EXCLUSIVE-Record donor pledges to Palestinians raise questions
Fri Mar 6, 2009 7:44am EST
* Unprecedented pledges to Palestinians lack transparency
* Unclear what money is new and when it will arrive
* Some pledges were double counted, diplomats say
By Adam Entous
http://www.reuters.com/article/homepageCrisis/idUSL4314212._CH_.2400
JERUSALEM, March 6 (Reuters) - Rich states and investors have announced a
record $14 billion to aid the Palestinians and their economy in a string of
Western-backed meetings meant to boost President Mahmoud Abbas in his power
struggle with Hamas.
But diplomats said many of the pledges made at five donor and investor
conferences held since December 2007, including one in Egypt on Monday, were
counted more than once, have yet to materialise or were too vague to rely
on.
Much of the money depends on Israel fully opening border crossings with
Hamas-ruled Gaza, and lifting restrictions in the occupied West Bank where
Abbas's Palestinian Authority holds sway, or has been linked to progress in
stalled peace talks and Palestinian reconciliation, casting doubt on future
payouts.
One senior Western diplomat criticised the pledging process as "smoke and
mirrors" because of double-counting. Another said the big-figure headlines
from donors eager to look forthcoming, combined with a lack of transparency,
were "getting ridiculous", noting that despite the cascade of pledges, the
Authority was still struggling to pay full wages to its workers on time.
Conference organisers have disclosed little about individual donor pledges
or disbursement schedules, making it difficult to track how much money was
really in the pipeline for Abbas.
Donors also differ over how to deliver their aid, underscoring divisions
over isolating Hamas, which has decried the pledging process as financial
"blackmail" to marginalise the group after its 2006 election victory. Israel
and the United States say they want to prevent any money from going to the
Islamists, who they consider "terrorists".
RECORD PLEDGES
The large sums announced at conferences in Paris, Berlin, the Egyptian
resort of Sharm el-Sheikh and the West Bank over the last 15 months -- $12
billion from governments and $2 billion from investors -- were unprecedented
by Palestinian standards, eclipsing the amount the Authority received in the
previous 14 years since the 1993 Oslo peace accords.
Combined, the pledges would be the equivalent of $3,500 for every man, woman
and child in the West Bank and Gaza, more than double per capita Palestinian
GDP. Half of Gaza's 1.5 million population live on less than $3 a day, by
Palestinian estimates.
It is unclear how much of the $4.5 billion in "new commitments", announced
at Monday's conference in Sharm to help rebuild the Gaza Strip after
Israel's devastating offensive, were really new, said Western diplomats who
took part.
Diplomats and analysts pointed to the large discrepancy between what the
Palestinian Authority asked for at Sharm -- $2.8 billion over two years --
and what was announced as an indication that the numbers were not realistic.
Palestinian Planning Minister Samir Abdallah dismissed doubts about the
dollar-amounts, telling Reuters "most of the pledges made in Sharm were new
commitments" and did not overlap with previous announcements.
Diplomats said the biggest cash offers on Monday came from a bloc of Gulf
Arab states with a particularly spotty track record of fulfilling
commitments to Abbas's West Bank-based government.
Some of them were reluctant to be seen as taking sides with the Authority's
Western-backed leader, who advocates peace with Israel, against Islamists
with appeal on the Arab street.
Breaking with Western donors, the Gulf bloc has opted to channel $1.65
billion through their own mechanism, angering some Authority officials.
Washington wants Abbas to accrue credit.
Mazen Sonnoqrot, former Palestinian economy minister turned businessman,
said some of the Arab funds may be withheld until Abbas and Hamas reconcile.
It is unclear if that will happen anytime soon because of internal
Palestinian divisions and U.S. demands that Hamas recognise Israel and
renounce violence.
Diplomats said some other donors in Sharm, including the European
Commission, largely re-pledged commitments initially made at a donors'
conference in Paris in December 2007.
In Paris, some $7.7 billion was pledged for the Palestinians to be spread
over three years. According to Authority estimates, about $2.4 billion of
that has been disbursed, much of it behind schedule, forcing Abbas's prime
minister, Salam Fayyad, to delay some salary payments and to scramble for
emergency financing.
"It is the same money," said a senior Western diplomat, whose government
made a sizeable pledge at the conference in Sharm el-Sheikh. "It is getting
ridiculous."
ECONOMIC STAGNATION
The Palestinians have always relied on donor assistance. But pledging
ballooned after then-U.S. President George W. Bush convened a November 2007
conference in Annapolis, Maryland to relaunch peace talks between Israel and
the Palestinians and to shore up Abbas after Hamas's Gaza takeover in June
2007.
Those talks have since stalled, Abbas's standing looks shaky, and Hamas's
grip on Gaza remains strong.
A senior diplomat who advises European powers on aiding the Palestinian
Authority said "proof" donor commitments were being overstated could be
found in the mismatch between the pledges and economic activity. Since the
Paris conference, Palestinian GDP has declined by more than 1 percent in per
capita terms.
"If those numbers were sincere you'd see an increase in the economy. The
truth is the aid is either non-existent or is being wasted on non-productive
investments," he said, pointing to donors who direct most of their funds to
development projects that can take years to complete because of Israeli
restrictions.
Like government pledges, it is unclear how many private sector investments
were really happening. Nablus Governor Jamal Muheisen, whose city hosted one
of the conferences in November, said he knew of none so far. Organiser Samir
Hulileh said some West Bank projects were advancing but more slowly than
planned.
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Mouin Rabbani, a Middle East analyst based in Amman, said the surge in
post-Annapolis pledging was partly "a PR stunt to boost Abbas", but added:
"Even if a small proportion of the pledged funds does get through, this is
still a huge amount." (Additional reporting by Mohammed Assadi in Ramallah,
Atef Sa'ad in Nablus, Wael al-Ahmed in Jenin; Editing by Janet Lawrence)
