Not a prop for the peace process

The Palestinian-Israeli conflict is influenced a great deal by foreign aid contributions for the simple reason that the two parties are heavily dependent on these contributions in all respects. Israel, which is relatively less dependent on foreign aid, receives direct and indirect economic support from the United States and European Union, in addition, of course, to material support in the form of military assistance.

One can speak of two reasons Israel receives this monetary backing: first is the commitment that Europe has made to the survival of Israel as a form of compensation/support after the suffering of the Jewish people in Europe during World War II, but second and more important is the political self-interest that drives both American and European support. Israel plays a political and strategic role in the region that the United States and European countries believe advances their interests. Thus, most of the foreign aid that Israel receives is based on a mutual understanding over common interests, which enhances the durability and long life of that aid.

Palestinians, as the weaker party, are more dependent on foreign aid. Their assistance comes in part from Arab oil-producing countries, Saudi Arabia in particular, but also from the European Union and the United States. It comes at times in the form of government support for the Palestinian Authority, and at other times is extended through international development agencies to the Palestinian Authority or to Palestinian civil society organizations.

An analysis of the foreign aid that comes to Palestinians is more complicated because it is more varied. This aid is not based on perceived mutual interests, but rather on humanitarian grounds or as an attempt to influence the politics of the Palestinian people, whether internally (by trying to direct the public debate in a certain direction) or by bluntly trying to bend the political positions taken by the Palestinian people and their leadership. This stands true for foreign aid coming from Arab and non-Arab donors alike.

This characteristic, as well as Palestinian aid’s diverse disbursement, makes it less sustainable, more occasional and consequently less valuable and less influential. One can think of two periods that clearly illustrate the role of foreign aid in the conflict. When the Palestinian resistance was at its height in the 1970s and early 80s, Arab oil-producing countries wished to neutralize the growing political weight of Palestinians in pan-Arab politics, for example, and manipulated their monetary support accordingly. Later, from 1996 to 2000, the international donor community dangled foreign aid as a carrot and stick before the Palestinian Authority to influence its negotiating positions.

After the signing of the Oslo accords, attempts to tie foreign aid to improving the relations between Palestinians and Israelis (dubbed "people-to-people" programs) proved to be artificial. Foreign aid to Palestinians has played a crucial role in humanitarian support and development. However, the best outcomes for this aid have been restricted by the ongoing political conflict and the constraints placed on the Palestinian economy by the Israeli occupation and reoccupation. The naive aims of politically motivated support also devalued the foreign aid effort as a whole.

In the final analysis, attempts to use foreign aid as a means of consolidating the peace process have not been successful by any measure. The reason, of course, is not that making peace doesn’t require foreign aid, but that without accompanying political effort, foreign aid cannot compensate for defects and deficiencies in the structure of the political process between Palestinians and Israelis.