Israel Report

May 2001         

Funding the PA ?


Foreign Minister John Manley and Maria Minna, the Minister for International Cooperation, yesterday signed an agreement with Palestinian Authority International Cooperation Minister Nabil Sh'ath, to contribute an additional $5 million in Canadian development assistance to the West Bank and Gaza Strip.

The funds, to be provided by the Canadian International Development Agency and channeled through the World Bank's Palestinian Economic Assistance and Cooperation Expansion (PEACE) Facility, are being specifically directed toward job creation and the reducing of poverty amongst the Palestinians. According to the Canadian government news release, the funds will be used to support job creation initiatives such as the construction and restoration of community centers, health clinics, schools and waters systems in the areas administered by the Palestinian Authority.

The $5 million contribution augments the approximately $10 million CIDA already allocates annually to the region. Since the signing of the Oslo Accords in September 1993, Canada has contributed some $165 million in support of development programs in the West Bank and Gaza and to address the humanitarian needs of Palestinian refugees in the territories and in camps in neighbouring Arab countries. Since the outbreak of the current round of violence last fall, Canada has contributed some $2.5 million to various emergency projects and initiatives for the Palestinians.

Yesterday's announcement should be viewed with mixed reactions.

On the one hand, everyone recognizes that the Palestinian economy, already experiencing significant structural problems before the renewal of hostilities, is now in a complete "free fall."

Let there be no mistake: The reasons for this economic collapse relate more to the inefficiency and rampant corruption of Arafat's governmental bureaucracy than to the closures and other economic sanctions imposed by Israel in response to the violence of the past nine months. Well before the start of the violence there already had been a significant slowing down of international contributions to the PA areas, specifically because of the failure of Palestinian officials to institute basic budgeting procedures for administering these funds; the PA also could not, or would not, account for the literally millions of foreign assistance dollars that had gone missing. It is also the case that the Palestinian Authority is currently redirecting valuable resources, including generous international donations, from the building of institutions of civil society to the continuation of the "armed struggle" against Israel, in explicit violation of the written commitments the PA undertook under the Oslo Process, and at a severe cost to the long-term interests of the Palestinian people.

This being said, something must be done to try to alleviate the economic suffering of the Palestinian people. Indeed, in recent weeks Israel has unilaterally moved to permit more Palestinian workers to enter Israel and has taken other steps to alleviate the economic pressures on the civilian population in the territories. We support such Israeli initiatives, even as we remain fearful about their potential security implications. And we continue to support, in principle, any contribution Canada can make to improving the economic conditions in the PA areas. Indeed, since the start of the Oslo Process, the CIC and other elements of the Canadian Jewish community endorsed Canada's contributing developmental assistance to the PA areas, based on the proposition that improving the daily circumstances confronting the Palestinian people will translate into enhanced support for the peace-making exercise. Although the violence of the past months has caused some change in the operative elements of this proposition, we continue to support Canadian efforts to alleviate the suffering of Palestinian civilian society.

At the same time, there are elements of the specific deal signed yesterday that we find problematic.

At the core of our concern is the fact that the deal was signed between Canada and the Palestinian Authority. Given all of its structural weaknesses, combined with its explicit violations of the letter and the spirit of the principles underlying the Oslo Peace Process (as exemplified by its renewed use of violence and terror as tools of diplomacy, as well as its use of official institutions for inciting hatred and hostility against Israelis and Jews in general), is the PA a worthy or credible recipient of generous Canadian development assistance? The fact that the agreement with the PA was signed on the very day that two Israeli boys were murdered, apparently by a Palestinian mob whose hatred for Israelis was fuelled by vitriol sanctioned and promoted by the highest echelons of the Palestinian leadership, should have given Ministers Manley and Minna cause for concern.

While we hasten to note that there is no specific evidence to suggest that Canadian aid dollars are being diverted from their intended use in support of humanitarian relief and toward the purchase of weapons, it is also the case that money is a fungible commodity and the danger of Canadian tax money being misused by Arafat in support of his military campaign against Israel cannot be discounted.

Under no circumstances should Canada be seen (either directly or indirectly) providing financial support to institutions of the Palestinian Authority that are waging war against Israel.

At a minimum, the agreement to transfer the Canadian funds to the PA should have been tied to a specific commitment on the part of Palestinian officials to abide by the terms of last October's Sharm el-Sheikh ceasefire understandings, as well as steps to renew security cooperation with Israel, to re-arrest terrorists released from PA prisons, to confiscate illegal weapons, and to end incitement to violence.

Rather than transferring its development assistance to the Palestinian Authority, it would have been much better for Canada to have entered into agreements with specific Palestinian and international NGOs (non-governmental organizations) that provide humanitarian services directly to the Palestinian civilian population independent of the PA.

Be that as it may, the Canadian taxpayer has every right to demand that the current agreement with the Palestinian Authority includes precise, and completely transparent, procedures through which Canadian officials will monitor carefully the administration of each and every assistance dollar transferred to the Palestinian Authority.

See Also "Mr. Day speaks the truth"

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