Contents
Abstract
I. Introduction
II. Core Factors in Effective Foreign Aid
- II.A. Structural Issues
- II.B. Political Questions
- II.C. Management Factors
III Situation Assessment
IV Structure of Foreign A id Mechanism in the Palestinian
Context
V Foreign Aid in the Palestinian Context. An Assessment
- V.A. Problems in Coordination
- V.B. Problems Stemming From Israeli Policies
- V.C. Problems Stemming from the Transitional Nature of
the Palestinian Economy, Government and Society
VI Economic Growth in the WBGV 1992-1996
VII Conclusions and Implications
Abstract
Foreign aid is a multi-level process, the effectiveness
of which can only be considered in the political and administrative context
of the country in question. This study is an attempt to provide a preliminary
assessment of the international aid to the Palestinian National Authority
(PNA). In this sense, and because the study represents the views of analysts
in an aid recipient country, this study is unique. Although it is still
too early for a full assessment of the impact and long-term consequences
of the current donor initiative, some preliminary conclusions can be drawn
at this stage. A close examination of the data confirms that one of the
most pressing immediate goals of foreign aid to Palestine is that
of political survival. This study highlights the need to reconsider
issues of sectoral priority, project selection and the choice of
development strategy by both local and international policy-makers
involved in the nation-building process ongoing in
the West Bank and Gaza Strip. These issues have become more complicated
due, on the one hand, to the prolonged border closures of the Palestinian
territories by Israel, most stringently since February 1996. On the other
hand, the situation has been compounded by the failure of the PNA to follow
a truly free market-oriented development strategy and to implement programs
and projects in line with clearly defined priorities. Finally, the interdependent
relationship of the commitment to peace and the commitment to development
is becoming rapidly more evident. The current obstacles hindering
Palestinian development will be viewed through the filter of the differing
political agendas of various players, particularly the United States and
Israel.
This is the second report of
the Jerusalem Media & Communication Centre project "Foreign
Aid and Development in Palestine". It represents the contributions
of Dr. Adel Zagha (Chairperson of the Economics Department at Birzeit
University) and Manal Jamal of the JMCC. Views in this report are
those of the authors and do not necessarily represent those
of the institutions to which they are affiliated.
Introduction
This report represents the culimination of Phase
11 of the JMCC project entitled "Foreign Aid and Development in Palestine".
The main aim of this project is to shed light on the current debate between
the donor community and Palestinians on whether or not donors are fulfilling
their commitments; and to examine whether the funds being given by the
donor community are being used in a constructive way which will help ensure
sustainable development, or whether they are instead helping to create
structural dependency.
In the first phase of the project, information on the
current status of the development initiative in the West Bank and Gaza
Strip (WBGS), including the amounts being donated, by which donors, and
to which sectors, was provided in a report published in June 1997. This,
the second phase of the project, is intended to be analytical in nature,
and to stimulate a discussion in the Palestinian arena on issues pertaining
to the donor community and Palestinian economic development priorities
in the WBGS. By examining - and questioning - the current development process,
the objective is to provoke a debate which will serve as a launching pad
to the third and final phase of this project, in which a local forum will
be firmly established and, accordingly, various components of the development
process can be prioritized and policy guidelines and recommendations formulated
and published.
By no means is this a comprehensive study of the Palestinian
economy and the donor community; the issues are far too numerous and complex.
We have attempted, however, to provide an opportunity for input from several
individuals involved directly and indirectly in the Palestinian economic
development process. It is our hope that by the end of the third phase
of this project, we will have succeeded in involving additional experts,
academics and policy-makers. It should be noted, however, that since interviews
and discussions were a main source of information in this phase, the accuracy
of information cannot always be confirmed.
This report is an attempt to examine in some depth the
role of foreign aid in the Palestinian development effort in order to understand
the causes of failure, and to draw some implications for decision-makers
both in the PNA and the donor community. The remainder of the report is
organized as follows: Section 11 discusses the core factors contributing
to effectiveness in foreign aid, drawing on the international experience;
Section III provides a brief assessment of the current socio/economic and
political situation in the WBGS in order to place the development debate
in context; Section IV details the structure of the foreign aid mechanism
in the Palestinian context; Section V assesses the role of foreign aid
in light of certain experiences in the Palestinian context; Section VI
summarises economic progress (or lack thereof) in the V*TBGS during the
period 1992-1996; and Section VII sums up the report and concludes with
some policy implications for both the PNA and the donor community.
