Memorandum submitted by Take-A-Pen for
Israel's Chairman, Endre Mozes
HOW BUDGETING TECHNIQUES OF THE UK AID TO
PA COULD HELP OR HARM POLITICAL SOLUTIONS TO THE CONFLICT?
INTRODUCTION:
The subject of the present submission is the
manner in which the UK aid to the Palestinian Authority, and particularly
its methodology of budget planning and control, have influenced
the Israeli-Palestinian-Arab political process in general, and
the PA's readiness for the decisive steps required under the peace
process agreements, in particular.
This submission contains an uncommon description
of the political process, it briefly refers to certain known remarks
on the PA spending, and in its focus there are original professional
remarks on the aid money's budget planning and control, and their
effects.
The examination of the UK aid's budgeting techniques,
whether the use of aid money was, or was not planned and controlled
in an accountable budget linked to the political process, is submitted
briefly by Take-A-Pen's Chairman, Endre Mozes, MSc. M.Eng., MBA,
US Certified Cost Engineer and Consultant, with many years experience
as responsible for Budget Planning and Control of about $300 million
annual spending within a large organization.
ABSTRACT:
There are wide-spread and at least partly well-founded
allegations on corruption and misuse of the financial resources
of the Palestinian Authority in general, and, as a part of it,
of UK aid money too. There are several allegations in full detail
on personal Palestinian corruption, like filling huge private
bank accounts and financing luxurious life of PA functionaries
and family members. These may be detestable cases of corruption,
but are probably not directly harmful to the peace process. More
detrimental has been for the peace process the misuse of financing
for such sinister purposes which were in sharp contradiction both
with the peace agreements and with the original intentions of
the UK aid, such as: acquiring weapons (Kareen A), financing terror
accessories (like explosive belts for suicide bombings), and giving
salaries to active terrorists (such as to the members of the Arafat-controlled
and formally Fatah-led al-Aqsa Martyrs Brigades), etc.
But what the present Memorandum suggests as
the main reason of the absence of success of UK and other aids
to the Palestinians in promoting peaceful political arrangements,
is not the partial misuse of money described above, but the lack
of tight budgetary planning and control: there was no detailed
performance-related budgetary plan, dedicating payments of UK
(and other) aid, item-by-item, to specified measurable goals;
no strict follow-up and control by UK staff on the execution of
this budget plan, and, most important of all, the lack of clear
conditioning of the actual monthly payments of the aid on, or
theirs linkage to, the absolute abstention from and avoidance
of terror, violence and other major breaches by the Palestinians
of the agreements of the peace process.
Seemingly the UK financial aid was granted to
the PA accompanied by clear UK guiding documents, and also some
joint understandings with the Palestinians, on the aims and principles
of the aid. Those responsible for the technicalities of the UK
aid presumably did not want to spoil the UK aid's look as a generous
support by entering into miniscule details. But general requirements
and understandings of conceptual nature are not sufficient for
effective budgeting in most cases, particularly not if the recipient
has no proven record of reliable budget control, and even less
if the two sides have not had a history of effective planning
and budgeting co-operation. Without a detailed budget plan, all
the items of which are dedicated to meeting measurable goals,
so-called "deliverables", the intended use of resources
can not be secured even in a non-violent environment, which is
not exactly the PA's case.
This goal-oriented budgetary planning and control
can be illustrated on two possible future examples.
For one, if the budget for future UK aid is
intended to be planned in detail as described and recommended
above, to be strictly controlled and in some cases even managed
as a project by UK personnel, these activities must be properly
budgeted themselves. Their rate can be about 0.6% of the total
budget, up to 4% for the projects to be managed and possibly conceptually
engineered by UK professionals. If thus properly budgeted, that
detailed budget planning and control will happen.
Another example: MK Michael Melchior suggests,
as described in Attachment A, and asks the supporters of the peace
process to help the sides to empower a rational, moderate coalition
of religious and cultural leaders from both sides, possibly with
the participation and facilitation of Christian leaders, in order
to provide an alternative to totalitarian extremists dominating
the media and public opinion today and making real peace almost
impossible. Presuming that this suggestion is approved to be supported
by UK aid, it must be detailed in an action plan, from the first
meetings to the application in education systems, which or part
of which would be installed in the budget in financial terms.
If properly budgeted, such a moderate coalition of religious and
cultural leaders would probably raise and start to function.
On the other hand purposes not approved in similar
details would not get financed.
But, as said before, worst of all were the consequences
of the lack of clear conditioning of the continuation of the actual
monthly payments on an abstention from Palestinian terror and
other major breaches of the agreements of the peace process. This
lack of conditioning of UK and other aid to Palestinian non-violence
was interpreted by the Palestinians, the PA as well as the public,
as a tacit acceptance of their violence against Israel by the
UK as semi-legitimate. This perception was, of course, not justified
by the real views of the British government. But neither was it
effectively discouraged by them, since official British condemnations
were expressed in a tone of understatement, not always properly
understood in the Middle East. At the same time this perception
of a tacit UK acceptance was strongly underlined by a large part
of the British media, led by the BBC which was considered as sort
of a semi-official voice of Britain. The quasi-official BBC, as
well as the Guardian, The Independent and others, failed to denounce
even deliberate mass murders of Israeli civilians as "terror",
murderers and terror-organizations were consequently called as
"activists" and "militants".
In March 2002 Palestinian organizations, including
the Arafat-controlled Fatah military arm, the al-Aqsa Brigades,
financed partly by the PA, killed 123 Israeli civilians in 26
terror-attacks in one month alone. British aid continued to flow
undisturbed to PA, during and after this period! As a result the
PA saw no serious incentives to comply with agreements.
As a statesman put it, "the PA wanted the
rights of a state and the obligations of a gang".
This false Palestinian perception of UK's tacit
acceptance of their violence, caused mainly by the continuing
flow of aid without regard to even the most violent surge of Palestinian
terror against Israeli civilians, was clearly counter-productive
for Palestinian efforts to perform their obligations, and so for
the Israeli-Palestinian peace process as a whole.
But lessons learned from it can turn the UK
aid to a leverage to the peace process in the future.
CONCLUSION
Future UK aid to the PA, if strictly subject
to the implementation of detailed planning and tight control of
a goal-oriented budget, with actual payments conditioned on PA's
continuous fulfillment of their obligations, can become a most
effective and practical leverage to the peace process.
Thus the goals intended by the aid would be reached,
while unintended and counter-productive purposes could not be
covered by UK aid.
Without applying the recommended budgetary techniques,
aid may be detrimental to Palestinian fulfillment of obligations
as described, and to the whole political process, again.
(Attachments A to D not printed. Copies
placed in Library.)
November 2003
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