Mortgaging self-reliance: foreign aid and development in Palestine, phase report II

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 offoreign 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 beoming 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.