
industrial park in Gaza that would have encouraged investment
in Palestinian areas, created tens of thousands of jobs and alleviated
poverty. "Unfortunately" wrote Sharansky "it became
obvious that Arafat's response was due to a fear of the development
of a Palestinian society not fully under his control".
One cannot avoid speculating why Chairman Arafat
chose the path of violence rather than accept and build on the
opportunities to achieve a state and improve the lot of his people.
The Clinton/Barak offer would have given the Palestinians 90%
of their voiced demands. Evidently he was following his hidden
agenda, as revealed by the "moderate" late Faysal Al-Husseiny
who described the Oslo Accords as a Palestinian Trojan horse and
unequivocally declared that the Palestinian Strategic Goal was
a state from the Jordan River to the Mediterranean Sea. (Al-Arabi,
(Egypt) 24 June 2001).
extracts from an authoritative article by historian and author,
Prof Ephraim Karsh, which shows that within a brief period after
the 1967 war, Israeli occupation had led to dramatic improvements
in general well being, placing the population of the territories
ahead of most of their Arab neighbors. The number of Palestinians
working in Israel rose from zero in 1967 to 66,000 in 1975 and
109,000 by 1986, accounting for 35% of the employed population
of the West Bank and 45% in Gaza. Close to 2,000 industrial plants,
employing almost half of the work force, were established in the
territories under Israeli rule. During the 1970s, the West Bank
and Gaza constituted the fourth fastest-growing economy in the
world-ahead of such "wonders" as Singapore, Hong Kong,
and Korea, and substantially ahead of Israel itself.
Israeli business people were actively pursuing
paths of mutual cooperation and assistance with Palestinian counterparts.
COMMENTS ON THE CHRISTIAN AID MEMORANDUM
Christian Aid, in its admirable memorandum,
expresses its belief that the solution to Palestinian poverty
is an end to occupation and an agreement, which recognises the
right of Israelis and Palestinians alike to live in peace and
security. But, from a pragmatic point of view, as elaborated in
the introduction and in appendix A to this paper, any call to
end the occupation needs to be clearly defined before it can be
rationally addressed. If ending the occupation is recognised as
an important end goal, rather than a means to an end, it would
(a) to define clearly what is meant by occupation
and by ending it; and
(b) to study the most effective ways and
means by which this can be achieved.
Clearly the immediate need is for relief from
Israel's presence in the PA areas, by whatever name such presence
is called, and an immediate return to the pre September 2000 lines.
Only by denying the factual history that Israel's incursions into
PA territory resulted from the outbreak of violence, can one expect
that Israel revert to the pre-intifada lines without a lasting
end to the unprecedented Palestinian terror. If one acknowledges
this recent history, the first effective step then, is to end
the violence whereupon the desired withdrawal of forces, dismantling
of checkpoints, lifting of closure; and suspension of fence building
can be realistically expected, to be followed by negotiations
towards a lasting peace. This viewpoint is unambiguously in conformity
with Security Council resolution 1397 which stresses the need
for all concerned to ensure the safety of civilians, and which
demands the "immediate cessation of all acts of violence,
including all acts of terror, provocation, incitement and destruction".
With reference to the CA report quoting unemployment
figures, reference is made to section 2 above, which cites that
prior to the intifada, 146,000 Palestinians worked in Israel and
the settlements. Hopefully with an end to incitement and the violence
it produces, one can look forward to a return to this situation.
In section 3.1 CA assigns responsibility for
today's humanitarian crisis principally to Israel's occupation
of the OPT, which it defines as the Occupied Palestinian Territories.
Here too, there is a need for clarity. If we are referring to
Israel's presence in the PA areas, it is perfectly obvious that
it was the Palestinian violence, which provoked Israel to enter
these areas, albeit very hesitantly at first. If the OPT refers
to all areas East of the green line, reference is made to appendix
A in which the occupation is discussed in some detail.
The writer endorses completely, CA's reference
to the Road Map in section 5.1, and especially the statement in
section 5.2 relating to UN Resolutions 242 and 1397, that clarity
on these issues is a prerequisite for lasting peace, appendix
A provides this much-needed clarity.
In short, while the writer of this paper applauds
CA's memorandum he differs with it mainly in regard to the definition
of occupation and the order of priority of the steps which need
to be taken.
1. The first essential, yet easiest step
is to insist that the PA stop incitement as demanded by the EU
and US endorsed road map, including cessation of Palestinian promotion
of hatred in schools, the media and mosques.
2. Support the newly appointed Palestinian
prime minister Mr Qureia's call, in his words, for an "immediate
and comprehensive cease-fire with a return to peace talks based
on President Bush's vision of a two-state solution to the Israeli-Palestinian
3. With the terror threat removed, insist
on immediate suspension of construction of the fence, to be followed
by removal of the portions already constructed.
4. Introduce thorough accounting procedures
in respect of donor funds, to ensure transparency so that such
funds are used directly for the intended welfare purposes.
Appendices were also submitted. These have
not been printed. Copies have been placed in the Library.
160 Ev 86. Back
Even new school books printed by the Palestinian's own Education
Ministry such "Jurrafiyat Falastin", a seventh grade
book on the geography of Palestine, deliberately avoid showing
Israel on maps. Back
Not printed. Copy placed in the Library. Back
Dr Ehrenfeld's complete document is available at http://www.publicintegrity.org/money.pdf. Back
Not printed. Copy placed in the Library. ITEM 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. Back
IMF report Economic Performance and Reform under Conflict Conditions.
Approved by the Middle Eastern Department, 15 September 2003. Back
Not printed. Copy placed in the Library. RECOMMENDATIONS Back