U.S. economic aid to the west bank and gaza strip: The politics of peace

Middle East Policy

Volumn 4, Issue 4, 1996, Pages 50-76

  Roy, Sara ^a  

^a HARVARD UNIVERSITY   (United States)

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[No Author keywords available]

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EID: 0030493880     PISSN: 10611924     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1475-4967.1996.tb00237.x     Document Type: Article

References (174)

1. For a detailed study of this point, see Sara Roy, The Gaza Strip: The Political Economy of Development (Washington, DC: Institute for Palestine Studies, 1995).
2. The Declaration of Principles provides the over-all framework for the sharing of power and responsibility in the West Bank and Gaza Strip during the five-year transitional period (1994-99) before a permanent solution has been reached. The Paris Agreement describes the economic powers of the Palestinian Authority in the West Bank and Gaza. The Cairo Agreement delineates the administrative powers and responsibilities of the Palestinians in the Gaza Strip and Jericho only during the preparatory period. And the Taba Agreement describes the administrative powers and responsibilities of the Palestinians in the West Bank.
3. Of the U.S. pledge, $375 million is to be disbursed through USAID for project work and $125 million is allocated for private-sector guarantees administered by the Overseas Private Investment Corporation (OPIC).
4. See Sara Roy, "Development Under Occupation?: The Political Economy of U.S. Aid to the West Bank and Gaza Strip," Arab Studies Quarterly 13, nos. 3 and 4 (Summer/Fall 1991): 65-89, from which the history section is drawn. Research for this study began in 1985 and was the subject of the author's doctoral dissertation. See Sara Roy, "Development Under Occupation: A Study of United States Government Economic Development Assistance to the Palestinian People in the West Bank and Gaza Strip, 1975-1985" (Doctoral diss., Harvard University, 1988). Much of the data is based on more than 150 formal interviews. Individual interviews will be cited when necessary.
5. See Sara Roy, "Development Under Occupation?: The Political Economy of U.S. Aid to the West Bank and Gaza Strip," Arab Studies Quarterly 13, nos. 3 and 4 (Summer/Fall 1991): 65-89, from which the history section is drawn. Research for this study began in 1985 and was the subject of the author's doctoral dissertation. See Sara Roy, "Development Under Occupation: A Study of United States Government Economic Development Assistance to the Palestinian People in the West Bank and Gaza Strip, 1975-1985" (Doctoral diss., Harvard University, 1988). Much of the data is based on more than 150 formal interviews. Individual interviews will be cited when necessary.
6. Some particularly interesting works in the field include: Robert J. Berg and David F. Gordon (eds.), Cooperation for International Development: The United States and the Third World in the 1990s (Boulder, CO: Lynne Rienner Publishers, 1989);
7. Allan Bloom, The Closing of the American Mind (New York: Simon and Schuster, 1987);
8. Development Issues: U.S. Actions Affecting Developing Countries (Washington, DC: Development Coordination Committee, 1983);
9. Stephen Hellinger, Douglas Hellinger and Fred M. O Regan, Aid for Just Development: Report on the Future of Foreign Assistance (Boulder, CO: Lynne Rienner Publishers, 1988);
10. E. R. Morss and V.A. Morss, U.S. Foreign Aid: An Assessment of New and Traditional Development Strategies (Boulder, CO: Westview Press, 1982);
11. John W. Sewell and John A. Mathieson, The Ties That Bind: U.S. Interests and Third World Development (Washington, DC: Overseas Development Council, 1982);
12. and Judith Tendler, Inside Foreign Aid (Baltimore, MD: the Johns Hopkins University Press, 1975).
13. Hellinger et al., op. cit., p. 15.
14. This theory is detailed in W.W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge: Cambridge University Press, 1960).
15. Hellinger et al., op. cit., pp. 14-16.
16. Ibid., pp. 22-28. These legislative changes (e.g., Title IX [1966], the New Directions legislation [mid 1970s] and the International Development Cooperation Act [1978]) alternately focused the aid community on a more people-centered "growth with equity" approach to development that emphasized the basic needs of the poor, rural development and employment generation as well as export-led growth, foreign investment, free trade, free enterprise and private-sector development. The impact of these changes on USAID's internal structure and its relationship with Congress and other government agencies can be found in Alien Hoben, "USAID: Organizational and Institutional Effectiveness," in Robert J. Berg and David F. Gordon (eds.), op. cit., pp. 253-278. For an interesting discussion, see E. R. Morss and V. A. Morss, op. cit., chapter 5.
17. Ibid., pp. 22-28. These legislative changes (e.g., Title IX [1966], the New Directions legislation [mid 1970s] and the International Development Cooperation Act [1978]) alternately focused the aid community on a more people-centered "growth with equity" approach to development that emphasized the basic needs of the poor, rural development and employment generation as well as export-led growth, foreign investment, free trade, free enterprise and private-sector development. The impact of these changes on USAID's internal structure and its relationship with Congress and other government agencies can be found in Alien Hoben, "USAID: Organizational and Institutional Effectiveness," in Robert J. Berg and David F. Gordon (eds.), op. cit., pp. 253-278. For an interesting discussion, see E. R. Morss and V. A. Morss, op. cit., chapter 5.
18. Ibid., pp. 22-28. These legislative changes (e.g., Title IX [1966], the New Directions legislation [mid 1970s] and the International Development Cooperation Act [1978]) alternately focused the aid community on a more people-centered "growth with equity" approach to development that emphasized the basic needs of the poor, rural development and employment generation as well as export-led growth, foreign investment, free trade, free enterprise and private-sector development. The impact of these changes on USAID's internal structure and its relationship with Congress and other government agencies can be found in Alien Hoben, "USAID: Organizational and Institutional Effectiveness," in Robert J. Berg and David F. Gordon (eds.), op. cit., pp. 253-278. For an interesting discussion, see E. R. Morss and V. A. Morss, op. cit., chapter 5.
19. Ibid., pp. 22-28. These legislative changes (e.g., Title IX [1966], the New Directions legislation [mid 1970s] and the International Development Cooperation Act [1978]) alternately focused the aid community on a more people-centered "growth with equity" approach to development that emphasized the basic needs of the poor, rural development and employment generation as well as export-led growth, foreign investment, free trade, free enterprise and private-sector development. The impact of these changes on USAID's internal structure and its relationship with Congress and other government agencies can be found in Alien Hoben, "USAID: Organizational and Institutional Effectiveness," in Robert J. Berg and David F. Gordon (eds.), op. cit., pp. 253-278. For an interesting discussion, see E. R. Morss and V. A. Morss, op. cit., chapter 5.
20. Development Issues: U.S. Actions Affecting Developing Countries, p. 175.
21. Ibid, pp. 175-176.
22. Hellinger et al., op. cit., p. 54.
23. Ibid, p. 28.
24. Hoben, op. cit., p. 273, writes, "In 1985 alone, USAID provided 849 congressional notifications totaling 1,700 pages. The agency estimates that it devotes more than 200 person-years per year to its interaction with Congress."
25. Ibid., pp. 264-266.
26. American Council for Voluntary International Action, "West Bank/Gaza Meeting: Minutes of briefing with USAID on August 14, 1995," Washington, DC.
27. Some early articles dealing with the U.S. program include: Bishara A. Bahbah, "U.S. Aid to the Occupied Territories," American-Arab Affairs (Fall 1985): 75-80; Meron Benvenisti, U.S. Government Funded Projects in the West Bank and Gaza (1977-1983) (Jerusalem: The West Bank Data Base Project, 1984); Leopold Yehuda Laufer, "U.S. Aid to the West Bank and Gaza: Policy Dilemmas," in Dynamics of Dependence: U.S.-Israeli Relations, ed. Gabriel Sheffer (Boulder, CO: Westview Press, 1987), pp. 165-200; Joe Lockard, "U.S. Aid: Subsidizing Collective Punishment," American-Arab Affairs (Summer 1989): pp. 65-74; John P. Richardson, "Tug-of-War: American Voluntary Organizations in the West Bank," Journal of Palestine Studies (Winter 1985): 137-148; and Joyce Starr, Development Diplomacy: U.S. Economic Assistance to the West Bank and Gaza (Washington, DC: The Washington Institute for Near East Policy, 1989).
28. Some early articles dealing with the U.S. program include: Bishara A. Bahbah, "U.S. Aid to the Occupied Territories," American-Arab Affairs (Fall 1985): 75-80; Meron Benvenisti, U.S. Government Funded Projects in the West Bank and Gaza (1977-1983) (Jerusalem: The West Bank Data Base Project, 1984); Leopold Yehuda Laufer, "U.S. Aid to the West Bank and Gaza: Policy Dilemmas," in Dynamics of Dependence: U.S.-Israeli Relations, ed. Gabriel Sheffer (Boulder, CO: Westview Press, 1987), pp. 165-200; Joe Lockard, "U.S. Aid: Subsidizing Collective Punishment," American-Arab Affairs (Summer 1989): pp. 65-74; John P. Richardson, "Tug-of-War: American Voluntary Organizations in the West Bank," Journal of Palestine Studies (Winter 1985): 137-148; and Joyce Starr, Development Diplomacy: U.S. Economic Assistance to the West Bank and Gaza (Washington, DC: The Washington Institute for Near East Policy, 1989).
29. Some early articles dealing with the U.S. program include: Bishara A. Bahbah, "U.S. Aid to the Occupied Territories," American-Arab Affairs (Fall 1985): 75-80; Meron Benvenisti, U.S. Government Funded Projects in the West Bank and Gaza (1977-1983) (Jerusalem: The West Bank Data Base Project, 1984); Leopold Yehuda Laufer, "U.S. Aid to the West Bank and Gaza: Policy Dilemmas," in Dynamics of Dependence: U.S.-Israeli Relations, ed. Gabriel Sheffer (Boulder, CO: Westview Press, 1987), pp. 165-200; Joe Lockard, "U.S. Aid: Subsidizing Collective Punishment," American-Arab Affairs (Summer 1989): pp. 65-74; John P. Richardson, "Tug-of-War: American Voluntary Organizations in the West Bank," Journal of Palestine Studies (Winter 1985): 137-148; and Joyce Starr, Development Diplomacy: U.S. Economic Assistance to the West Bank and Gaza (Washington, DC: The Washington Institute for Near East Policy, 1989).
30. Some early articles dealing with the U.S. program include: Bishara A. Bahbah, "U.S. Aid to the Occupied Territories," American-Arab Affairs (Fall 1985): 75-80; Meron Benvenisti, U.S. Government Funded Projects in the West Bank and Gaza (1977-1983) (Jerusalem: The West Bank Data Base Project, 1984); Leopold Yehuda Laufer, "U.S. Aid to the West Bank and Gaza: Policy Dilemmas," in Dynamics of Dependence: U.S.-Israeli Relations, ed. Gabriel Sheffer (Boulder, CO: Westview Press, 1987), pp. 165-200; Joe Lockard, "U.S. Aid: Subsidizing Collective Punishment," American-Arab Affairs (Summer 1989): pp. 65-74; John P. Richardson, "Tug-of-War: American Voluntary Organizations in the West Bank," Journal of Palestine Studies (Winter 1985): 137-148; and Joyce Starr, Development Diplomacy: U.S. Economic Assistance to the West Bank and Gaza (Washington, DC: The Washington Institute for Near East Policy, 1989).
31. Some early articles dealing with the U.S. program include: Bishara A. Bahbah, "U.S. Aid to the Occupied Territories," American-Arab Affairs (Fall 1985): 75-80; Meron Benvenisti, U.S. Government Funded Projects in the West Bank and Gaza (1977-1983) (Jerusalem: The West Bank Data Base Project, 1984); Leopold Yehuda Laufer, "U.S. Aid to the West Bank and Gaza: Policy Dilemmas," in Dynamics of Dependence: U.S.-Israeli Relations, ed. Gabriel Sheffer (Boulder, CO: Westview Press, 1987), pp. 165-200; Joe Lockard, "U.S. Aid: Subsidizing Collective Punishment," American-Arab Affairs (Summer 1989): pp. 65-74; John P. Richardson, "Tug-of-War: American Voluntary Organizations in the West Bank," Journal of Palestine Studies (Winter 1985): 137-148; and Joyce Starr, Development Diplomacy: U.S. Economic Assistance to the West Bank and Gaza (Washington, DC: The Washington Institute for Near East Policy, 1989).
32. Some early articles dealing with the U.S. program include: Bishara A. Bahbah, "U.S. Aid to the Occupied Territories," American-Arab Affairs (Fall 1985): 75-80; Meron Benvenisti, U.S. Government Funded Projects in the West Bank and Gaza (1977-1983) (Jerusalem: The West Bank Data Base Project, 1984); Leopold Yehuda Laufer, "U.S. Aid to the West Bank and Gaza: Policy Dilemmas," in Dynamics of Dependence: U.S.-Israeli Relations, ed. Gabriel Sheffer (Boulder, CO: Westview Press, 1987), pp. 165-200; Joe Lockard, "U.S. Aid: Subsidizing Collective Punishment," American-Arab Affairs (Summer 1989): pp. 65-74; John P. Richardson, "Tug-of-War: American Voluntary Organizations in the West Bank," Journal of Palestine Studies (Winter 1985): 137-148; and Joyce Starr, Development Diplomacy: U.S. Economic Assistance to the West Bank and Gaza (Washington, DC: The Washington Institute for Near East Policy, 1989).
33. Official USAID documents state, 'The West Bank and Gaza program was initiated in FY 1975 to demonstrate American concern for the humanitarian and economic development needs of Palestinians in the Occupied Territories, and to support U.S. efforts to peacefully resolve the Arab-Israeli conflict." Agency for International Development, Congressional Presentation, Fiscal Year 1992 (Washington, DC: AID, February 1991), p. 663.
34. House Committee on International Relations, International Security Assistance Act of 1977: Report of the Committee on International Relations, House Report No. 95-247, 1977, p. 21. Also see House Committee on Foreign Affairs, Foreign Assistance Act of 1974: Report of the Committee on Foreign Affairs, House Report No. 93-1471, 1974, p. 26; and House Committee on Appropriations, Foreign Assistance and Related Programs-Appropriation Bill: Report of the Committee on Appropriations, House Report No. 94-53, 1975, p. 32.
35. House Committee on International Relations, International Security Assistance Act of 1977: Report of the Committee on International Relations, House Report No. 95-247, 1977, p. 21. Also see House Committee on Foreign Affairs, Foreign Assistance Act of 1974: Report of the Committee on Foreign Affairs, House Report No. 93-1471, 1974, p. 26; and House Committee on Appropriations, Foreign Assistance and Related Programs-Appropriation Bill: Report of the Committee on Appropriations, House Report No. 94-53, 1975, p. 32.
36. House Committee on International Relations, International Security Assistance Act of 1977: Report of the Committee on International Relations, House Report No. 95-247, 1977, p. 21. Also see House Committee on Foreign Affairs, Foreign Assistance Act of 1974: Report of the Committee on Foreign Affairs, House Report No. 93-1471, 1974, p. 26; and House Committee on Appropriations, Foreign Assistance and Related Programs-Appropriation Bill: Report of the Committee on Appropriations, House Report No. 94-53, 1975, p. 32.
37. Palestinians articulated three priorities to American officials: the establishment of an Arab bank in both territories; the lifting of restrictions on the flow of funds from Arab sources; and Israeli government approval for large-scale industrial projects that had consistently been denied.
38. For a detailed discussion of the problem, see Sara Roy, "Separation or Integration: Closure and the Economic Future of the Gaza Strip Revisited," Middle East Journal 48, no. 1 (Winter 1994): 12-21.
39. The core community of PVOs included American Near East Relief Agency (ANERA), American-Mideast Education and Training Services (AMIDEAST), Catholic Relief Services (CRS), Save the Children Federation (SCF), Cooperative Development Program (CDP), the YMCA and the Society for the Care of the Handicappd (SCH), the only Palestinian PVO. Throughout the life of the program, some PVOs left while others joined.
40. Both the consulate and embassy had a part-time foreign-service officer assigned to the PVO program.
41. See General Accounting Office, U.S. Economic Aid for the West Bank and Gaza Strip-A Positive Contribution (Washington, DC: GAO, 1978); USAID, U.S. Economic Assistance to the West Bank and Gaza: A Positive Contribution to the Palestinian People from the American People, March 1989; and Department of State, Bureau of Near Eastern and South Asian Affairs, Interim Report on Economic Assistance to the West Bank and Gaza, July 1976. The last of these documents contains the earliest statement on goals and objectives of the U.S. program. These goals were broad: development of a local leadership that can function independently when the political status of the West Bank and Gaza has been determined; establishment of constructive contacts with the Palestinian people; development of skills training, agriculture, rural development and income-generating capabilities; development of health services including public health; and encouragement of self-help projects that can build up the physical and social infrastructure.
42. See General Accounting Office, U.S. Economic Aid for the West Bank and Gaza Strip-A Positive Contribution (Washington, DC: GAO, 1978); USAID, U.S. Economic Assistance to the West Bank and Gaza: A Positive Contribution to the Palestinian People from the American People, March 1989; and Department of State, Bureau of Near Eastern and South Asian Affairs, Interim Report on Economic Assistance to the West Bank and Gaza, July 1976. The last of these documents contains the earliest statement on goals and objectives of the U.S. program. These goals were broad: development of a local leadership that can function independently when the political status of the West Bank and Gaza has been determined; establishment of constructive contacts with the Palestinian people; development of skills training, agriculture, rural development and income-generating capabilities; development of health services including public health; and encouragement of self-help projects that can build up the physical and social infrastructure.
43. See General Accounting Office, U.S. Economic Aid for the West Bank and Gaza Strip-A Positive Contribution (Washington, DC: GAO, 1978); USAID, U.S. Economic Assistance to the West Bank and Gaza: A Positive Contribution to the Palestinian People from the American People, March 1989; and Department of State, Bureau of Near Eastern and South Asian Affairs, Interim Report on Economic Assistance to the West Bank and Gaza, July 1976. The last of these documents contains the earliest statement on goals and objectives of the U.S. program. These goals were broad: development of a local leadership that can function independently when the political status of the West Bank and Gaza has been determined; establishment of constructive contacts with the Palestinian people; development of skills training, agriculture, rural development and income-generating capabilities; development of health services including public health; and encouragement of self-help projects that can build up the physical and social infrastructure.
44. USAID, Strategy Statement: The Direct West Bank/Gaza Program And The Jordan West Bank/Gaza Development Program (Washington, DC: Department of State, October 27, 1987), pp. 11-16.
45. Funding levels (in $ millions) for the West Bank/Gaza program are: 1975-1.0; 1976-1.6; 1977-3.4; 1978-2.8; 1979-6.8; 1980-3.0; 1981-2.5; 1982-6.0; 1983-6.5; 1984-8.5; 1985-12.1; 1986-14.0; 1987-8.5; 1988-22.0 [which included 7.0 designated for the Jordanian plan]; 1989-12.0; 1990-12.0; 1991-14.3; 1992-10.1; 1993-26.6; 1994-1998-75.0 annually.
46. Interview with senior official in the U.S. State Department who asked not to be identified, Washington, DC, December 1995. [NOTE: Given the political sensitivity surrounding the U.S. aid program, most respondents asked not to be identified. Names will only be cited when permission was given.]
47. Numerous interviews 1993-1996 with officials of the U.S. State Department, USAID and the World Bank support this.
48. Representative Lee Hamilton, "The Challenge of Appropriating Funds for Development Assistance in a Time of Scarcity," Middle East Policy Council panel on U.S. Development Assistance to the Middle East: Critical Perspectives, Capitol Hill Conference Series on U.S.-Middle East Policy, Rayburn House Office Building, Washington, DC, February 27, 1996 (see proceedings in this issue).
49. Thomas W. Lippman, "The Decline of U.S. Diplomacy: Budget Cuts Lead to a Shrinking American Presence Overseas," TheWashington Post National Weekly Edition, July 22-28, 1996, p. 6.
50. Agreement on the Gaza Strip and Jericho Area, Cairo, May 4, 1994, Annex I/Protocol Concerning Withdrawal Of Israeli Military Forces And Security Arrangements, Article VII, Clause 9. This is also made clear in Joel Singer, "The Declaration of Principles on Interim Self-Government Arrangements: Some Legal Aspects," Justice, no. 1 (February 1994): 4-13.
51. Agreement on the Gaza Strip and Jericho Area, Cairo, May 4, 1994, Annex I/Protocol Concerning Withdrawal Of Israeli Military Forces And Security Arrangements, Article VII, Clause 9. This is also made clear in Joel Singer, "The Declaration of Principles on Interim Self-Government Arrangements: Some Legal Aspects," Justice, no. 1 (February 1994): 4-13.
52. Meron Benvenisti, "An Agreement of Surrender," Ha'aretz, May 12, 1994; and Article IX of the Declaration of Principles.
53. Agreement, Cairo, May 4, 1994, Article VIII, Clause 1; Annex I/Protocol Concerning Withdrawal Of Israeli Military Forces And Security Arrangements, Article VII, Clause 6; and Singer, op. cit.
54. Ibid.
55. Sara Roy, "Development or Dependency? The Gaza Strip Economy Under Limited Self-Rule, The Beirut Review, no. 8 (Fall 1994): 72-73.
56. Foreign Investment Advisory Service, West Bank and Gaza: Creating a Framework for Foreign Direct Investment, Internal Document, International Finance Corporation and The World Bank, Washington, DC, June 1995, p. 3.
57. Benvenisti in Ha'aretz.
58. The general closure violates the Oslo II Agreement, which provides that, "in order to maintain the territorial integrity of the West Bank and Gaza Strip as a single territorial unit, and to promote their economic growth and the demographic and geographic links between them, both sides shall implement the provisions of [the Protocol Concerning Redeployment and Security Arrangements], while respecting and preserving without obstacles, normal and smooth movement of people, vehicles and goods within the West Bank and between the West Bank and Gaza Strip." See Israeli-Palestinian Interim Agreement on the West Bank and Gaza Strip, Annex I, Article I, Paragraph 2. Also see, Human Rights Watch/Middle East, Israel: Israel's Closure of the West Bank and Gaza Strip, volume 8, no. 3, July 1996. Interviews with a number of officials in the U.S. State Department, USAID and the World Bank indicated that while donor protests are made to the government of Israel privately, they will not be made publicly.
59. The general closure violates the Oslo II Agreement, which provides that, "in order to maintain the territorial integrity of the West Bank and Gaza Strip as a single territorial unit, and to promote their economic growth and the demographic and geographic links between them, both sides shall implement the provisions of [the Protocol Concerning Redeployment and Security Arrangements], while respecting and preserving without obstacles, normal and smooth movement of people, vehicles and goods within the West Bank and between the West Bank and Gaza Strip." See Israeli-Palestinian Interim Agreement on the West Bank and Gaza Strip, Annex I, Article I, Paragraph 2. Also see, Human Rights Watch/Middle East, Israel: Israel's Closure of the West Bank and Gaza Strip, volume 8, no. 3, July 1996. Interviews with a number of officials in the U.S. State Department, USAID and the World Bank indicated that while donor protests are made to the government of Israel privately, they will not be made publicly.
60. See Sara Roy, The Beirut Review, op. cit., pp. 59-79.
61. This point was made in an interview with the Israeli economist, Ezra Sadan, Tel Aviv, January 1996, and is clearly demonstrated in Protocol on Economic Relations Between the Government of the State of Israel and the PLO Representing the Palestinian People, Paris, April 29, 1994. Also see, Singer, op. cit.; Foreign Investment Advisory Service, op. cit.; and Roy, The Beirut Review, op. cit. For a more positive interpretation of the economic agreements, see Ephraim Kleiman, "The Economic Provisions of the Agreement Between Israel and the PLO," Israel Law Review 28, nos. 2-3 (Spring-Summer 1994): 347-373; and "West Bank and Gaza Strip Adopts Outward-Oriented Economic Strategy," IMF Survey, January 22, 1996, pp. 25-28.
62. This point was made in an interview with the Israeli economist, Ezra Sadan, Tel Aviv, January 1996, and is clearly demonstrated in Protocol on Economic Relations Between the Government of the State of Israel and the PLO Representing the Palestinian People, Paris, April 29, 1994. Also see, Singer, op. cit.; Foreign Investment Advisory Service, op. cit.; and Roy, The Beirut Review, op. cit. For a more positive interpretation of the economic agreements, see Ephraim Kleiman, "The Economic Provisions of the Agreement Between Israel and the PLO," Israel Law Review 28, nos. 2-3 (Spring-Summer 1994): 347-373; and "West Bank and Gaza Strip Adopts Outward-Oriented Economic Strategy," IMF Survey, January 22, 1996, pp. 25-28.
63. This point was made in an interview with the Israeli economist, Ezra Sadan, Tel Aviv, January 1996, and is clearly demonstrated in Protocol on Economic Relations Between the Government of the State of Israel and the PLO Representing the Palestinian People, Paris, April 29, 1994. Also see, Singer, op. cit.; Foreign Investment Advisory Service, op. cit.; and Roy, The Beirut Review, op. cit. For a more positive interpretation of the economic agreements, see Ephraim Kleiman, "The Economic Provisions of the Agreement Between Israel and the PLO," Israel Law Review 28, nos. 2-3 (Spring-Summer 1994): 347-373; and "West Bank and Gaza Strip Adopts Outward-Oriented Economic Strategy," IMF Survey, January 22, 1996, pp. 25-28.
64. This point was made in an interview with the Israeli economist, Ezra Sadan, Tel Aviv, January 1996, and is clearly demonstrated in Protocol on Economic Relations Between the Government of the State of Israel and the PLO Representing the Palestinian People, Paris, April 29, 1994. Also see, Singer, op. cit.; Foreign Investment Advisory Service, op. cit.; and Roy, The Beirut Review, op. cit. For a more positive interpretation of the economic agreements, see Ephraim Kleiman, "The Economic Provisions of the Agreement Between Israel and the PLO," Israel Law Review 28, nos. 2-3 (Spring-Summer 1994): 347-373; and "West Bank and Gaza Strip Adopts Outward-Oriented Economic Strategy," IMF Survey, January 22, 1996, pp. 25-28.
65. This point was made in an interview with the Israeli economist, Ezra Sadan, Tel Aviv, January 1996, and is clearly demonstrated in Protocol on Economic Relations Between the Government of the State of Israel and the PLO Representing the Palestinian People, Paris, April 29, 1994. Also see, Singer, op. cit.; Foreign Investment Advisory Service, op. cit.; and Roy, The Beirut Review, op. cit. For a more positive interpretation of the economic agreements, see Ephraim Kleiman, "The Economic Provisions of the Agreement Between Israel and the PLO," Israel Law Review 28, nos. 2-3 (Spring-Summer 1994): 347-373; and "West Bank and Gaza Strip Adopts Outward-Oriented Economic Strategy," IMF Survey, January 22, 1996, pp. 25-28.
66. This point was made in an interview with the Israeli economist, Ezra Sadan, Tel Aviv, January 1996, and is clearly demonstrated in Protocol on Economic Relations Between the Government of the State of Israel and the PLO Representing the Palestinian People, Paris, April 29, 1994. Also see, Singer, op. cit.; Foreign Investment Advisory Service, op. cit.; and Roy, The Beirut Review, op. cit. For a more positive interpretation of the economic agreements, see Ephraim Kleiman, "The Economic Provisions of the Agreement Between Israel and the PLO," Israel Law Review 28, nos. 2-3 (Spring-Summer 1994): 347-373; and "West Bank and Gaza Strip Adopts Outward-Oriented Economic Strategy," IMF Survey, January 22, 1996, pp. 25-28.
67. IMF Survey, ibid., p. 27, notes that although normal labor movements will be maintained between the PA and Israel, "each side has the right to determine the extent and conditions of labor movements into its own areas."
68. Interview, Tel Aviv, January 1996.
69. Foreign Investment Advisory Service, op. cit., p. 3.
70. See U.S. Government Printing Office, Foreign Assistance Legislation For Fiscal Year 1994 (Part 2), Hearings Before the Subcommittee on Europe and the Middle East of the Committee on Foreign Affairs House of Representatives 103rd Congress, Economic and Military Aid Programs in Europe and the Middle East, April 28 and May 11, 1993, Washington, DC, p. 76, for a statement by Edward P. Djerejian, assistant secretary of state, Bureau of Near Eastern Affairs, articulating this position.
71. See U.S. Government Printing Office, Foreign Assistance Legislation For Fiscal Year 1994 (Part 2), Hearings Before the Subcommittee on Europe and the Middle East of the Committee on Foreign Affairs House of Representatives 103rd Congress, Economic and Military Aid Programs in Europe and the Middle East, April 28 and May 11, 1993, Washington, DC, p. 76, for a statement by Edward P. Djerejian, assistant secretary of state, Bureau of Near Eastern Affairs, articulating this position.
72. Hamilton, op. cit.
73. This battle is clearly discussed in an internal AID document entitled, "USAID West Bank-Gaza Strip (WBG) Program: One PVO Employee Perspective," June 15, 1992, that reads, "USAID and the Department of State are in fundamental conflict over USG management requirements for the WBG assistance program. The continuing stalemate jeopardizes the ongoing program itself and specifically the ability of the implementing U.S. [PVOs] to plan, spend, and finance projects." Also see Elaine Sciolino, "State Department May Absorb 3 Independent Agencies," The New York Times, January 11, 1995.
74. This battle is clearly discussed in an internal AID document entitled, "USAID West Bank-Gaza Strip (WBG) Program: One PVO Employee Perspective," June 15, 1992, that reads, "USAID and the Department of State are in fundamental conflict over USG management requirements for the WBG assistance program. The continuing stalemate jeopardizes the ongoing program itself and specifically the ability of the implementing U.S. [PVOs] to plan, spend, and finance projects." Also see Elaine Sciolino, "State Department May Absorb 3 Independent Agencies," The New York Times, January 11, 1995.
75. Rex Brynen, "Buying Peace? A Critical Assessment of International Aid to the West Bank and Gaza," Journal of Palestine Studies XXV, no. 3 (Spring 1996): 80. One high-ranking State Department official in Washington characterized USAID as "theologically oriented to the long term."
76. A.M. Rosenthal, "Aid, Congress and a Mother-in-Law," The New York Times, June 12, 1995.
77. See U.S. Department of State, Report Pursuant to Title VIII of Public Law 101-246 Foreign Relations Authorization Act for Fiscal Year 1990-91, As Amended, Washington, DC, December 1, 1995.
78. In early 1996, Congress withheld $10 million that was earmarked to pay the salaries of teachers and healthcare workers employed by the Palestinian Authority. See Steven Erlanger, "Intelligence Experts Meet to Combat Mideast Terrorism, The New York Times, March 30, 1996; and Matthew Dorf, "Intense congressional scrutiny expected on future aid for PLO," Jewish Telegraphic Agency, The Metro West Jewish News, January 26, 1995.
79. In early 1996, Congress withheld $10 million that was earmarked to pay the salaries of teachers and healthcare workers employed by the Palestinian Authority. See Steven Erlanger, "Intelligence Experts Meet to Combat Mideast Terrorism, The New York Times, March 30, 1996; and Matthew Dorf, "Intense congressional scrutiny expected on future aid for PLO," Jewish Telegraphic Agency, The Metro West Jewish News, January 26, 1995.
80. The reason is that Jerusalem is Israel's capital. Hence, any official or diplomatic exchange between Palestinians and Americans should take place in the Palestinian autonomous areas.
81. Interviews with senior-level officials, U.S. Department of State, Washington, DC, December 1995, February and May 1996.
82. Ibid.
83. This point was reiterated by several different USAID officials.
84. Interview with senior level official, the World Bank, Washington, DC, December 1995.
85. See, United States General Accounting Office, Foreign Assistance: Reforming the Economic Aid Program, Testimony Before the Committee on Foreign Affairs, U.S. House of Representatives, Statement of Frank C. Conahan, July 26, 1993, Washington, DC.
86. For more on assistance to the West Bank and Gaza, see Joachim Zaucker et al., Toward Middle East Peace and Development: International Assistance to Palestinians and The Role of NGOs during the Transition to Civil Society, Interaction Occasional Paper, Washington, DC, December 1995; The United Nations and The World Bank, Putting Peace to Work: Organizational Structure of Donor Coordination Mechanisms in the West Bank and the Gaza Strip, and a Profile of the Sector Working Groups (SWG), Gaza City, October 1995; idem, Putting Peace to Work: Strategies and Priorities for the Second Phase of the Development Effort in the West Bank and Gaza Strip, Gaza. City, September 1995; The Secretariat of the Ad Hoc Liaison Committee and The Office of Aid Coordination and Facilitation/PECDAR, Analysis: Matrix of Donors' Assistance to the West Bank and Gaza, Third Revision, July 1995; and idem, Attachment: Matrix of Donors' Assistance to the West Bank and Gaza, July 1995; The World Bank, Emergency Assistance to the Occupied Territories, Volumes 1-2, Washington, DC, March 1994; and The World Bank, Developing the Occupied Territories: An Investment in Peace, Volumes 1-6, Washington, DC, September 1993.
87. For more on assistance to the West Bank and Gaza, see Joachim Zaucker et al., Toward Middle East Peace and Development: International Assistance to Palestinians and The Role of NGOs during the Transition to Civil Society, Interaction Occasional Paper, Washington, DC, December 1995; The United Nations and The World Bank, Putting Peace to Work: Organizational Structure of Donor Coordination Mechanisms in the West Bank and the Gaza Strip, and a Profile of the Sector Working Groups (SWG), Gaza City, October 1995; idem, Putting Peace to Work: Strategies and Priorities for the Second Phase of the Development Effort in the West Bank and Gaza Strip, Gaza. City, September 1995; The Secretariat of the Ad Hoc Liaison Committee and The Office of Aid Coordination and Facilitation/PECDAR, Analysis: Matrix of Donors' Assistance to the West Bank and Gaza, Third Revision, July 1995; and idem, Attachment: Matrix of Donors' Assistance to the West Bank and Gaza, July 1995; The World Bank, Emergency Assistance to the Occupied Territories, Volumes 1-2, Washington, DC, March 1994; and The World Bank, Developing the Occupied Territories: An Investment in Peace, Volumes 1-6, Washington, DC, September 1993.
88. For more on assistance to the West Bank and Gaza, see Joachim Zaucker et al., Toward Middle East Peace and Development: International Assistance to Palestinians and The Role of NGOs during the Transition to Civil Society, Interaction Occasional Paper, Washington, DC, December 1995; The United Nations and The World Bank, Putting Peace to Work: Organizational Structure of Donor Coordination Mechanisms in the West Bank and the Gaza Strip, and a Profile of the Sector Working Groups (SWG), Gaza City, October 1995; idem, Putting Peace to Work: Strategies and Priorities for the Second Phase of the Development Effort in the West Bank and Gaza Strip, Gaza. City, September 1995; The Secretariat of the Ad Hoc Liaison Committee and The Office of Aid Coordination and Facilitation/PECDAR, Analysis: Matrix of Donors' Assistance to the West Bank and Gaza, Third Revision, July 1995; and idem, Attachment: Matrix of Donors' Assistance to the West Bank and Gaza, July 1995; The World Bank, Emergency Assistance to the Occupied Territories, Volumes 1-2, Washington, DC, March 1994; and The World Bank, Developing the Occupied Territories: An Investment in Peace, Volumes 1-6, Washington, DC, September 1993.
89. For more on assistance to the West Bank and Gaza, see Joachim Zaucker et al., Toward Middle East Peace and Development: International Assistance to Palestinians and The Role of NGOs during the Transition to Civil Society, Interaction Occasional Paper, Washington, DC, December 1995; The United Nations and The World Bank, Putting Peace to Work: Organizational Structure of Donor Coordination Mechanisms in the West Bank and the Gaza Strip, and a Profile of the Sector Working Groups (SWG), Gaza City, October 1995; idem, Putting Peace to Work: Strategies and Priorities for the Second Phase of the Development Effort in the West Bank and Gaza Strip, Gaza. City, September 1995; The Secretariat of the Ad Hoc Liaison Committee and The Office of Aid Coordination and Facilitation/PECDAR, Analysis: Matrix of Donors' Assistance to the West Bank and Gaza, Third Revision, July 1995; and idem, Attachment: Matrix of Donors' Assistance to the West Bank and Gaza, July 1995; The World Bank, Emergency Assistance to the Occupied Territories, Volumes 1-2, Washington, DC, March 1994; and The World Bank, Developing the Occupied Territories: An Investment in Peace, Volumes 1-6, Washington, DC, September 1993.
90. For more on assistance to the West Bank and Gaza, see Joachim Zaucker et al., Toward Middle East Peace and Development: International Assistance to Palestinians and The Role of NGOs during the Transition to Civil Society, Interaction Occasional Paper, Washington, DC, December 1995; The United Nations and The World Bank, Putting Peace to Work: Organizational Structure of Donor Coordination Mechanisms in the West Bank and the Gaza Strip, and a Profile of the Sector Working Groups (SWG), Gaza City, October 1995; idem, Putting Peace to Work: Strategies and Priorities for the Second Phase of the Development Effort in the West Bank and Gaza Strip, Gaza. City, September 1995; The Secretariat of the Ad Hoc Liaison Committee and The Office of Aid Coordination and Facilitation/PECDAR, Analysis: Matrix of Donors' Assistance to the West Bank and Gaza, Third Revision, July 1995; and idem, Attachment: Matrix of Donors' Assistance to the West Bank and Gaza, July 1995; The World Bank, Emergency Assistance to the Occupied Territories, Volumes 1-2, Washington, DC, March 1994; and The World Bank, Developing the Occupied Territories: An Investment in Peace, Volumes 1-6, Washington, DC, September 1993.
91. For more on assistance to the West Bank and Gaza, see Joachim Zaucker et al., Toward Middle East Peace and Development: International Assistance to Palestinians and The Role of NGOs during the Transition to Civil Society, Interaction Occasional Paper, Washington, DC, December 1995; The United Nations and The World Bank, Putting Peace to Work: Organizational Structure of Donor Coordination Mechanisms in the West Bank and the Gaza Strip, and a Profile of the Sector Working Groups (SWG), Gaza City, October 1995; idem, Putting Peace to Work: Strategies and Priorities for the Second Phase of the Development Effort in the West Bank and Gaza Strip, Gaza. City, September 1995; The Secretariat of the Ad Hoc Liaison Committee and The Office of Aid Coordination and Facilitation/PECDAR, Analysis: Matrix of Donors' Assistance to the West Bank and Gaza, Third Revision, July 1995; and idem, Attachment: Matrix of Donors' Assistance to the West Bank and Gaza, July 1995; The World Bank, Emergency Assistance to the Occupied Territories, Volumes 1-2, Washington, DC, March 1994; and The World Bank, Developing the Occupied Territories: An Investment in Peace, Volumes 1-6, Washington, DC, September 1993.
92. For more on assistance to the West Bank and Gaza, see Joachim Zaucker et al., Toward Middle East Peace and Development: International Assistance to Palestinians and The Role of NGOs during the Transition to Civil Society, Interaction Occasional Paper, Washington, DC, December 1995; The United Nations and The World Bank, Putting Peace to Work: Organizational Structure of Donor Coordination Mechanisms in the West Bank and the Gaza Strip, and a Profile of the Sector Working Groups (SWG), Gaza City, October 1995; idem, Putting Peace to Work: Strategies and Priorities for the Second Phase of the Development Effort in the West Bank and Gaza Strip, Gaza. City, September 1995; The Secretariat of the Ad Hoc Liaison Committee and The Office of Aid Coordination and Facilitation/PECDAR, Analysis: Matrix of Donors' Assistance to the West Bank and Gaza, Third Revision, July 1995; and idem, Attachment: Matrix of Donors' Assistance to the West Bank and Gaza, July 1995; The World Bank, Emergency Assistance to the Occupied Territories, Volumes 1-2, Washington, DC, March 1994; and The World Bank, Developing the Occupied Territories: An Investment in Peace, Volumes 1-6, Washington, DC, September 1993.
93. See U.S. Department of State, Cable # Tel Aviv 8955, Unclassified Document, June 1996; and idem, Cable # Tel Aviv 3859, Unclassified Document, May 1996; Palestine Center for Human Rights, Closure Update Nos. 4 & 5, Gaza, March and April 1996; and Sara Roy, "Economic Deterioration in the Gaza Strip," Middle East Report (MER), Summer 1996, pp. 36-39.
94. See U.S. Department of State, Cable # Tel Aviv 8955, Unclassified Document, June 1996; and idem, Cable # Tel Aviv 3859, Unclassified Document, May 1996; Palestine Center for Human Rights, Closure Update Nos. 4 & 5, Gaza, March and April 1996; and Sara Roy, "Economic Deterioration in the Gaza Strip," Middle East Report (MER), Summer 1996, pp. 36-39.
95. See U.S. Department of State, Cable # Tel Aviv 8955, Unclassified Document, June 1996; and idem, Cable # Tel Aviv 3859, Unclassified Document, May 1996; Palestine Center for Human Rights, Closure Update Nos. 4 & 5, Gaza, March and April 1996; and Sara Roy, "Economic Deterioration in the Gaza Strip," Middle East Report (MER), Summer 1996, pp. 36-39.
96. See U.S. Department of State, Cable # Tel Aviv 8955, Unclassified Document, June 1996; and idem, Cable # Tel Aviv 3859, Unclassified Document, May 1996; Palestine Center for Human Rights, Closure Update Nos. 4 & 5, Gaza, March and April 1996; and Sara Roy, "Economic Deterioration in the Gaza Strip," Middle East Report (MER), Summer 1996, pp. 36-39.
97. See Sara Roy, "A Critique of U.S. Development Assistance to the West Bank and Gaza," Middle East Policy Council panel on U.S. Development Assistance to the Middle East: Critical Perspectives, February 27, 1996 (proceedings in this issue).
98. For a good illustration of this point, see Tripartite Action Plan on Revenues, Expenditures and Donor Funding for the Palestinian Authority, Revised Text (late 1995?).
99. Interviews with a range of American and European officials in the donor/diplomatic community revealed that while many if not most privately oppose measures such as the closure and the status quo, they will not publicly challenge the government of Israel in any international or national forum. This position is reflected in Tripartite Action Plan, op. cit., p. 5, which states, "The parties to the Tripartite Action Plan respect the obligation of the government of Israel to provide for the safety and security of its citizens and recognize that security measures remain necessary owing to the continued threat of violent attacks.
100. Interview with Rick Hooper, chief of staff, Office of the Special Co-ordinator in the Occupied Territories, United Nations, Gaza, February 1996. According to the World Bank, donor assistance has three phases-emergency, short-term and long-term.
101. Despite this, donors currently claim to be shifting their programmatic focus to the longer term.
102. See citations in note 57 which underscore this point.
103. Interview, U.S. State Department, Washington, DC, December 1995.
104. Interview, USAID, Tel Aviv, February 1996.
105. U.S. GPO, Foreign Assistance Legislation For Fiscal Year 1994 (Part 2), op. cit., p. 269.
106. USAID, USAID Program Strategy for The West Bank and Gaza Strip 1993-1997, Near East Bureau, Washington, DC, November 1992, p. 1.
107. Ibid, p. 6. Also see, U.S. GPO, Foreign Assistance Legislation For Fiscal Year 1994 (Part 2), op. cit., pp. 267-275.
108. Ibid, p. 6. Also see, U.S. GPO, Foreign Assistance Legislation For Fiscal Year 1994 (Part 2), op. cit., pp. 267-275.
109. Ibid., p. 12.
110. See USAID, USAID Strategy Papers, Draft, October 5, 1993, for USAID's stated position on sustainable development, economic growth, environmental protection, health and democracy. It provides an interesting point of contrast with USAID activities in the West Bank and Gaza.
111. USATD, West Bank and Gaza, Internal Document(?), February 22, 1995.
112. Ibid.
113. Ibid.
114. Ibid.; USAID, Program Overview, West Bank and Gaza Mission, American Embassy, Tel Aviv, 1994; USAID, Draft USAID Strategy for the West Bank and Gaza FY 1994-98, Washington, DC, May 19 1994; and AID Affairs Office for Gaza, West Bank/Gaza Strategy 1994-98, May 1994.
115. Ibid.; USAID, Program Overview, West Bank and Gaza Mission, American Embassy, Tel Aviv, 1994; USAID, Draft USAID Strategy for the West Bank and Gaza FY 1994-98, Washington, DC, May 19 1994; and AID Affairs Office for Gaza, West Bank/Gaza Strategy 1994-98, May 1994.
116. Ibid.; USAID, Program Overview, West Bank and Gaza Mission, American Embassy, Tel Aviv, 1994; USAID, Draft USAID Strategy for the West Bank and Gaza FY 1994-98, Washington, DC, May 19 1994; and AID Affairs Office for Gaza, West Bank/Gaza Strategy 1994-98, May 1994.
117. Ibid.; USAID, Program Overview, West Bank and Gaza Mission, American Embassy, Tel Aviv, 1994; USAID, Draft USAID Strategy for the West Bank and Gaza FY 1994-98, Washington, DC, May 19 1994; and AID Affairs Office for Gaza, West Bank/Gaza Strategy 1994-98, May 1994.
118. Ibid., Draft USAID Strategy, pp. 56-57.
119. Given the scope of this study, it is not possible to provide an analysis of USAID projects and their impact. The construction of lower-income housing known as the Al Karama Towers wound up being too costly for those to whom it was targeted It remains unopened, and there are squatters in the building. The shelter rehabilitation program, however, has been successful.
120. However, there was at least one instance when USAID made a direct contribution of $5 million to cover the operating costs of the Palestinian police. See AID, "Summary of Main Points Raised at the West Bank/Gaza Strategy Review, May 10, 1994, 12:30 to 4:30 P.M.," USAID mission, Internal Document, May 17, 1994, Tel Aviv. The document also stated, "At the same time, the [AID] administrator has advised West Bank staff to 'lock up the money; as quickly as possible, so that funds are not available for poaching."
121. Funding for police salaries is often disbursed through UNRWA.
122. U.S. Department of State, Report Pursuant to Title VIII of Public Law 101-246, Foreign Relations Authorization Act, op. cit., Annex: USAID/West Bank and Gaza Assistance Which Directly or Indirectly Benefits the PLO, PA, or PA Programs (9/13/1993-9/30/1993), NEA/IAI.
123. Interview with high-ranking State Department official who asked not to be identified, Israel, January 1995. Also see, John M. Goshko, "Supporters of Arafat in U.S. Say Financial Aid Is Too Slow, Limited," The Washington Post, December 27, 1994.
124. "USAID cuts demolish Palestinian health project," The Lancet, volume 346, August 12, 1995, p. 433.
125. Ibid.
126. See U.S. GPO, Foreign Assistance Legislation For Fiscal Year 1994 (Part 2), op. cit., p. 26 and p. 210. Interviews with officials of Save the Children in Gaza and the West Bank revealed, for example, the difficulty of securing USAID funds for early-childhood education, environmental-health education, mental health and training programs of any kind.
127. Interview with Christopher Crowley, director, USAID Mission, Tel Aviv, January 1996. Also see USAID, U.S. Assistance To The Palestinians: Background, Unclassified Document, December 1995. For example, USAID's contribution to ANERA's total budget declined from 80 percent to 33 percent from 1994 to 1996. Interview with Peter Gubser, president, ANERA, Washington, DC, December 1995.
128. This project was announced by Vice President Gore during his visit to Jericho on March 24, 1995. It is designed to remove sewage from the streets and reduce street flooding, clean and refurbish storm drains and sewers, repair or replace sewage pumping stations, clean and repair the heavily polluted Gaza City flood control basin, and provide sewage connections to Gaza City residents not hooked into the system. See USAID, Gaza City Stormwater/Wastewater System Rehabilitation: USAID West Bank/Gaza Mission Proposed Project Design; and USIS, Visit of The Vice President of The United Sates to Israel, Jericho, Press Release, Jerusalem, March 24, 1995.
129. This project was announced by Vice President Gore during his visit to Jericho on March 24, 1995. It is designed to remove sewage from the streets and reduce street flooding, clean and refurbish storm drains and sewers, repair or replace sewage pumping stations, clean and repair the heavily polluted Gaza City flood control basin, and provide sewage connections to Gaza City residents not hooked into the system. See USAID, Gaza City Stormwater/Wastewater System Rehabilitation: USAID West Bank/Gaza Mission Proposed Project Design; and USIS, Visit of The Vice President of The United Sates to Israel, Jericho, Press Release, Jerusalem, March 24, 1995.
130. See USAID, USAID's Small Business Support Project, List of Client Services, no date given.
131. USAID's summary budget for FY 1995 was $32.0 million for PA Start-up Activities, $25.3 million for High Priority Infrastructure, $17.7 million for Emergency Employment Programs, $7.2 million for Economic Reactivation or small-business development, and $3.2 million for other activities. The $85.4 million total includes some reprogrammed FY 1994 funds. See USAID, Program Overview, September 1995. Also see, Palestinian Ministry of Planning, USAID/West Bank and Gaza Program Budget 1995, Gaza City, March 17, 1994.
132. USAID's summary budget for FY 1995 was $32.0 million for PA Start-up Activities, $25.3 million for High Priority Infrastructure, $17.7 million for Emergency Employment Programs, $7.2 million for Economic Reactivation or small-business development, and $3.2 million for other activities. The $85.4 million total includes some reprogrammed FY 1994 funds. See USAID, Program Overview, September 1995. Also see, Palestinian Ministry of Planning, USAID/West Bank and Gaza Program Budget 1995, Gaza City, March 17, 1994.
133. The impact of reducing funds to PVOs is perhaps best illustrated by the Society for the Care of the Handicapped (SCH) in Gaza, a longtime recipient of USAID funds and the only Palestinian NGO to receive any. As a result of USAID budget cuts, the SCH had to fire over 200 employees and terminate services to over 4,000 children. See Conference Proceedings in this issue of Middle East Policy. There are 850-1,500 Palestinian NGOs and over 200 active international PVOs working in the West Bank and Gaza that are coming under increasing pressure from the PA and the donor community. See Brynen, op. cit., p. 85; and Denis J. Sullivan, "NGOs in Palestine: Agents of Development and Foundation of Civil Society," Journal of Palestine Studies XXV, no. 3 (Spring 1995): 93-100.
134. The impact of reducing funds to PVOs is perhaps best illustrated by the Society for the Care of the Handicapped (SCH) in Gaza, a longtime recipient of USAID funds and the only Palestinian NGO to receive any. As a result of USAID budget cuts, the SCH had to fire over 200 employees and terminate services to over 4,000 children. See Conference Proceedings in this issue of Middle East Policy. There are 850-1,500 Palestinian NGOs and over 200 active international
135. The impact of reducing funds to PVOs is perhaps best illustrated by the Society for the Care of the Handicapped (SCH) in Gaza, a longtime recipient of USAID funds and the only Palestinian NGO to receive any. As a result of USAID budget cuts, the SCH had to fire over 200 employees and terminate services to over 4,000 children. See Conference Proceedings in this issue of Middle East Policy. There are 850-1,500 Palestinian NGOs and over 200 active international PVOs working in the West Bank and Gaza that are coming under increasing pressure from the PA and the donor community. See Brynen, op. cit., p. 85; and Denis J. Sullivan, "NGOs in Palestine: Agents of Development and Foundation of Civil Society," Journal of Palestine Studies XXV, no. 3 (Spring 1995): 93-100.
136. By 1995, the only formal USAID project supporting local/private institutional development in the West Bank and Gaza was one belonging to Save the Children Federation (SCF). However, the original budget for the institutional development project of $6 million over three years is now $2 million. SCF officials in Gaza and the West Bank further indicated that USAID rejected projects once funded for women's centers, kindergartens and parks. USAID also wanted to cancel the community-participation feature of SCF projects in which the recipient community contributes approximately 30 percent of the project cost. SCF refused to go below 25 percent. Interviews with SCF officials, Gaza Strip and West Bank, January-February 1996. Also see Ministry of Planning, USAID's Program Budget 1995, op. cit.; and Save the Children, Institutional Development Project-Operations Manual, West Bank and Gaza, July 1995.
137. By 1995, the only formal USAID project supporting local/private institutional development in the West Bank and Gaza was one belonging to Save the Children Federation (SCF). However, the original budget for the institutional development project of $6 million over three years is now $2 million. SCF officials in Gaza and the West Bank further indicated that USAID rejected projects once funded for women's centers, kindergartens and parks. USAID also wanted to cancel the community-participation feature of SCF projects in which the recipient community contributes approximately 30 percent of the project cost. SCF refused to go below 25 percent. Interviews with SCF officials, Gaza Strip and West Bank, January-February 1996. Also see Ministry of Planning, USAID's Program Budget 1995, op. cit.; and Save the Children, Institutional Development Project-Operations Manual, West Bank and Gaza, July 1995.
138. U.S. State Department, Secretary of State Warren Christopher s Opening Statement to The Conference on Aid to the Palestinians, January 9, 1996.
139. USAID, USAID/West Bank and Gaza Strategy Development Process, Internal Draft, January 1996.
140. Ibid. The figures derive from USAID, Program Overview, January 1996, and also include an additional category, "other."
141. USAID, Internal Draft, January 1996, op. cit.
142. Other program initiatives relate to elections and electoral administration, civil society and public decision-making processes and the strengthening of legislative processes. Several USAID officials maintain that there is highly limited absorptive capacity locally for projects in the democracy sector.
143. In the January 1996 Conference on Assistance to the Palestinian People, the donor community signed a revised Tripartite Action Plan in which they agreed to finance a recurrent budget deficit of $75 million in 1996 with the expectation that the PA would balance its budget by 1997, when donor financing would end. However, the tightened closure of the West Bank and Gaza imposed by Israel after the series of suicide bombings in February and March 1996 is expected to increase the PA's budget deficit to $182 million in 1996 according to the IMF.
144. In January 1996, one part of this larger project was announced: upgrading the water facilities within Hebron. See USIS, United States Aid Project To Improve Water Facilities in Hebron Begins Implementation Phase, Press Release, U.S. Consulate, Jerusalem, January 12, 1996.
145. USAID, Program Strategy, November 1992, op. cit., p. 2.
146. Ibid., p. 19. The document states: "The activities which cause AID the greatest management burdens, and therefore are unlikely to be funded...are...: Large infrastructure, especially dealing with complex technologies or high maintenance requirements, such as wastewater treatment...[and] [c]onstruction. Construction projects will only be allowed if they include realistic provision for maintenance of completed facilities." Also see, AID, Letter to Peter Gubser, president, ANERA, January 8, 1993, p. 3: "AID cannot finance capital expansion when insufficient funds are available to operate and maintain new facilities effectively. Typically, this can only be assured when the capital projects are small-scale in nature, so that community users are willing and able to take responsibility for financing ongoing operation."
147. Ibid., p. 19. The document states: "The activities which cause AID the greatest management burdens, and therefore are unlikely to be funded...are...: Large infrastructure, especially dealing with complex technologies or high maintenance requirements, such as wastewater treatment...[and] [c]onstruction. Construction projects will only be allowed if they include realistic provision for maintenance of completed facilities." Also see, AID, Letter to Peter Gubser, president, ANERA, January 8, 1993, p. 3: "AID cannot finance capital expansion when insufficient funds are available to operate and maintain new facilities effectively. Typically, this can only be assured when the capital projects are small-scale in nature, so that community users are willing and able to take responsibility for financing ongoing operation."
148. Given acute economic conditions in Gaza and to a lesser degree, the West Bank, some of the most successful (as measured by popular support) USAID projects include: shelter and school rehabilitation and construction, after-school recreation programs, and small-scale lending (all through UNRWA).
149. By contrast, see "Protecting the Environment: USAID's Strategy," USAID Strategy Papers, October 5, 1993, op. cit., pp. 19-27.
150. Interview with a PVO official, Gaza City, February 1996.
151. For an example of USAID-supported projects in agriculture, see ANERA, Quarterly Report for USAID Funded Activities for the Period October-December 1995, Jerusalem, January 1996. These projects are typically small-scale, circumscribed and support tne establishment of a veterinary laboratory, mobile veterinary clinics for live-stock cooperatives, a sheep farm for milk production, programs in brucellosis control, a pestmanagement program with Hebron University, a seedless-grape production program in a cooperative. In addition, ANERA implemented a variety of water-conservation activities with local cooperatives. None of these involve land reclamation. Furthermore, USAID funding is expected to end in the next fiscal year. Interview with Tom Neu, ANERA program director, Jerusalem, May 1996.
152. USAID, Gaza City Stormwater/Wastewater System Rehabilitation, op. cit.
153. Foreign Investment Advisory Service, op. cit., p. 40. Also see, The World Bank, Overview and Strategy for Private Sector Development for West Bank and Gaza, Washington, DC, July 1995.
154. Foreign Investment Advisory Service, op. cit., p. 40. Also see, The World Bank, Overview and Strategy for Private Sector Development for West Bank and Gaza, Washington, DC, July 1995.
155. In order for USAID to support industrial estates, an executive waiver was required because of a legislative ban on USAID projects that compete with U.S. manufacturers.
156. Interview with senior State Department official, Washington, DC, December 1995.
157. Foreign Investment Advisory Service, op. cit., p. 41.
158. Ibid and p. 43.
159. IbId., pp. 47-48.
160. However, the PA has proposed a series of local and municipal industrial estates located in the interior of the West Bank and Gaza Strip. See the World Bank, "Municipal Industrial Complexes and Support for Small-Scale Industries," in Palestinian Investment Program 1995-1998-Project Proposals, Washington, DC, September 1995. Also see The World Bank, Industrial Estates and Enabling Environment for Private Sector Development for West Bank and Gaza, Washington, DC, June 1995.
161. However, the PA has proposed a series of local and municipal industrial estates located in the interior of the West Bank and Gaza Strip. See the World Bank, "Municipal Industrial Complexes and Support for Small-Scale Industries," in Palestinian Investment Program 1995-1998-Project Proposals, Washington, DC, September 1995. Also see The World Bank, Industrial Estates and Enabling Environment for Private Sector Development for West Bank and Gaza, Washington, DC, June 1995.
162. Interview with senior USAID official who asked not to be identified. Interviews with certain officials in the State Department confirmed this point. Furthermore, ANERA, which has a long history of working with Palestinian municipalities, reports increasing difficulty in securing USAID funds for municipal projects. Interview with Peter Gubser, president, ANERA, May 1996.
163. However, informal contacts do occur between USAID and certain Palestinian ministries, and USAID attempts to keep the relevant ministries informed. Certain projects of particular import such as industrial estates do involve coordination, but it tends to occur on a personal rather than a professional level. The deputy director of the Palestinian Ministry of Planning complained that USAID is the only donor government agency that does not deal directly with his ministry. Interview, Gaza Strip, February 1996. No doubt, a further disincentive for USAID is the internal disorganization, mismanagement and inefficiency that characterizes the PA bureaucracy.
164. Interview with USAID official, Tel Aviv, January 1996.
165. Interview with State Department official, Jerusalem, November 1993.
166. Interview with senior State Department official, Washington, DC, December 1995.
167. U.S. GPO, Foreign Assistance Legislation For Fiscal Year 1994 (Part 2), op. cit., pp. 82 and 93.
168. See Human Rights Watch/Middle East, op. cit.; Roy, MERIP, op. cit; and "Gaza: Meet you at the sauna," The Economist, June 17, 1995, p. 38.
169. See Human Rights Watch/Middle East, op. cit.; Roy, MERIP, op. cit; and "Gaza: Meet you at the sauna," The Economist, June 17, 1995, p. 38.
170. See Human Rights Watch/Middle East, op. cit.; Roy, MERIP, op. cit; and "Gaza: Meet you at the sauna," The Economist, June 17, 1995, p. 38.
171. A key factor in economic informalization is the loss of jobs in Israel and the lack of jobs in the occupied territories and the transfer of the Palestinian labor force from jobs requiring certain skills to those requiring different skills. Hence, there is not only a surplus of labor in the West Bank and Gaza, there is a surplus of inappropriately trained labor - people who once worked in Israel and gained skills inappropriate to local need. In the absence of training programs, which donors do not want to fund, these laborers are increasingly forced into the informal sector, where they engage in street vending, street cleaning and barter trade. See Imad Abu-Dayah, Micro-Enterprise Credit Program, Income Generation Department, UNRWA, Gaza Field Office, December 1995.
172. In a closed meeting on business development in the Middle East jointly sponsored by the Harvard Business School and Kennedy School of Government in April 1994, a vice president of Lehman Brothers outlined some key conditions for attracting private investment: access to international capital markets, the ability to compete for capital, governmental capacity to control inflation, a rule of law upholding the validity of contracts, an acceptance of international accounting standards, a willingness to let the market dictate prices, and a receptivity to outsiders' ideas and participation. Virtually none of these conditions obtains in the West Bank and Gaza because of Israeli and PA policies.
173. Interview with Rick Hooper, chief of staff, Office of the Co-ordinator in the Occupied Territories, United Nations, Gaza City, May 1996.
174. The World Bank, Claiming the Future: Choosing Prosperity in the Middle East and North Africa (Washington, DC: The World Bank, 1995), p. 1.