Record Donations to Palestinians Raise Questions

Reuters Exclusive, March 6, 2009 - Rich states and investors have announced a record $14 billion to aid the Palestinians and their economy in a string of Western-backed meetings meant to boost President Mahmoud Abbas in his power struggle with Hamas.

But diplomats said many of the pledges made at five donor and investor conferences held since December 2007, including one in Egypt on Monday, were counted more than once, have yet to materialise or were too vague to rely on.

Much of the money depends on Israel fully opening border crossings with Hamas-ruled Gaza, and lifting restrictions in the occupied West Bank where Abbas's Palestinian Authority holds sway, or has been linked to progress in stalled peace talks and Palestinian reconciliation, casting doubt on future payouts.

One senior Western diplomat criticised the pledging process as "smoke and mirrors" because of double-counting. Another said the big-figure headlines from donors eager to look forthcoming, combined with a lack of transparency, were "getting ridiculous", noting that despite the cascade of pledges, the Authority was still struggling to pay full wages to its workers on time.

Conference organisers have disclosed little about individual donor pledges or disbursement schedules, making it difficult to track how much money was really in the pipeline for Abbas.

Donors also differ over how to deliver their aid, underscoring divisions over isolating Hamas, which has decried the pledging process as financial "blackmail" to marginalise the group after its 2006 election victory. Israel and the United States say they want to prevent any money from going to the Islamists, who they consider "terrorists".

Record Pledges

The large sums announced at conferences in Paris, Berlin, the Egyptian resort of Sharm el-Sheikh and the West Bank over the last 15 months -- $12 billion from governments and $2 billion from investors -- were unprecedented by Palestinian standards, eclipsing the amount the Authority received in the previous 14 years since the 1993 Oslo peace accords.

Combined, the pledges would be the equivalent of $3,500 for every man, woman and child in the West Bank and Gaza, more than double per capita Palestinian GDP. Half of Gaza's 1.5 million population live on less than $3 a day, by Palestinian estimates.

It is unclear how much of the $4.5 billion in "new commitments", announced at Monday's conference in Sharm to help rebuild the Gaza Strip after Israel's devastating offensive, were really new, said Western diplomats who took part.

Diplomats and analysts pointed to the large discrepancy between what the Palestinian Authority asked for at Sharm -- $2.8 billion over two years -- and what was announced as an indication that the numbers were not realistic....