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Donors See Little Result in W. Bank, Gaza

December 9, 2003

JERUSALEM (AP) _ Donor nations, which pumped $6.2 billion into the West Bank and Gaza over a decade, are increasingly frustrated with having to spend most of the money on emergency aid rather than on Palestinian state-building.

Much of the blame at a meeting that starts Wednesday in Rome will likely be aimed at Israel: Security closures enforced in three years of fighting have devastated the Palestinian economy and hampered the work of aid agencies, while military strikes against militants have wrecked dozens of donor projects.

Some donors are now privately saying that continued aid only allows Israel to avoid the cost of occupying lands where millions of Palestinians live. But the debate is conducted behind the scenes, and the donors _ among them the European Union, Norway, the United States and Japan _ have not called for pulling out or even scaling back aid.

At the annual donors’ conference, the Palestinian Authority will ask for $1.2 billion for 2004, including $650 million in budget support, and it is likely the donors will pay up despite the growing misgivings.

``As far as we are concerned, we are not giving up,″ said Jean Breteche, head of the European Commission office in Jerusalem.

Israel has dismissed donor complaints, saying it is trying to be helpful, where security permits. It argues that the Palestinians are to blame for travel bans and military strikes because they don’t rein in militants who have killed hundreds of Israelis.

Still, Israeli Foreign Minister Silvan Shalom says he will present a ``positive agenda″ in Rome _ presumably promises to ease travel restrictions and allow more Palestinian workers into Israel.

A serious cut in commitments would raise the expensive prospect of Israel’s having to assume responsibility for the Palestinians. Defense Minister Shaul Mofaz says ``assuming responsibility, including economically, for 3 million Palestinians would be a grave mistake.″

Israel argues that even though it reoccupied much of the West Bank and parts of Gaza in 2002, it is not required to provide services to civilians there because the Palestinian Authority assumed that role in the 1990s interim peace agreements.

Without donor support, the Palestinian Authority _ and with it Palestinian society _ could quickly collapse. The Palestinian government, which covers more than 60 percent of its budget with foreign aid, pays half the wages earned in the West Bank and Gaza.

Palestinian corruption and mismanagement, initially a major donor complaint, have become less of an issue with house-cleaning overseen by widely respected Finance Minister Salam Fayad, who will deliver the aid appeal in Rome.

The Palestinians’ pitch in Rome will be weakened by the failure of Prime Minister Ahmed Qureia this weekend to obtain a promise from militants to halt attacks on Israelis.

After the outbreak of the intefadeh in September 2000, foreign aid doubled to about $1 billion a year, but some say it will become increasingly difficult to keep the Palestinians afloat.

Under Israeli closures, every additional $1 billion in aid will only reduce the number of people living in poverty by about 6 percent, according to the World Bank. About 60 percent of Palestinians are now poor, living on less than $2 a day _ triple the pre-intefadeh poverty.

But relief workers have to obtain permits to move around, and delays in transport raise costs by 20 percent, making operations in the West Bank and Gaza the most expensive anywhere, Chris Patten, a top EU official, told Shalom this month.

Daniel Badwan, an Israeli liaison with the donors, said Israel is trying to balance security with a desire to facilitate aid.

But Israel’s actions took a toll. From December 2001 to September 2003, Israeli strikes against militants destroyed or damaged 39 EU-funded projects, including the Palestinian airport, seaport, broadcasting studios, roads, several U.N. schools and clinics, as well as sewage and water pipes.

Despite rising donor frustration, a pullout or cutback seems unlikely, said Jihad al-Wazir, the deputy Palestinian planning minister. ``The impact on the ordinary (Palestinian) would just be devastating.″

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