Photo Op II: The sequel

This week major developed countries met in Paris for a “donor’s conference” / “photo op” designed to obtain financial support for the Fatah led Palestinian Authority in the West Bank. (We will let those in Gaza starve) The PA had requested $5.6b of aid and the participants pledged $7.4b over 3 years. Although it is not clear how much of this will actually be forthcoming and how much is just a restatement of previous pledges, it is still a significant amount of money. Tony Blair declared, “This is not a donor’s conference. This is a state building conference”. Even if this money actually appeared, it is not clear to me that it would have much impact on building a viable Palestinian state. PA President Mahmoud Abbas and his Prime Minister Salaam Fayad have frankly stated that most of the money will go towards closing the yawning PA budget deficit and not toward economic development projects. The PA runs this huge deficit not only because of mismanagement and corruption, but also because the West Bank economy is almost non existent. With no economy, tax revenues are limited and unemployment approaches 50%. Therefore, the PA becomes the employer of last resort. Unless conditions on the ground change dramatically, no amount of international funding will create a viable economy and Palestinian state. Early in his first term George Bush declared his support for a viable Palestinian state, living alongside Israel in peace and security. When a friend of mine heard this, he took George Bush at his word. (Probably not the smartest thing that he has ever done.) He decided that if this is really going to happen, we had better figure out what it will take to create a viable economy in the West Bank and Gaza and he commissioned a Rand Corporation study to accomplish this. After several years of work Rand completed the study and created their report. They tried to incorporate the strengths of the Palestinian people, education, healthcare, entrepreneurial spirit, etc., into a plan that could be implemented with international financial support. One of the primary conclusions of the study was that there must be a modern transportation and communications system linking the major population centers of Nablus, Ramallah, Bethlehem, Hebron and Gaza. The report said nothing about settlements, bypass roads, and checkpoints. I said to my friend, “Didn’t they assume away the problem?” His answer was that Rand, not a minor player in government studies business, was afraid to raise the issues. They were concerned that, given the political climate in the US, if the report talked about eliminating settlements, bypass roads and checkpoints, it would be a non starter with the US government. It turned out to be a non starter anyway as the State Department said that they had no interest in even looking at it. As the issue of freezing settlement construction surfaces after the Annapolis Conference, it is clear that Israel intends to retain East Jerusalem and all the major settlement blocks and to continue construction apace. We have been reduced to arguing about what the meaning of “freeze” is. (Sort of like what is the meaning of “is”?) (For this story, click here and here.) Unless the US exerts significant pressure to change the facts on the ground we will be back in Paris (or some other fancy resort) again in three years trying to deal with a Palestinian economy on life support.