International aid to Palestinians
Encyclopedia
International aid has played a major role in the Israeli–Palestinian conflict
as it has been used as a means to keep the peace process going. Palestinians in the West Bank
and Gaza Strip
receive one of the highest levels of aid in the world. Aid has been offered to the Palestinian National Authority
(PNA) and other Palestinian Non-governmental organization
s (PNGOs) by the international community
, including International Non-governmental Organizations
(INGOs).
The entities that provide aid to the Palestinians are categorized into seven groups: the Arab nations, the European Union
, the United States
, Japan
, international institutions (including agencies of the UN system
), European countries, and other nations.
, two entities were the major sources of international aid for the Israeli-occupied territories
of West Bank and Gaza: the donors of the West
and the Arab states. Most of these programs started or developed during the 1970s, and they were further expanded during the 1980s. Because of the lack of a Palestinian state entity-partner, the majority of the sums were channeled through PNGOs or INGOs. Although the stance of the donors during the pre-Oslo period is regarded by some analysts, such as Rex Brynen, as controversial and linked with phenomena, such as corruption, nationalism and factional rivalries, international aid effectively financed a series of programs in the sectors of agriculture, infrastructure, housing and education.
The Oslo accords, officially signed on September 13, 1993, on the White House
lawn, contained substantial provisions on economic matters and international aid: Annex IV of the Declaration of Principles (DoP) discusses regional cooperation and implicitly calls for major international aid efforts to help the Palestinians, Jordan, Israel and the entire region.
On October 1, 1993, the international donor community (nations and institutions) met in Washington to mobilize support for the peace process, and pledged to provide approximately $2.4 billion to the Palestinians over the course of the next five years. The international community's action was
based on the premise that it was imperative to garner all financial resources needed to make the agreement successful, and with a full understanding that in order for the Accords to stand in the face of daily challenges on the ground, ordinary Palestinians needed to perceive positive change in their lives. Therefore, the donors had two major goals: to fuel Palestinian economic growth and to build public
support for negotiations with Israel. According to Scott Lasensky, "throughout the follow-up talks to the
DoP that produced the Gaza-Jericho Agreement (May 1994), the Early Empowerment Agreement (August 1994), the Interim Agreement
(September 1995), and the Hebron Accord
(January 1997), [...]
economic aid hovered over the process and remained the single most critical external component buttressing the PNA."
, James Wolfensohn
, who stated: "The sense of urgency is clear. Peace will only be assured in that area if you can get jobs for those people."
After 1997, there was a reduction in the use of closure policy by Israel, which led to an employment growth and an expansion of the West Bank and Gaza economy. After the signing of the Wye River Memorandum
, a new donors' conference was convened, and over $2 billion was pledged to the PNA for 1999–2003. Nevertheless, overall donor disbursements fell in 1998–2000, and the 1998 disbursements=to-commitments ratio was the lowest since 1994. As for international institutions, they began to play a bigger role in the international funding process, in spite of the decline in the absolute value of these institutions' total commitments. After 1997, the need for donor support for the current budget and employment generation programs receded due to the PA's improved fiscal performance, and attention was focused instead on infrastructures to the detriment of institution building. Donors' activity was also characterized by a decline in support for PNGOs, and by a preference to concessionary loans (instead of grants) with generous grace periods, long repayment periods and low interest rates
experienced in modern history. In those two years, Palestinian real
GDP per capita shrunk by almost 40 percent. The precipitator of this economic crisis was again a multi-faceted system of restrictions on the movement of goods and people designed to protect Israelis in Israel itself and in the settlements.
One of the many frustrations of the crisis was the erosion of the development effort financed by the international community, since the overwhelming emphasis in donor work was now directed towards mitigating the impact of the economic and social crisis. A collapse of the PNA was averted by emergency budget support from donor countries. Despite a significant increase in donor commitments in 2002 compared with 2001, commitments to infrastructure and capacity-building work with a medium-term focus continued to decline. In 2000, the ratio was approximately 7:1 in
favor of development assistance. By 2002, the ratio had shifted to almost 5:1 in favor of
emergency assistance.
Yasser Arafat
's death in 2004 and Israel's unilateral disengagement
from Gaza created new hopes to the donor community. In March 2005, the Quartet on the Middle East
underscored the importance of development assistance, and urged the international donors community to support Palestinian institution building, without however ignoring budgetary support. The Quartet also urged Israel and the PNA to fulfill their commitments arising from the Road map for peace
, and the international community "to review and energize current donor coordination structures [...] in order to increase their effectiveness." The international community's attempt in late 2005 to promote Palestinian economic recovery reflected a long-standing assumption that economic development is crucial to the peace process and to prevent backsliding into conflict. Although a mild positive growth returned in 2003 and 2005, this fragile recovery stalled as a result of the segmentation of the Gaza Strip, the stiff restrictions on movements of goods and people across the borders with Israel and Egypt, and the completion of the Israeli West Bank barrier
. As the World Bank
stressed in December 2005, "growth will not persist without good Palestinian governance, sound economic management and a continued relaxation of closure by GOI."
won the Palestinian legislative elections
; the Islamist organization assumed power in March 29, 2006, without accepting the terms and conditions set by the Quartet. Hamas' stance resulted in a near cessation of direct relations between most bilateral donors and the PNA, with only some multilateral agencies and a few donors continuing direct contact and project administration. Quartet's decision met the criticism of the Quartet's former envoy, James Wolfensohn, who characterized it "a misguided attempt to starve the Hamas-led Palestinians into submission," and of UN's Middle East former envoy, Alvaro de Soto. Because of the worsening human crisis, the EU proposed a plan to channel aid directly to the Palestinians, bypassing the Hamas-led PNA; the Quartet approved the proposal, despite the initial US reaction, and the EU set up a "temporary international mechanism" (TIM) to channel the money for an initial three-month period, which was later extended. Oxfam
was one of the main critics of the EU TIM program arguing that "limited direct payments from the European Commission have failed to address this growing crisis."
The emergence of two rival governments in the West Bank and Gaza in June 2006 presented the international community with the prospect of shouldering a huge aid burden. The World Bank estimated that in 2008 PNA would need $1.2 billion in recurrent budget support, in addition to $300 million in development aid. The formation of the caretaker government in mid-2007 under Fayyad, and the resumption of aid have partially reversed the impacts of the aid boycott. Nevertheless, economic indicators have not changed considerably. For instance, because of the situation in Gaza, real GDP growth was estimated to be about -0,5% in 2007, and 0,8% in 2008.
, the international community pledged over $7.7 billion for 2008–2010 in support of the Palestinian Reform and Development Program (PRDP). Hamas, which was not invited to Paris, called the conference a "declaration of war" on it. In the beginning of 2008, The EU moved from the TIM mechanism to PEGASE, which provides channels for direct support to the PNA's Central Treasury Account in addition to the types of channels used for TIM. The World Bank also launched a trust fund that would provide support in the context of the PNA's 2008–2010 reform policy agenda. However, neither mechanism contains sufficient resources to cover the PNA's entire monthly needs, thus not allowing the PNA to plan expenditures beyond a two-month horizon.
The World Bank assesses that the PNA has made significant progress on implementing the reform agenda laid out in the PRDP, and re-establishing law and order; Gaza, however, remains outside of the reforms as Hamas controls security and the most important ministry positions there. Palestinian inter-factional tension continues in the West Bank and Gaza, with arrests of people and closures of NGOs by each side, resulting in a deterioration in the ability of civil society organizations to continue cater to vulnerable groups. Following the 2008–2009 Israel–Gaza conflict, an international conference took place in Sharm El-Sheikh
, Egypt
, where donors pledged almost $4.5 billion for the resonstruction of Gaza. These funds bypass Hamas, since the PNA, in collaboration with the donor community, has taken the leadership in delivering and distributing the assistance.India which is aspiring to be recognized as 'Globally respected power' has made concerted efforts in fostering better relations with PA. When PAP President Abbas visited New Delhi in 2008 he was offered a credit of US$ 20 million (Rs.900 million) by Indian Federal Government. India also continued to offer eight scholarships under ICCR Schemes to Palestinian students for higher studies in India, while also offering several slots for training courses under the ITEC Program.
and the United States
. According to estimates made by the World Bank
The Palestinian Authority received $525 million of international aid in the first half of 2010, $1.4 billion in 2009 and $1.8 billion in 2008. Foreign aid is the "main driver" of economic growth in the Palestinian territories. According to the International Monetary Fund
, the unemployment rate has fallen as the economy of Gaza grew by 16% in the first half of 2010, almost twice as fast as the economy of the West Bank
.
In July 2010, Germany
has outlawed a major Turkish-German donor group, the Internationale Humanitaere Hilfsorganisation (IHH), unaffiliated to the Turkish: İnsani Yardım Vakfı (İHH) that sent the Mavi Mamara aid vessel, saying it has used donations to support projects in Gaza that are related to Hamas, which is considered by the European Union to be a terrorist organization, while presenting their activities to donors as humanitarian help. German Interior Minister Thomas de Maiziere
said, "Donations to so-called social welfare groups belonging to Hamas, such as the millions given by IHH, actually support the terror organization Hamas as a whole."
responded by stating that the PA was willing to give up financial aid in order to achieve unity, "Palestinians need American money, but if they use it as a way of pressuring us, we are ready to relinquish that aid."
According to the Development Assistance Committee
, the main multilateral donors for the 2006–2007 period were UNRWA and the EU (through the European Commission
); the main bilateral donors were the US, Japan, Canada
and five European countries (Norway
, Germany
, Sweden
, Spain
and France
). Since 1993 the European Commission and the EU member-states combined have been by far the largest aid contributor to the Palestinians. The Arab League states have also been substantial donors, notably through budgetary support to the PNA during the Second Intifada; they have been however criticized for not sufficiently financing the UNRWA and the PNA, and for balking at their pledges. After the 2006 Palestinian elections, the Arab countries tried to contribute to the payment of the Palestinian public servants' wages, bypassing the PNA; at the same time Arab funds were paid directly to Abbas' office for disbursement. During the Paris Conference, 11% of the pledges came from the US and Canada, 53% from Europe and 20% from the Arab countries.
Israeli–Palestinian conflict
The Israeli–Palestinian conflict is the ongoing conflict between Israelis and Palestinians. The conflict is wide-ranging, and the term is also used in reference to the earlier phases of the same conflict, between Jewish and Zionist yishuv and the Arab population living in Palestine under Ottoman or...
as it has been used as a means to keep the peace process going. Palestinians in the West Bank
West Bank
The West Bank ) of the Jordan River is the landlocked geographical eastern part of the Palestinian territories located in Western Asia. To the west, north, and south, the West Bank shares borders with the state of Israel. To the east, across the Jordan River, lies the Hashemite Kingdom of Jordan...
and Gaza Strip
Gaza Strip
thumb|Gaza city skylineThe Gaza Strip lies on the Eastern coast of the Mediterranean Sea. The Strip borders Egypt on the southwest and Israel on the south, east and north. It is about long, and between 6 and 12 kilometres wide, with a total area of...
receive one of the highest levels of aid in the world. Aid has been offered to the Palestinian National Authority
Palestinian National Authority
The Palestinian Authority is the administrative organization established to govern parts of the West Bank and Gaza Strip...
(PNA) and other Palestinian Non-governmental organization
Non-governmental organization
A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...
s (PNGOs) by the international community
International community
The international community is a term used in international relations to refer to all peoples, cultures and governments of the world or to a group of them. The term is used to imply the existence of common duties and obligations between them...
, including International Non-governmental Organizations
International nongovernmental organization
The World Bank defines a non-governmental organization as "private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development"...
(INGOs).
The entities that provide aid to the Palestinians are categorized into seven groups: the Arab nations, the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, international institutions (including agencies of the UN system
United Nations System
The United Nations system consists of the United Nations, its subsidiary organs , the specialized agencies, and affiliated organizations...
), European countries, and other nations.
Before Oslo
Before the signing of the Oslo accordsOslo Accords
The Oslo Accords, officially called the Declaration of Principles on Interim Self-Government Arrangements or Declaration of Principles , was an attempt to resolve the ongoing Palestinian-Israeli conflict...
, two entities were the major sources of international aid for the Israeli-occupied territories
Israeli-occupied territories
The Israeli-occupied territories are the territories which have been designated as occupied territory by the United Nations and other international organizations, governments and others to refer to the territory seized by Israel during the Six-Day War of 1967 from Egypt, Jordan, and Syria...
of West Bank and Gaza: the donors of the West
Western world
The Western world, also known as the West and the Occident , is a term referring to the countries of Western Europe , the countries of the Americas, as well all countries of Northern and Central Europe, Australia and New Zealand...
and the Arab states. Most of these programs started or developed during the 1970s, and they were further expanded during the 1980s. Because of the lack of a Palestinian state entity-partner, the majority of the sums were channeled through PNGOs or INGOs. Although the stance of the donors during the pre-Oslo period is regarded by some analysts, such as Rex Brynen, as controversial and linked with phenomena, such as corruption, nationalism and factional rivalries, international aid effectively financed a series of programs in the sectors of agriculture, infrastructure, housing and education.
Oslo
White House
The White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...
lawn, contained substantial provisions on economic matters and international aid: Annex IV of the Declaration of Principles (DoP) discusses regional cooperation and implicitly calls for major international aid efforts to help the Palestinians, Jordan, Israel and the entire region.
On October 1, 1993, the international donor community (nations and institutions) met in Washington to mobilize support for the peace process, and pledged to provide approximately $2.4 billion to the Palestinians over the course of the next five years. The international community's action was
based on the premise that it was imperative to garner all financial resources needed to make the agreement successful, and with a full understanding that in order for the Accords to stand in the face of daily challenges on the ground, ordinary Palestinians needed to perceive positive change in their lives. Therefore, the donors had two major goals: to fuel Palestinian economic growth and to build public
support for negotiations with Israel. According to Scott Lasensky, "throughout the follow-up talks to the
DoP that produced the Gaza-Jericho Agreement (May 1994), the Early Empowerment Agreement (August 1994), the Interim Agreement
Interim Agreement on the West Bank and the Gaza Strip
The Interim Agreement on the West Bank and the Gaza Strip, also known as the Israeli-Palestinian Interim Agreement, the Interim Agreement, Oslo 2, Oslo II, and Taba, was a key and complex agreement governing several aspects of the Palestinian territories of Gaza Strip and the West Bank.-History:It...
(September 1995), and the Hebron Accord
Protocol Concerning the Redeployment in Hebron
Protocol Concerning the Redeployment in Hebron, also known as The Hebron Protocol or Hebron Agreement, began January 7 and was concluded from January 15 to January 17, 1997 between Israel, represented by Prime Minister of Israel Benjamin Netanyahu, and the Palestine Liberation Organization ,...
(January 1997), [...]
economic aid hovered over the process and remained the single most critical external component buttressing the PNA."
1993–2000
Between 1993 and 1997 the PNA faced serious economic and financial problems. International aid prevented the collapse of the local economy, and contributed to the establishment of the Palestinian administration. Donors' pledges continued to increase regularly (their value had risen to approximately $3,420 million as of the end of October 1997) as a result of the faltering peace process, along with the increase in needs and the consequent increase in the assistance necessary for Palestinians to survive. Reality led, however, to a revision of the donors' priorities: Out of concern that the deteriorating economic conditions could result in a derailment of the peace process, donor support was redirected to finance continued budgetary shortfalls, housing programs and emergency employment creation. According to a more critical approach, international aid in the mid 1990s supported PNA's bureaucracy and belatedly promoted the centralization of political power, but in a way that did not enhance government capacity and harmed the PNGOs. In 1994–1995 problems of underfunding, inefficiency and poor aid coordination marked donors' activity, and led to tensions among the different aid bodies, and between the international community and the PNA. In 1996, the link between development assistance and the success of the peace process was made explicit by the President of the World BankWorld Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, James Wolfensohn
James Wolfensohn
Sir James David Wolfensohn AO KBE FKC was the ninth president of the World Bank Group.-Early life:James Wolfensohn was born in Sydney, Australia, on 1 December 1933...
, who stated: "The sense of urgency is clear. Peace will only be assured in that area if you can get jobs for those people."
After 1997, there was a reduction in the use of closure policy by Israel, which led to an employment growth and an expansion of the West Bank and Gaza economy. After the signing of the Wye River Memorandum
Wye River Memorandum
The Wye River Memorandum was an agreement negotiated between Israel and the Palestine Authority to implement the earlier Interim Agreement of 28 September, 1995...
, a new donors' conference was convened, and over $2 billion was pledged to the PNA for 1999–2003. Nevertheless, overall donor disbursements fell in 1998–2000, and the 1998 disbursements=to-commitments ratio was the lowest since 1994. As for international institutions, they began to play a bigger role in the international funding process, in spite of the decline in the absolute value of these institutions' total commitments. After 1997, the need for donor support for the current budget and employment generation programs receded due to the PA's improved fiscal performance, and attention was focused instead on infrastructures to the detriment of institution building. Donors' activity was also characterized by a decline in support for PNGOs, and by a preference to concessionary loans (instead of grants) with generous grace periods, long repayment periods and low interest rates
2000–2006
The second Intifada led to one of the deepest recessions the Palestinian economyexperienced in modern history. In those two years, Palestinian real
GDP per capita shrunk by almost 40 percent. The precipitator of this economic crisis was again a multi-faceted system of restrictions on the movement of goods and people designed to protect Israelis in Israel itself and in the settlements.
One of the many frustrations of the crisis was the erosion of the development effort financed by the international community, since the overwhelming emphasis in donor work was now directed towards mitigating the impact of the economic and social crisis. A collapse of the PNA was averted by emergency budget support from donor countries. Despite a significant increase in donor commitments in 2002 compared with 2001, commitments to infrastructure and capacity-building work with a medium-term focus continued to decline. In 2000, the ratio was approximately 7:1 in
favor of development assistance. By 2002, the ratio had shifted to almost 5:1 in favor of
emergency assistance.
Yasser Arafat
Mohammed Yasser Abdel Rahman Abdel Raouf Arafat al-Qudwa al-Husseini , popularly known as Yasser Arafat or by his kunya Abu Ammar , was a Palestinian leader and a Laureate of the Nobel Prize. He was Chairman of the Palestine Liberation Organization , President of the Palestinian National Authority...
's death in 2004 and Israel's unilateral disengagement
Israel's unilateral disengagement plan
Israel's unilateral disengagement plan , also known as the "Disengagement plan", "Gaza expulsion plan", and "Hitnatkut", was a proposal by Israeli Prime Minister Ariel Sharon, adopted by the government on June 6, 2004 and enacted in August 2005, to evict all Israelis from the Gaza Strip and from...
from Gaza created new hopes to the donor community. In March 2005, the Quartet on the Middle East
Quartet on the Middle East
The Quartet on the Middle East, sometimes called the Diplomatic Quartet or Madrid Quartet or simply the Quartet, is a foursome of nations and international and supranational entities involved in mediating the peace process in the Israeli-Palestinian conflict. The Quartet are the United Nations, the...
underscored the importance of development assistance, and urged the international donors community to support Palestinian institution building, without however ignoring budgetary support. The Quartet also urged Israel and the PNA to fulfill their commitments arising from the Road map for peace
Road map for peace
The roadmap for peace or "road map" for peace is a plan to resolve the Israeli-Palestinian conflict proposed by a "quartet" of international entities: the United States, the European Union, Russia, and the United Nations. The principles of the plan, originally drafted by U.S. Foreign Service...
, and the international community "to review and energize current donor coordination structures [...] in order to increase their effectiveness." The international community's attempt in late 2005 to promote Palestinian economic recovery reflected a long-standing assumption that economic development is crucial to the peace process and to prevent backsliding into conflict. Although a mild positive growth returned in 2003 and 2005, this fragile recovery stalled as a result of the segmentation of the Gaza Strip, the stiff restrictions on movements of goods and people across the borders with Israel and Egypt, and the completion of the Israeli West Bank barrier
Israeli West Bank barrier
The Israeli West Bank barrier is a separation barrier being constructed by the State of Israel along and within the West Bank. Upon completion, the barrier’s total length will be approximately...
. As the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
stressed in December 2005, "growth will not persist without good Palestinian governance, sound economic management and a continued relaxation of closure by GOI."
2006–2007
On January 25, 2006, HamasHamas
Hamas is the Palestinian Sunni Islamic or Islamist political party that governs the Gaza Strip. Hamas also has a military wing, the Izz ad-Din al-Qassam Brigades...
won the Palestinian legislative elections
Palestinian legislative election, 2006
On January 25, 2006, elections were held for the Palestinian Legislative Council , the legislature of the Palestinian National Authority . Notwithstanding the 2005 municipal elections and the January 9, 2005 presidential election, this was the first election to the PLC since 1996; subsequent...
; the Islamist organization assumed power in March 29, 2006, without accepting the terms and conditions set by the Quartet. Hamas' stance resulted in a near cessation of direct relations between most bilateral donors and the PNA, with only some multilateral agencies and a few donors continuing direct contact and project administration. Quartet's decision met the criticism of the Quartet's former envoy, James Wolfensohn, who characterized it "a misguided attempt to starve the Hamas-led Palestinians into submission," and of UN's Middle East former envoy, Alvaro de Soto. Because of the worsening human crisis, the EU proposed a plan to channel aid directly to the Palestinians, bypassing the Hamas-led PNA; the Quartet approved the proposal, despite the initial US reaction, and the EU set up a "temporary international mechanism" (TIM) to channel the money for an initial three-month period, which was later extended. Oxfam
Oxfam
Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...
was one of the main critics of the EU TIM program arguing that "limited direct payments from the European Commission have failed to address this growing crisis."
| Outcome of the Paris Pledging Conference | |
|---|---|
| Type of Assistance | USD billion |
| Budget Support | 1.5 |
| Humantitarian Assistance | 1.1 |
| Project-based Aid | 2.1 |
| Other Aid | 0.8 |
| Amounts being allocated | 2.2 |
| Total 2008–2010 | 7.7 |
The emergence of two rival governments in the West Bank and Gaza in June 2006 presented the international community with the prospect of shouldering a huge aid burden. The World Bank estimated that in 2008 PNA would need $1.2 billion in recurrent budget support, in addition to $300 million in development aid. The formation of the caretaker government in mid-2007 under Fayyad, and the resumption of aid have partially reversed the impacts of the aid boycott. Nevertheless, economic indicators have not changed considerably. For instance, because of the situation in Gaza, real GDP growth was estimated to be about -0,5% in 2007, and 0,8% in 2008.
2007–2009
In December 2007, during the Paris Donor Conference, which followed the Annapolis ConferenceAnnapolis Conference
-Attendees:U.S. Secretary of State Condoleezza Rice organized and hosted the conference. Palestinian President Mahmoud Abbas, Israeli Prime Minister Ehud Olmert, and U.S. President George W. Bush attended the meeting...
, the international community pledged over $7.7 billion for 2008–2010 in support of the Palestinian Reform and Development Program (PRDP). Hamas, which was not invited to Paris, called the conference a "declaration of war" on it. In the beginning of 2008, The EU moved from the TIM mechanism to PEGASE, which provides channels for direct support to the PNA's Central Treasury Account in addition to the types of channels used for TIM. The World Bank also launched a trust fund that would provide support in the context of the PNA's 2008–2010 reform policy agenda. However, neither mechanism contains sufficient resources to cover the PNA's entire monthly needs, thus not allowing the PNA to plan expenditures beyond a two-month horizon.
The World Bank assesses that the PNA has made significant progress on implementing the reform agenda laid out in the PRDP, and re-establishing law and order; Gaza, however, remains outside of the reforms as Hamas controls security and the most important ministry positions there. Palestinian inter-factional tension continues in the West Bank and Gaza, with arrests of people and closures of NGOs by each side, resulting in a deterioration in the ability of civil society organizations to continue cater to vulnerable groups. Following the 2008–2009 Israel–Gaza conflict, an international conference took place in Sharm El-Sheikh
Sharm el-Sheikh
Sharm el-Sheikh is a city situated on the southern tip of the Sinai Peninsula, in South Sinai Governorate, Egypt, on the coastal strip along the Red Sea. Its population is approximately 35,000...
, Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
, where donors pledged almost $4.5 billion for the resonstruction of Gaza. These funds bypass Hamas, since the PNA, in collaboration with the donor community, has taken the leadership in delivering and distributing the assistance.India which is aspiring to be recognized as 'Globally respected power' has made concerted efforts in fostering better relations with PA. When PAP President Abbas visited New Delhi in 2008 he was offered a credit of US$ 20 million (Rs.900 million) by Indian Federal Government. India also continued to offer eight scholarships under ICCR Schemes to Palestinian students for higher studies in India, while also offering several slots for training courses under the ITEC Program.
2010
The lion's share of the aid comes from the European UnionEuropean Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. According to estimates made by the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
The Palestinian Authority received $525 million of international aid in the first half of 2010, $1.4 billion in 2009 and $1.8 billion in 2008. Foreign aid is the "main driver" of economic growth in the Palestinian territories. According to the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
, the unemployment rate has fallen as the economy of Gaza grew by 16% in the first half of 2010, almost twice as fast as the economy of the West Bank
West Bank
The West Bank ) of the Jordan River is the landlocked geographical eastern part of the Palestinian territories located in Western Asia. To the west, north, and south, the West Bank shares borders with the state of Israel. To the east, across the Jordan River, lies the Hashemite Kingdom of Jordan...
.
In July 2010, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
has outlawed a major Turkish-German donor group, the Internationale Humanitaere Hilfsorganisation (IHH), unaffiliated to the Turkish: İnsani Yardım Vakfı (İHH) that sent the Mavi Mamara aid vessel, saying it has used donations to support projects in Gaza that are related to Hamas, which is considered by the European Union to be a terrorist organization, while presenting their activities to donors as humanitarian help. German Interior Minister Thomas de Maiziere
Thomas de Maizière
Karl Ernst Thomas de Maizière is a German politician , currently serving as the Minister of Defence in the Second Cabinet of Chancellor Angela Merkel....
said, "Donations to so-called social welfare groups belonging to Hamas, such as the millions given by IHH, actually support the terror organization Hamas as a whole."
2011
In March 2011, there were threats to cut off aid for the PA if it continued to move forward on a unity government with Hamas, unless Hamas formally renounced violence, recognized Israel, and accepted previous Israel-Palestinian agreements. Azzam Ahmed, spokesman for Palestinian Authority President Mahmoud AbbasMahmoud Abbas
Mahmoud Abbas , also known by the kunya Abu Mazen , has been the Chairman of the Palestine Liberation Organisation since 11 November 2004 and became President of the Palestinian National Authority on 15 January 2005 on the Fatah ticket.Elected to serve until 9 January 2009, he unilaterally...
responded by stating that the PA was willing to give up financial aid in order to achieve unity, "Palestinians need American money, but if they use it as a way of pressuring us, we are ready to relinquish that aid."
Major donors
Development Assistance Committee
The Organisation for Economic Co-operation and Development's Development Assistance Committee is a forum for selected OECD member states to discuss issues surrounding aid, development and poverty reduction in developing countries...
, the main multilateral donors for the 2006–2007 period were UNRWA and the EU (through the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
); the main bilateral donors were the US, Japan, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and five European countries (Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
and France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
). Since 1993 the European Commission and the EU member-states combined have been by far the largest aid contributor to the Palestinians. The Arab League states have also been substantial donors, notably through budgetary support to the PNA during the Second Intifada; they have been however criticized for not sufficiently financing the UNRWA and the PNA, and for balking at their pledges. After the 2006 Palestinian elections, the Arab countries tried to contribute to the payment of the Palestinian public servants' wages, bypassing the PNA; at the same time Arab funds were paid directly to Abbas' office for disbursement. During the Paris Conference, 11% of the pledges came from the US and Canada, 53% from Europe and 20% from the Arab countries.