Home inSight Palestinian Corruption – Again

Palestinian Corruption – Again

Shoshana Bryen
SOURCEGatestone Institute

If the Palestinian movement believes it lives outside the laws of politics, nature and economics, it may be right.

The PA and Hamas occupy a split territory with two feuding governments — both dictatorships with all the arbitrariness and lack of accountability implied by that; multiple armed services that fight each other and, occasionally, kill Israelis; a school system that teaches children that the IDF ate Mickey Mouse and Jews have no history in the land of the Bible; a civic culture that venerates suicide bombers and the mothers who seem to revel in their children’s bloody demise; and an economy that produces nothing of export value. Yet it operates on the principle that it will be bailed out by European and American political support and international largesse. And that Israel will be blamed for the Palestinian failure to thrive.

Two stories this week, however, may challenge endlessly naïve European and American fealty to the Palestinian narrative.

Israel uncovered a huge new tunnel from Gaza into Israel, built with the concrete slabs Israel permitted to be imported for the construction of houses. And the European Union, the largest provider of economic assistance to the Palestinians, discovered in an audit that the PA has stolen, lost or misappropriated $2.7 billion in EU development money.

Israel and Egypt maintain an embargo on a variety of goods entering Gaza as a result of the Hamas rocket war and the kidnapping of Israeli soldier Gilad Shalit (since released). The UN Palmer Commission deemed the blockade legal under international law, but Israel has been castigated by “humanitarian” organizations for its embargo on building supplies, which Israel maintains can be diverted for military use. Last month, however, with Gaza feeling the effects of a much more stringent embargo by Egypt and the destruction of perhaps 90% of its smuggling tunnels, Israel permitted cement and other building supplies to enter. It was a humanitarian gesture that resulted in Hamas building a mile-long concrete-lined tunnel 60 feet underground, running about 1,500 feet into Israel. According to the IDF, it had lights and a rail for a small trolley, “probably intended to transfer terrorists or soldiers from side to side rapidly.” It was, in short, a tunnel with no economic value, designed to kidnap Israeli soldiers and transport them into Gaza for ransom or mayhem.

No word from the “humanitarians” on the diversion of civilian aid to more nefarious ends.

Palestinian theft of European and American aid money simply is not new (for samples, look here in 2007, here in 2009, here in 2010, here in 2012, and here earlier this year.). Not for nothing do 78% of Palestinians think the PA is corrupt and 64% think Hamas is corrupt. The Palestinians create for themselves a perpetual financial crisis, which they — with help from international institutions — blame on Israel. In its most recent report, the World Bank blamed the Palestinian economic crisis on Israeli checkpoints. That is to say, the Palestinian right to practice terrorism against its neighbor (and most practical trading partner) trumps Israeli security concerns.

But if the findings of the EU audit are not a surprise, European taxpayers might consider taking a hard look at the sheer magnitude of the fraud, both in economic and political terms.

In 2004, the PA was among the first members of the European Neighborhood Policy. Since 1995, it has been a member of the Euro-Mediterranean Partnership and since 1997 the EU and the PLO have an interim Association Agreement on Trade and Cooperation. The EU participates in the training of the Palestinian security services and provides technical assistance for the establishment of courts that meet international legal standards. These agreements imply responsibility on the part of the Palestinians in international institutions.

And then there is money. In 2013, direct financial support for the PA was scheduled to be $124 million, up from $115 million in 2012, plus another $97 million in additional “projects,” and an average of $136.5 million annually for UNRWA. On top of which, there are the “programs.” The PA is eligible to receive EU money through the Partnership for Peace — $6.8 million for 2013; the Cross Border Cooperation Program; Investing in People; and the Erasmus Mundus External Co-operation Window; and Tempus (higher education) programs. In 2012, the EU put extra money into UNRWA through its Food Facility, Social Safety Net ($54.3 million), and Instrument for Stability ($10.2 million) programs, sums that are expected to be provided again in 2013. Plus and plus, the total comes to nearly $500 million annually.

On the other side of the equation is Palestinian budget math. The PA in 2013 expects to take in revenues of $2.88 billion and run a deficit of $1.4 billion, which it plans to cover with foreign aid – including some $400 million from the U.S. (not including more than $70 million to the Palestinian security services and $200+ million to UNRWA). It should be noted that the Hamas budget is separate from that of Fatah on the West Bank, but the math is similar. Hamas’s expected revenue in 2013 is $243 million, against planned expenses of $897 million, the deficit of $654 million to be covered by donations (from Iran?). The destruction of smuggling tunnels by the Egyptian army may force a revision of the figures, but by way of comparison, for 2012, Hamas planned on revenues of $60 million and a deficit of $480 million.

The story of Israel’s departure from Gaza in 2005 is well known. There was no Gaza embargo, no impediment to independent Palestinian economic activity. In fact, the Palestinian new agency Ma’an was ecstatic about economic opportunities in Gaza, particularly with the acquisition of the greenhouses and agricultural equipment the Israelis were leaving behind in a $14-million deal. It is also well known that Palestinian looters attacked the greenhouses, and by early 2006, they and the $100 million in annual exports to Europe they had produced were destroyed.

What appears less well understood is that Palestinian choices, both in Gaza and in the West Bank, have economic consequences. Violence against Israelis from terrorism and rockets makes it all but certain that Israel will take a “security first,” not “economic development first,” attitude toward its Palestinian neighbors. The willingness of the EU and other international donors to believe that Israel’s security accounts for Palestinian poverty reflects the European attitude toward Israel — not EU economic theory.  Perhaps $2.7 billion in aid money stolen from European taxpayers will get their attention and their ire.

It would be a first step toward a rational view of the violent destructiveness of the Palestinian Authority and Hamas not only toward Israel, but toward their own people as well.