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September 2, 2014 / 7 Elul, 5774
At a Glance

Posts Tagged ‘aid’

Palestinian Economy in Downfall Born by ‘Reluctance’ to Accept Israel

Saturday, August 18th, 2012

A cash crunch due to a severe drop in foreign aid since 2011 may be ushering in business failures and layoffs in the area under Palestinian Authority rule, leading to the worst crisis in the PA’s 18-year existence, according to AP.

It appears that the Palestinian Authority will not survive this crisis without a major infusion of cash.

In recent months, the PA has been unable to meet all its obligations, most notably the salaries paid out to some 150,000 civil servants and security personnel, which account for about half of the Palestinian government’s $4 billion budget.

For comparison, Israel’s annual government expenditures in 2011 were estimated at $74.8 billion, with estimated revenues at $66.68 billion, for a population roughly three times that of the PA.

Arab citizens constitute close to 25% of “green line” Israel.

One of the reasons this coming crisis may last longer and hurt worse is the fact that the PA can no longer borrow money to fill its gaping deficits. Economist Samir Abdullah told the AP that the PA owes more than $2 billion to local banks, private companies and the public pension fund.

“If there is no reversal in the current trend, the Palestinian Authority will not survive this year,” said Abdullah, who used to serve as a PA government minister.

And the PA has received only half the needed foreign aid to close its 2012 budget deficit of $1.2 billion, according to its Finance Ministry.

Palestinian officials blame the U.S. for withholding aid as a means of applying political pressure. The PA was counting on $200 million from the U.S. in budget support in June, but the payment was held up by Rep. Ileana Ros-Lehtinen, R-Fla., chair of the House Foreign Affairs Committee.

The U.S. 2011 payment was delayed by a congressional hold, in response to Palestinian President Mahmoud Abbas’ appeal to the UN to recognize a Palestinian state in the disputed territories.

The United Arab Emirates cut aid from $174 million in 2009 to $42.5 million since the beginning of 2011.

Qatar refuses to send money as long as there’s no reconciliation between Abbas and the Hamas.

Israel has been blamed for the inability of the Palestinian economy to be self-sustaining, because of the security-related restrictions it places on movement of goods, and the 5-year blockade on Gaza.

According to the AP, Palestinian officials, the World Bank and the International Monetary Fund, say the PA government can only become self-sufficient if Israel removes a network of restrictions on trade and access to resources that discourage investment, drive up costs and limit business opportunities.

But despite some loosening of restrictions, the Israeli government is reluctant to open up new opportunities for Palestinian terrorists to squeeze through the protective fences it has erected over the past ten years.

And so it appears the Palestinians are trapped by their own reluctance to accept Israel’s right to exist, coupled with their continued efforts to inflict terrorist attacks on Israel, and this time no one out there seems eager to spare them a dime.

Is a Palestinian State Today Economically Viable?

Wednesday, August 8th, 2012

Over the last year Palestinian authorities have spent a great deal of time calling for a unilateral declaration of a Palestinian state while refusing to resume peace negotiations with Israel. Although they garnered political support for this in the UN General Assembly in September 2011, a new report from the World Bank, from April 2012, and made public in July 2012, indicates that the efforts of the Palestinians and their supporters would have been more usefully employed in thinking about the economic viability of such a future state.

The conclusion of this sobering report, which contradicts the more optimistic picture of the Palestinian economy presented by the IMF in 2011, is that although the Palestinian Authority [PA], the official representative group established in 1994, has made steady progress in many areas towards establishing the institutions required by a future state, the economy is currently not strong enough to support such a country. The report is a bitter commentary on the the Palestinian economy — especially compared to the economies of Israel and even Jordan — currently in a self-inflicted decline induced by the violence it brought on itself by launching the Second Intifada in September 2000.

The crucial problem according to the report is that the Palestinian economy has become increasingly dependent on foreign aid to drive its growth, a means of generating income that is insufficient for economic sustainability. Foreign aid has given the Palestinians billions of dollars — by 2008 about 56% of GDP. This led to a GDP growth of 7.7% between 2007 and 2011; in some years its growth even reached 9% a year.

But that growth is artificial and is not sustainable for three reasons. Foreign donations have funded government expenditures and been largely in the area of government services, real estate, and other non-tradable sectors. The productive sectors have declined in importance: there has been a decrease in manufacturing, down from 13% to 10%, and in agriculture from 9% to 6%.

The inflow of foreign aid in 2007 led to some improvement in GDP in the West Bank. Gaza experienced growth because of the foreign aid and the expansion of trade through tunnels from Egypt. However, the Palestinians now face a crisis because important donor countries have so far not sent aid or have sent less aid in 2012. The PA now has a deficit of $1.5 billion in its budget of about $4 billion, and a cash shortfall of $500 million. It has been promised $100 million from Saudi Arabia which is insufficient to end the crisis.

Those who admired the second Intifada, heralded by Yasser Arafat but which generated violence for over two years and halted progress to peace negotiations, will now realize that it was a disaster, a severe blow to the Palestinian economy. The violence only resulted in the West Bank and Gaza suffering a severe economic contraction. Between 1999 and 2002, real GDP fell by 27%. In 2007 real per capita GDP was 23% below the 1999 level. Industry, agriculture, tourism, and some other services declined. Public administration, defense, and public services such as health and education grew from 20% of GDP to more than 27%.

The report argues that the PA must increase private sector growth, must improve its trade infrastructure to lower costs and increase efficiency, must improve the investment climate and must improve the quality of the workforce. Sustained economic growth entails a strong dynamic private sector that can generate jobs both to employ a rapidly growing population and to provide resources for government to provide services.

This necessary dynamism is lacking. The Palestinian private sector is overwhelmingly dominated by small family-owned businesses. The high cost of doing business lowers competitiveness. The Palestinian businesses mostly focus on the local market. In addition, relatively high wages, compared to other countries such as Turkey and India, high transportation costs, and low level of innovation also reduce competitiveness.

Yet, even with significant growth, it is unlikely that the PA can support an administration of its current size. It must reduce costs, raise revenues, and move to fiscal sustainability. Politically, the report recognizes that investment would be increased if a peace agreement were reached between the Palestinians and Israel.

The Palestinian economy over the last decade has been characterized by high levels of unemployment and underemployment, some of the highest rates in the world. These have varied between 20% and 30%. Those rates are accompanied by low levels of labor force participation, about 41%. Even more troubling has been the decline in youth employment and economic participation, and the extremely low level of female labor participation. In 2010 youth unemployment in general was about 34%, and 53% in Gaza. During the last decade, the rate for women participating in the labor force was below 16%. The result of this high unemployment and the decline in private sector wages relative to government wages, has led to high levels of poverty: in 2009 it was 22% in the West Bank and 33% in Gaza.

A Paradoxical Relationship

Thursday, August 2nd, 2012

http://fresnozionism.org/2012/08/a-paradoxical-relationship/

Commentators are fond of saying that the US-Israel relationship is ‘complicated’. Actually, it’s not.

Let’s explain what is usually considered a major paradox: the US provides billions in military aid to Israel, enabling it to keep its enemies at bay. But at the same time its diplomats claim that they don’t know what the capital is, and the major thrust of US policy since 1973 has been to force Israel to withdraw to indefensible boundaries, despite the obvious damage to its security.

Israel’s foes in the US will say that the aid is extorted by the all-powerful “Israel lobby.” But this is nonsense — AIPAC (stupidly, in my opinion) brags about how powerful it is, but it has lost more than one important battle. And there are countervailing forces, like the Saudi lobby, which has been very effective in quietly working against Israel through its academic grants and “post-emptive bribery” of government officials (“scratch our backs today and we’ll feather your nest when you retire,” to mix metaphors) like Jimmy Carter.

There are several reasons for the military aid: one is that it is spent in the US, which is helpful to our economy. And where else can we sell weapons without worrying that they might some day be turned against our own soldiers? But the main reason is that the great majority of Americans strongly support Israel, want to see it survive, and express this to their members of Congress.

Walter Russell Mead, in a perceptive discussion of Mitt Romney’s attitude toward Israel, wrote,

…the idea that Israel needs us and that it is both our moral duty and a strategic interest to support it to the hilt has sunk so deeply into the American public mind that Governor Romney can hardly go wrong in standing up for it.

It sounds odd, but it is very true: Israel is as American as apple pie. By showing how much he loves Israel, Governor Romney is telling millions of voters that he is a solid and loyal American.

Don’t think that the other side doesn’t understand this. Public support for Israel is under siege from several directions.

Probably most important is the attempt to turn Christian believers against Israel, by falsely accusing Israel of mistreatment of Palestinian Christians — every Christmas we see a flood of media items to this effect — or by pushing anti-Jewish replacement theology. They have been much more successful with the “mainstream” Protestant churches like the Presbyterians, whose General Assembly came within a couple of votes of calling for divestment from companies that do business with Israel, than with the Evangelicals, although they are trying.

What about secular Americans and Jews? Here the approach is to attack the idea that Israel really is a democracy that shares American values. So we have Peter Beinart arguing that Israel is becoming an undemocratic theocracy which behaves in racist ways toward minorities. We have representatives of the Union for Reform Judaism suggesting that Israel is institutionalizing the misogyny of ultra-orthodox extremists. There are even distorted analogies drawn between the Palestinian movement and the US civil rights movement!

The really interesting question is not why average Americans support Israel, but rather why our Administration and State Department continue to implement policies that are inimical to its survival, despite the clearly expressed will of the people.

Fighting The Tuition Crisis With Financially-Driven Parent Volunteer Programs

Wednesday, July 11th, 2012

A recent CNN Money article focused on how more students than ever are requesting need-based financial aid from the private schools they attend. “Private schools are getting flooded with financial aid applications, and a growing number of the parents seeking help are earning $150,000 or more a year,” the article stated. It also pointed out that “overall, the average cost of tuition at private schools across all grades is nearly $22,000 a year, up 4% from a year ago and 26% higher than it was in the 2006-07 academic year, according to the National Association of Independent Schools.”

To make matters worse for private day schools, the recession of the past few years has adversely affected the fundraising numbers in many of these schools, especially in the geographical areas hardest hit. And if that wasn’t bad enough, once again the Obama administration, for a fifth time has proposed lowering the income tax deduction for charitable giving. By decreasing the value of itemized tax deductions for higher-income taxpayers, the president’s proposal would weaken the incentive for the wealthy to give to private day schools and other non-profit organizations.

In light of these developments, schools must consider new and innovative ways to increase income and reduce costs in order to maintain financial stability and fiscal health. One approach that should be considered is to institute a parent volunteer program. There are many schools throughout the country that have established parent volunteer programs. However, the central purpose of many of these programs is to benefit the educational quality of the school. That’s the objective behind Three for Me, a national parent volunteer organization running in thousands of schools across the U.S.

While enhancing educational quality through parent volunteer efforts is certainly worthwhile, schools should consider making financial goals the primary objective of such a program. By using the time and efforts of the parent body, schools can effectively convert hundreds of parent-hours into thousands of dollars in revenue and savings – in essence, monetizing the massive amount of man-hours of the parent body.

Many school administrations are already overworked and understaffed, so in order for such a program to succeed it would need to be low maintenance and easy to manage. Further, in order to generate the necessary volunteer hours to have a financial impact, parent participation would need to be made obligatory (staff excluded). There is a case to be made for making participation voluntary for full paying families while making financial aid grants conditional on participation. It is not unreasonable to ask the beneficiaries of financial aid to give a small amount of their time back to the school each year. However, in many schools, the perceived disparity would be a non-starter.

A little over ten years ago, the school I manage instituted such a program. We made participation obligatory for all families receiving tuition assistance and voluntary for all full-paying families. Staff was exempt. The results of the program are compelling. From a pool of approximately 200 parent volunteers, annual gross revenue raised totals on average $170,000 while annual costs savings total on average $30,000. The program’s methodology has been fine-tuned over the years so that today not only has it become a vital part of our operating budget, it takes a relatively small amount of time to administer.

Either way, undertaking and implementing such a program is a serious commitment. While the program is not difficult to manage once it is up and running, it can be somewhat time consuming to establish. In addition, there is no doubt that many parents will be less than happy with this new obligation. But by having the parents give back a minimum of one or two hours each month, the increase in revenue and cost savings can bring great financial relief to the school especially in these very difficult economic times.

Finally, it should be pointed out that this is only part of an overall solution. Schools need to adapt many of the best practices in corporate management in order to grow and thrive. Foremost is implementing strong and effective internal and financial controls and then training the staff with the knowledge to execute these controls properly. This should be done in conjunction with establishing proper governance and long-term strategic planning with active parent involvement.

Report: Western Governments Fund Anti-Israel Church Activism

Tuesday, July 3rd, 2012

A report published on Monday by NGO Monitor reveals that several European governments, as well as the United States and Canada, have been providing funds for church-based efforts to delegitimize Israel, starting at the 2001 UN Durban Conference, and continuing with boycotts, divestment, and sanctions (BDS) over the past decade.

These tax-payer funds are disbursed as grants to church-based humanitarian NGOs, which then transfer these funds to highly politicized pro-Palestinian NGOs.

The report mentions Sabeel Ecumenical Liberation Theology Center, located in Jerusalem, founded in 1989 and led by Anglican Canon Naim Ateek. Sabeel seeks to build a critical mass of influential church leaders who will amplify its message that Israel is solely culpable for the origin and continuation of the Israeli-Palestinian conflict.

Through its international “Friends of Sabeel” network Sabeel hosts numerous church-based conferences in the U.S., Canada, Europe and Australia each year where it promotes its agenda to large audiences of Christians.

Sabeel works with pro-Palestinian activists within different denominations, such as the U.S. Presbyterian Church’s Israel-Palestine Mission Network, the Episcopal Church’s Palestine Israel Network, the United Methodist Church’s General Board of Global Ministries, and World Council of Churches.

The report accuses Sabeel of using anti-Semitic deicide imagery against Israel, and of disparaging Judaism as “tribal,” “primitive,” and “exclusionary,” in contrast to Christianity’s “universalism” and “inclusiveness.”

The report says the Dutch government grants hundreds of millions of euros annually to Dutch church-based aid organizations such as Kerk in Aktie (KIA), the Interchurch Organization for Development Cooperation (ICCO), and Cordaid. These groups disburse these funds to NGOs around the world, including Sabeel.

The report points out that Sabeel lists Kerk in Aktie among its donors. KIA claims to support Sabeel in order to promote the voice of Palestinian Christians within the church.

The Swedish government’s International Development Cooperation Agency (SIDA) has been providing substantial aid to Palestinians in the West Bank and Gaza since 2000. Much of this aid is funneled through Diakonia, Sweden’s largest humanitarian NGO.

Sabeel’s website states, “Diakonia is closely associated with Sabeel” and credits this relationship for changing the direction of Swedish foreign policy toward Israel.

The Canadian government’s Canadian International Development Agency (CIDA) provided $44.6 million to the Catholic Organization for Development and Peace (Development et paix) for the five year period 2006 to 2011, some of which has been donated to Sabeel. For the period 2011-2016, CIDA granted Development and Peace $14.5 million.

In its 2011 annual report, Sabeel listed Development et paix as a donor without specifying the amount.

According to its 2010-2011 Annual Report, Development and Peace granted $180,000 to the “Palestinian Territories” without specifying the recipients.

The National Endowment for Democracy, mostly funded by the U.S. Congress, granted the Holy Land Trust (HLT) $124,300 (2009, 2010, 2012).

The Holy Land Trust (HLT) is a signatory to the 2005 “Palestinian Civil Society Call for BDS” and supports the Kairos Palestine document. Similar to Sabeel, HLT conducts highly politicized tours to the region targeting church leaders and the international community, claiming to provide “cross cultural and experimental learning opportunities in both Palestine and Israel.”  HLT’s influence is felt in churches across the globe.

For the complete report go to: BDS IN THE PEWS: European, U.S. and Canadian Government Funding Behind Anti-Israel Activism in Mainline Churches.

Rubin Reports: Where Did All the Billions of Dollars Given to the Palestinian Authority Go?

Monday, June 4th, 2012

http://rubinreports.blogspot.co.il/2012/06/where-did-all-billions-of-dollars-given.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+Rubinreports+(RubinReports)

Palestinian Authority (PA) Prime Minister Salam Fayyad says that his regime is short of funds. And meanwhile a reader asks me:

“Can you please explain to me why 20 years after Oslo and billions in dollars in foreign aid, the Palestinian Authority (PA) still has not built modern hospitals? Or rather, why do the donor countries pour money down the PA drain without expecting even some face-saving results?”

Good question. Short answer: Swiss bank accounts. In other words, a huge amount of the money has been stolen. There is nothing more distasteful than rulers of a people–especially a poor people–who complain about their subjects’ suffering but at the same time that they profit from it. Of course, when some foreign observer sees Palestinians in poor conditions they blame Israel, thus furthering the cause of the same leaders who – by their intransigent policies – ensure that the situation continues.

The personal wealth of PA “president” Mahmoud Abbas is estimated at $100 million. Add onto that millions of dollars for a large number of PA and senior Fatah officials along with the hundreds of millions of dollars that Yasir Arafat carried off and you get the idea. Remember, too, that this total of about a half-dozen billion dollars over the last twenty years has gone to an entity ruling just over two million people.

I have seen the villas of the PLO leaders in Tunis and the PA leaders in the West Bank and Gaza Strip. I have followed in detail the saga not only of Yasir Arafat’s personal stash but also how he used corruption to sustain his political control. And his heirs mostly continue to run the Palestinian movement.

It is easy to forget that the PA has existed for 18 years and governed virtually every Palestinian in the West Bank and the Gaza Strip starting about 16 years ago. That’s a long time. And while Israel can be accused of harassment and putting up various roadblocks, its part in this problem has been limited. Indeed, Israeli actions that have hurt the PA’s economy have arisen in direct response to episodes of terrorism, violent confrontation, and all-out wars started by the PA itself.

Foreign donors have learned that no matter how great the humanitarian benefit of any project it will only get done if they pay for it and supervise it directly. One notorious example was the effort to build a better sewer system in the Gaza Strip (before the Hamas takeover) which was delayed for years while the PA did nothing to help its own people.

PA leaders have received more aid money per person than anyone else in history and yet the results have been remarkably unimpressive. The leaders have looted the money and used it as political pay-offs to buy patronage. By patronage I mean paying off the proportionately huge security forces that guard the PA and provide jobs and salaries for its political supporters.

Note that in recent years, since Hamas seized the Gaza Strip the aid money has gone mostly to the West Bank only, though some of it is used to pay PA employees in the Gaza Strip to keep them loyal even if these people just stay at home. In other words, the level of aid has stayed the same but the number of people being supported generally has been cut in half.

Yet the PA cannot provide jobs for most of its people or build good institutions. Luxury apartments are going up but not hospitals, schools, and infrastructure improvements. Even though the PA economy is doing well–how could it not do so given the tidal wave of aid?–the regime cannot even enforce its own law forbidding Palestinians from working on Jewish settlements on the West Bank. Thousands do.

Prime Minister Salam Fayyad is respected in the West as a relatively honest, professional, and moderate guy who tries to stop the thievery. He is totally powerless in political terms. The leaders of Fatah have been working endlessly to get rid of Fayyad so they can have unrestricted access to the loot again, while Hamas also wants to fire him. Only the demands of the Western money donors have kept him in office. But for how much longer will that be true?

Rubin Reports: What to Say When You’re Handed the ‘Obama is Good for Israel’ Talking Points

Sunday, June 3rd, 2012

http://rubinreports.blogspot.co.il/2012/06/what-to-say-when-youre-handed-obama-is.html

Many Americans, and particularly Jews, are starting to receive mailings encouraging them to vote for or donate to the reelection campaign of President Barack Obama by arguing that he is pro-Israel. Several readers have asked me to provide them with responses. Here is a brief answer.

These emails and mailings, though designed to look as if they were written by concerned individuals, clearly draw their texts from talking points posted on the Obama reelection site. The arguments are very thin and selective but are presented as if they represent the totality of Obama policy.

The main arguments are:

1. Obama says he likes Israel.

That’s nice but so what? Of course it is good when he says nice things (by coincidence, no doubt, usually to Jewish audiences) but one can also find a lot of nasty remarks by him, his advisers, and various officials appointed by him. Every president for the last half-century has said similar nice things; not all the presidents put together during this period have said or done so many hostile things. While it is a great exaggeration to say that Obama hates Israel or wants to destroy it, I think it is fair to say that no president (including Jimmy Carter when in office) has been so cold toward Israel and basically failed to understand its nature and interests.

2. Israeli leaders say Obama is great.

Yes, that’s nice but it’s not what they say in private. I can tell you authoritatively that not a single Israeli leader in any party has a high opinion of Obama with regard to Israel and its interests. But it is their job to lavish praise on America’s president. Their task is not to defeat Obama or to critique him but to get along with him as well as possible in order to protect Israel’s long-term alliance with the United States without sacrificing any of Israel’s vital interests. They’ve done it well. The one moment the truth emerged was when Obama betrayed Israel, on the diplomatic level, by announcing, without consultation, a new policy on peace terms while Prime Minister Benjamin Netanyahu was flying to Washington. You think Israeli leaders (and this is not ideological, not a matter of left or right) have a high regard for Obama? Read Netanyahu’s speech to the joint session of Congress.

Perhaps the equation can be summarized as follows: Obama just gave Israeli President Shimon Peres a presidential medal of freedom. He also has just helped give Israel a second Muslim Brotherhood-dominated regime next door and insists that this is a good thing.

3. US-Israel bilateral relations are good especially with regard to military aid.

That’s true but only a small part of that relates to Obama’s benevolence. Why?

a. Congress supports Israel. There was more push-back against Obama from Democratic members on this issue than on any other, foreign or domestic. Thus, Israel is the only “target” of Obama whose constituency has vocal defenders within his own party that raise the cost of his actions against it, at least during his first term. (Note that last phrase.)

b. The same applies to public opinion, which is strongly pro-Israel. This factor also inhibits Obama, at least during his first term. (Note that last phrase.)

c. . Regarding military relations, the U.S. armed forces are generally quite pro-Israel and want these programs. Many of them are based on previous commitments which Obama merely continues.

An especially important reason why Obama’s Administration hasn’t been far more hostile to Israel in practice is that the Arabs and Iran shafted it. Remember that Obama offered to support the Palestinians, pressure Israel, and accelerate talks if only the Arab states and Palestinian Authority showed some flexibility. They repeatedly rejected his efforts—refusing even to talk–giving him no opportunity or incentive to press Israel for concessions. Note, too, though, that the repeated humiliations handed him by the Arabs never made him criticize them publicly, change his general line, or back Israel more enthusiastically.

Finally, there’s the most important factor of all. The damage Obama has done to Israeli security is not on bilateral relations or the peace process but regarding his regional policy. This includes his:

–Soft line toward antisemitic, anti-Israel, and also anti-American Islamism.

Printed from: http://www.jewishpress.com/indepth/analysis/rubin-reports/rubin-reports-what-to-say-when-youre-handed-the-obama-is-good-for-israel-talking-points/2012/06/03/

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