The Unintended Consequences of Destroying Palestine’s Aid Economy

Joseph Dana

When it comes to maintaining an occupation, the difficulty is in the details. Large-scale military maneuvers are easy when compared with managing the daily existence of millions of people. After close to five decades of military rule in the West Bank and Gaza Strip, Israel appears to have perfected the craft of occupation. One instrument with which it subdues the Palestinian people with ruthless efficiency are international aid organizations. But that is now about to change, as a result of some frantic decision making in Washington. And against all our instincts about justice for the Palestinians, the US’s decision to cut aid could, unwittingly, advance long-term benefit for Palestinians at the, admittedly harsh, cost of short-term pain.

When the Oslo Accords between Israel and the Palestinians went into effect in the mid-1990s, a host of multinational aid workers packed their bags for Palestine. The area was about to be handed over to nominal Palestinian control and someone needed to help build infrastructure for the nascent state. While it might seem straightforward to send in aid workers to set up schools, hospitals and help build roads, the nature of the work was highly political. From roads to water management systems, aid organizations were forced to work in lock step with Israeli authorities to get anything done. Far from helping Palestinians build the foundation for their new state, aid agencies ended up entrenching Israel’s control over Palestinian life.

The United States Agency for International Development (USAID) has since 1994 been one of the largest aid organizations operating in the West Bank and the Gaza Strip. The organization has delivered more than $5.5 billion in aid to the Palestinian Authority (PA) in the form of roads, schools, medical clinics and community centers. Over the last decade, USAID has focused on the delivery of medical aid to the Gaza Strip and the construction of a large water desalination plant for the besieged territory. However, the projects have been stalled since Hamas took over the Strip in 2007.

The surprise announcement this week that USAID would be ending operations in Palestine by January 2019 reveals the shocking nature of aid work in the occupied territories. The decision also raises serious questions about Donald Trump’s plans for Israeli-Palestinian peace going forward. While USAID has provided critical aid, it has been shown to be a tool that Israel and the United States use to punish independent Palestinian decision making.

Operating in close collaboration with the Israeli government, USAID has been the target of frequent criticism by Palestinians and international observers. In 2011, an investigation into USAID’s West Bank road building program revealed that the roads were helping Israel’s settlement project by connecting settlements to Israeli population centers. Additionally, no aid project can take place without the explicit permission of Israel, as all construction materials have to flow through Israeli checkpoints and border crossings.

The USAID closure highlights two additional points about international aid in Palestine. Since the Oslo Accords, aid organizations have worked exclusively with the PA. As an unelected interim government that is increasingly unpopular among Palestinians, the PA is often seen as a subcontractor for Israel’s rule. Through its well-funded security services, the PA is Israel’s first line of defense against Palestinian protest and civil disobedience. Inside the ghettoized hamlets of Ramallah and Bethlehem, the PA operates a virtual fiefdom that has done little to achieve independence over the last 25 years. With bloated aid budgets and weak financial controls, international organizations like USAID have propped up an elite ruling class of Palestinians in the so-called aid economy.

This is not an accident but a result by design. Having studied the fall of Apartheid in South Africa, Israeli military strategists, along with their American counterparts, created the PA with the hope that it would be the first line of defense for the occupation. Throughout the history of colonialism, local people have ruled themselves at the behest of the colonial master. Using international aid organizations with free-flowing budgets to deliver infrastructure and services to the Palestinians was a critical component of the PA’s creation. After all, the last thing Israel wants to do is to pay for Palestinian civic services and have to maintain the infrastructure itself. Why not have the international community do that?

This sober reality underpinning aid in Palestine raises serious questions about the Trump administration’s larger strategy for the conflict. Ostensibly, Washington wants to force the PA president, Mahmoud Abbas, to the negotiation table by starving organizations like USAID of funds. But this reveals a fundamental misunderstanding over how the occupation has been designed and functions on a day-to-day basis. Unsurprisingly, the Israeli government is alarmed at Trump’s plans to freeze aid, arguing that it could create a shock to the carefully guarded status quo.

After recognizing Jerusalem as Israel’s capital – a final-status issue for previous negotiators that would only be resolved once the occupation was on its deathbed – Trump appears to be throwing all the rules of the conflict out the window. What the US president doesn’t seem to understand is how Israel and the United States wrote the rulebook for this conflict.

But in the long run, Trump is doing the Palestinians an unintended favor. By depriving aid agencies like USAID of their funding in Palestine, the US administration is removing the occupation’s veneer of benevolence and one of the PA’s sources of legitimacy. When the aid runs dry, conditions for Palestinians will worsen and the PA will come under new threats from within. Given its history of collaboration with Israel and its inability to achieve independence, the PA is a roadblock to peace that will have to be removed for any equitable solution to take root. Despite all odds, Trump might be the one who kickstarts this process.

Joseph Dana, based between South Africa and the Middle East, is editor-in-chief of emerge85, a lab that explores change in emerging markets and its global impact. 

AFP Photo/Jaafar ASHTIYEH