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Israel's Support of the Palestinian Economy

Israel's Support of the Palestinian Economy

What you never hear about in the mainstream media.

by

Since the Palestinian Authority (PA) and Israel signed the Oslo Accords in 1993, Israel has been working with the PA to help develop a viable, even vibrant economy for the Palestinians that provides jobs and support the infrastructure for viability. A strong economy is essential for stability and, hopefully, will lead to the development of social and democratic institutions. Even during periods of escalated violence against Israel, including Intifadas and rockets reigning down from Gaza deliberately targeting civilians, Israel continued its efforts to improve the lives of the Palestinians.

Many of the things Israel does on a daily basis go without public notice, vastly under-reported in the media. The hope is that prospects of a better future for the Palestinians will enhance the chance for peace.

The Facts

(1) In September 2012, with the Palestinian Authority (PA) facing severe financial strain due to a shortfall in international donations and significant overspending, Israel advanced the PA 250 million shekels in tax revenues to aid the Palestinian economy. Similarly, in July 2012, Israel advanced the PA 180 million shekels to ensure that the salaries of PA employees were paid before the Muslim holiday of Ramadan.

(2) Since the signing of the 1993 Oslo accord, real GDP per capita in the West Bank has increased considerably. From 1998-2011, these numbers grew from about $1,750 to about $2,000 according to the June 2012 U.S. congressional report U.S. Foreign Aid to the Palestinians. The report also notes that Gaza experienced a considerable rise in real GDP per capita from 2002-2005 before the Hamas takeover.

(3) In order to reduce the level of Palestinian unemployment, Israel has increased the number of permits for Palestinians to work in Israel - by 40% since February 2011.

(4) Despite the constant barrage of rocket attacks emanating from the Gaza Strip, Israel provides most of the electric supply for both the West Bank and Gaza. Approximately half of Gaza’s electricity is supplied directly from Israel by way of the Israel Electric Corporation (IEC). The remaining supply comes mostly from the Gaza Power Plant (GPP), which is funded not by Hamas but by the Palestinian Authority.

Billions of dollars in international aid is sent to the Hamas-controlled Gaza Strip.

Indeed, the PA reportedly spends approximately 40% of its annual budget on Gaza. Thus, much of the billions of dollars in international aid that is provided to the Palestinian Authority is in turn sent to the Hamas-controlled Gaza Strip.

Despite owing the Israel Electric Corporation over 662 million shekels, Israel continues to provide electricity to the PA. This includes supplying electricity to government buildings such as schools, hospitals, and water pumping stations.

(5) Following a March 2012 meeting of the Ad Hoc Liaison Committee (the committee chaired by Norway and co-sponsored by the European Union that serves as the policy coordinating mechanism for development assistance to the Palestinian people), Israel appealed to the International Monetary Fund (IMF) to support PA requests for special IMF economic assistance. Israel even attempted to acquire a one billion dollar IMF loan on behalf of the PA, but was turned down because the IMF reportedly did not want to set a precedent of one state taking a loan on behalf of a non-state entity.

(6) In July 2012, Israel’s Minister of Finance, Dr. Yuval Steinitz, and PA Prime Minister Salam Fayyad, discussed new measures designed to boost the Palestinian economy. These included developing the Gaza Marine gas field which reportedly “could contribute dramatically to Palestinian fiscal sustainability.”

During 2011 and the first half of 2012, Israel closely collaborated with the PA to improve the Palestinian agriculture industry. This included projects to exterminate pests, improve soil quality, and increase international trade of Palestinian agricultural goods.

(7) Despite being governed by Hamas, an international terrorist group dedicated to Israel’s destruction, Israel has established a number of initiatives meant to aid Gaza’s economy. These include provisions to promote the building of essential societal institutions such as schools, hospitals and sanitation centers. Since 2010, these Israeli initiatives have seen Gaza’s real GDP per capita improve considerably.

(8) Israel continues to provide extensive medical care to Palestinians, including those from the Gaza Strip. In 2009 alone, some 10,544 patients and their companions left Gaza for medical treatment inside Israel. Further, Israeli doctors working through the organization Save a Child’s Heart have performed free life-saving heart operations for 2,300 children since 1995, with almost half of these children coming from the Palestinian Territories, Jordan and Iraq.

(9) Recently, many Palestinians have voiced a desire to become citizens of Israel, especially in east Jerusalem. According to Hatem Abdel Kader, the Fatah official in charge of the “Jerusalem Portfolio”, this growing trend is a result of the failure of the PA and Arab and Islamic countries to help the Palestinian residents of Jerusalem. As noted by Khaled Abu Toameh of the Gatestone Institute, Abdel Kader “is admitting that Israel is doing more for these Palestinians than the Palestinian leadership and the entire Arab and Islamic countries.”

(10) The PA receives international aid primarily in the form of loans and grants from the United Nations Relief and Works Agency (UNRWA), the United Nations Development Program (UNDP), the United States, and Net Official Development Assistance (ODA), which is an amalgamation of aid packages from the nations of the Organization for Economic Cooperation and Development (OECD) and other international lending institutions such as the World Bank and International Monetary Fund (IMF).

International aid to Palestinians far exceeds all Marshall Plan aid for post-WWII Europe.

Since 1996, the West Bank has received over 70,000 loans from the UNRWA alone, amounting to over 100 million dollars, and since 1992 Gaza has received over 98,000 UNRWA loans amounting to over 110 million dollars. To provide context, the amount of international aid provided to the Palestinians, taking inflation into account, far exceeds the Marshall Plan aid designated for rebuilding Europe following the Second World War.

(11) According to the Council on Foreign Relations, Hamas receives its funding primarily from private donors from Arab Gulf States, international Islamic charities such as the Holy Land Foundation (which was shut down in the US in 2001 for funding Hamas, a US-designated foreign terrorist organization), and Iran, that donates approximately 30 million dollars annually. As noted above, Hamas also receives direct funding from the PA.

(12) The United Nations Relief and Works Agency’s (UNRWA) sole focus is the Palestinian population. According to the June 2012 U.S. congressional report, U.S. Foreign Aid to the Palestinians, since its inception in 1950 through 2011, the United States has given the agency over $4 billion dollars and has always been UNWRA’s largest donor. Aggregate contributions from the Muslim world during this time makes up about 15% of the total budget. In 2011, UNWRA’s general fund (ie. core program) budget was $568 million, with the U.S. contribution almost $129 million, about 23% of its budget, with the total 2011 U.S. contribution to UNWRA almost $239.5 million. It is important to note that Saudi Arabia is the only Arab nation in the top-10 donors to UNWRA in 2011 with their core budget pledge at approximately $5.3 million and total pledge at $76.8 million.

According to the Jewish Virtual Library, “Initially, the United States contributed $25 million and Israel nearly $3 million. The total Arab pledges amounted to approximately $600,000. For the first 20 years, the United States provided more than two-thirds of the funds, while the Arab states continued to contribute a tiny fraction. Israel has donated more funds to UNRWA than most Arab states. The Saudis did not match Israel's contribution until 1973; Kuwait and Libya, not until 1980. As recently as 1994, Israel gave more to UNRWA than all Arab countries except Saudi Arabia, Kuwait and Morocco.” Currently, Israel does not give directly but through their UN dues. The UN pledge to UNRWA was over $24.5 million in 2011, making it the 10th largest donor after Switzerland.

Call to Action

Share this information with your friends, family, clergy, media and colleagues so they know the facts regarding Israel's commitment to help Palestinian Arabs build a thriving economy which is the prerequisite for self-governance.

Write letters to your local and national newspapers, email this article to everyone you know, and share this information on Facebook, Twitter and other social media - enabling everyone to become informed and understand the complexity of the situation between the various Palestinian factions. Alert them to the challenges that not only Israel but the world faces in trying to get Palestinian leadership to end internal corruption and their support of terrorism, so that their entire focus can be on creating a viable, successful and peaceful Palestinian state.

Until these issues are resolved, attempts by the Palestinian Authority to upgrade their status at the United Nations are simply a ruse to get around negotiations with Israel, while their people are left in despair with no real future prospects - thereby leading to increased frustration, even terrorism, and the continued corruption that enriches those in power.

Israel continues to show, in word and deed, its commitment to a brighter future for their Palestinian Arab neighbors. The real question is whether the Palestinian leadership has the same commitment.

Further Reading

Published: November 10, 2012


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Visitor Comments: 6

(5) Bertrand ESCAFFRE, December 26, 2012 10:18 AM

Honour of Israel

Shalom, ... this is my talk as a muslim : Israel : invade Gaza with non-lethal weapons, put the dislikers of Israel in jail, make them work for the benefits of hospitals, for Gazeans ARE VERY HAPPY to have Israeli hospitals. True charity in front of the Gazean's hypocrisy.

(4) Michael, November 17, 2012 12:58 AM

Please Israel, stop giving Gaza a dime until Hamas ceases to attack your own country at every turn. They say people only value the good things in life once they lose them, and the Gaza strip is in need of a big reality check. It's time to show them who's in charge of everything.

(3) Tom, November 15, 2012 8:12 AM

idiots, fools and evil people

What wonderful news. The Israeli government is helping to build up the enemy that is at war with us and is killing our civilians. This is nothing to praise. This is pure stupidity. You have another article on this site that no other sane country would tolerate rocket attacks on its citizens. Well, no sane country would be giving aid and support to the enemy. That is treason! Wake up. Fight the war to win, or you're doomed to loose.

(2) Tim Upham, November 12, 2012 4:01 AM

There Is Great Potential For Growth

Israel is the Palestinians largest trading partner. The Palestinians already do U.S. $3 billion dollars worth of business with Israel, and Israel sells over U.S. $3 billion dollars worth of commodities to the West Bank. The potential for growth is even greater. An optional airport in Gaza can be used by Israeli farmers to come up from the Negev, to fly out fresh fruit and flowers to markets overnight in Europe. This could be providing revenue from service fees and taxes. An optional airport can also be used for flying out grapes and olive oil from the West Bank. This great potential could be materialized if Hamas recognized the State of Israel. Israel has also offered to develop Gaza's share of the Tamar natural gas fields, for Israel has the technology to develop their share. A windfall of profits could be achieved for both Israel, and the West Bank and Gaza, if only Hamas recognized the State of Israel, and Israel and the Palestinians could sign a peace treaty together. Hamas must be looking into the future, for Hebrew is now being offered in Gaza schools, and Hamas says it has recognized the pre-1967 borders. Hopefully, soon Hamas will take it a step further.

Dvirah, July 27, 2014 4:10 PM

Slow Down

If Hebrew is offered in Gazan schools, the most likely reason, currently, is so that terrorists can masquarade as Israelis for the purpose of slipping thru Israel's security controls and harming - killing or kidnaping - true Israelis. It is too soon to see this as a sign of goodwill. And we have more than enough evidence that Arabs lie easily whenever it suits them.

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