President Donald Trump kicked off 2018 by posting a series of tweets questioning US aid funding to Palestine, considering both the lack of “appreciation or respect” the US receives in return and the lack of willingness to “talk peace”. Three days later, senior national security officials from both the State Department and the Pentagon met at the White House to discuss the eventuality of cutting aid. On the 17th of January, the Trump administration confirmed it would be slashing its first instalment to the United Nations Relief and Works Agency (UNRWA) by nearly half – from $125 million to $60 million dollars.

A striking feature of this decision is the logic attributed to aid; it is seen as an instrument to influence actions and decisions. This was seen during Nikki Haley’s UN speech in December threatening to cut aid to countries that voted in favour of the UN’s Jerusalem resolution. And while it would be naïve to argue that donors are not motivated at all by political agendas, what is particularly interesting about the Palestinian case is that aid was conceptualised as a tool to support a peace process, as opposed to imposing terms of peace and coercing either party to agree to them.

In contrast to previous military interventions, the post-Cold War aid agenda sought to build peace through aid. Following the signing of the 1993 Oslo accords, aid sought to promote Palestinian socioeconomic development, boost domestic stability and consolidate peace in building a democratic Palestinian state. Evidently, these initial ambitions fell short of success. Despite donor intentions, the formula oversimplified the domestic and international political dynamics, resulting in ineffective aid.

While the criticisms and anger sparked by the US decision are understandable, they overlook some of the endemic issues relating to the ineffectiveness of aid in Palestine. While it began as well-intentioned foreign financial assistance, it is important to question why aid development has failed in Palestine, and what the consequences have been for the peace process.

Firstly, the uninterrupted Israeli occupation has shifted the priorities of aid assistance, leaving the Palestinian population in conditions whereby aid is necessary for survival. The occupation and its policies of closure and expansion have transformed the physical and economic landscape, fragmenting the territories and effectively undermining the notion of the Palestinian state-building project. As a result of the occupation (and its many consequences) it is impossible for aid agencies to support the construction of an independent Palestinian state.

Israel’s policies of closure have had a detrimental effect on the Palestinian economy, undercutting economic growth and at times generating a state of humanitarian crisis. This was affirmed in the UN’s 2016 annual humanitarian overview report stating that Israeli policies continue to be the ‘key driver of humanitarian need’ in Palestine. Ultimately, these measures force aid agencies to shift their attention from capacity building and long-term development projects to addressing more immediate humanitarian emergencies.

In line with this is the idea that the Israeli occupation and provision of international aid to Palestine signifies a mutually reinforcing relationship. Israeli occupation is in part prolonged by aid assistance in discharging the Israeli state of its legal responsibilities to those that it occupies, and rebuilding whatever it destroys. The process of ‘de-development’ within Palestine provoked by Israeli actions means that any introduction of funds within the assaulted Palestine areas serves to perpetuate the occupation.

In fuelling the occupation aid has allowed Palestinians to endure their predicament. As Israeli journalist Amira Hass explains, the Israeli strategy supervising the impoverishment of Palestinians blunts resistance – while avoiding a full-blown humanitarian crisis through reliable aid flows. Accordingly, aid has eroded a necessity for resistance in Palestine, instead achieving a relatively stable context where systematic oppression is tolerated. Instead of seeking to achieve its core objective of supporting the peace process and addressing the conflict itself – the very thing that must change if assistance is to be delivered successfully – aid in Palestine has normalised Israeli occupation.  

Moreover, donor agendas and lack of donor commitment has been key in underwriting the ineffectiveness of aid. The donor discourse of wanting to change local realities has not been reflected in the agenda and levels of commitment. International donor priorities reside in the security of Israel first (see US military aid to Israel) and then in the socio-economic and political development of Palestine – two positions which currently appear to be mutually exclusive. Although concern may be voiced by donor representatives in private, no coordinated action has sought to pressure Israel to restrain its policies. A good example is the EU’s failure to forcefully challenge Israel for demolishing EU-funded projects in early 2016.

NGOs, through the funding of donor bodies, have been able to offer Palestinians salaries that are four times higher than the local private sector. An unintended consequence has been an increase in the cost of labour, which has in turn undermined the ability of the Palestinian private sector to recruit and hire Palestinians – thwarting the creation of an autonomous Palestinian economy. Aid assistance has subsided artificial service sector jobs, supporting the humanitarian operations themselves instead of generating new areas of potential growth within the economy. The UNRWA and the Palestinian Authority (PA), as conduits of donor funds, are the major employers. This has pushed the Palestinian economy into a cycle of dependency.

On an institutional level, the lack of aid conditionalities attached to programmes allows for international aid to become an important source of external income for the PA. Through the creation of a civil service, aid provides the PA with short-term economic gains. Subsequently, insufficient economic activity outside the PA’s service sector creates a situation where the institutional bureaucracy gains relative to the rest of the economically stagnant society. The income afforded through aid gives the PA quasi-state power without accountability, allowing it to marginalise social forces and political parties contesting the PA’s leadership – undermining the Palestinian democratic project.

This system of patronage has been described as a way forward for Fatah (the PA’s political arm and ruling party in the West Bank) to consolidate power against militant groups such as Hamas. This dynamic was most recently evidenced when the PA cut electricity payments to Hamas-controlled Gaza. In this sense, the system of patronage (which has been the outcome of weak conditions on aid) can be understood as the least problematic alternative. It preserves the current context which sees an amenable Palestinian Authority controlling the West Bank, effectively satisfying all major players concerned. 

It’s clear that throughout the peace process the principal objectives of aid have been redefined. Aid today does little to encourage sustainable peace, and instead serves to prolong the current situation. Is Trump inadvertently doing Palestine a favour in cutting aid to them? Probably not. The livelihoods of most Palestinians depend on aid, as does the survival of the Palestinian Authority. Although cutting aid may result in cornering Israel to shoulder more of the economic burden – for which it is legally responsible due to its occupation – it is more likely that it will exacerbate existing hardship and tensions on the ground. Saying that, one hopeful outcome could be the integration of revised aid policies that address the failures of the past. This could allow unlawful policies, historical injustices and democratic deficits to be challenged – reigniting a forward-thinking peace process.

About the author

LUCIEN BEGAULT is a Staff Writer at Raddington Report. His areas of interest cover contemporary Middle Eastern politics, British politics, development, security and culture.