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What are Palestinians doing with U.S. money?

Updated: Oct 14, 2023

Unless Western donors bang on the table and demand that the Palestinian Authority use their money to bring democracy to its people and prepare them for peace, the prospects of reviving any peace process in the Middle East will remain zero.

During the past 20 years, the U.S. has invested $4.5 billion in promoting democracy among the Palestinians in the West Bank and Gaza Strip and boosting the Israeli-Palestinian peace process.

This is what Palestinian Prime Minister Rami Hamdallah revealed during a meeting in Ramallah with Congressman Kevin McCarthy, Majority Leader of the U.S. House of Representatives.

Hamdallah said that the money was also invested in projects in various Palestinian sectors.

The $4.5 billion that Hamdallah talked about does not include the billions of dollars poured on the Palestinian Authority (PA) since its creation in 1994.

Palestinian economic analysts estimate that the PA has received a total of $25 billion in financial aid from the U.S. and other countries during the past two decades.

One does not have to be an expert on Palestinian affairs to see that the billions of dollars have neither created democracy for the Palestinians nor boosted the Israeli-Palestinian peace process.

Twenty years later, the Palestinians still have a long way to go before they ever see real democracy in the West Bank or Gaza Strip.

To begin with, the Palestinian Authority, which was born out of the 1993 Oslo Accords between Israel and the PLO, was never a democratic regime.

On the contrary; what the Palestinians got from the start was a mini-dictatorship run by Yasser Arafat and his PLO and Fatah cronies. It was a corrupt regime, was directly funded and armed by the U.S., Europe and several other countries.

Those who were funding Arafat's autocratic regime back then never cared about either democracy or transparency. They were pouring billions of dollars on the PA without holding its leaders accountable.

The result was that the Palestinians got a regime that not only deprived them of most of the international aid, but that also cracked down on political opponents and freedom of speech. The Palestinian Authority was actually a one-man show called Yasser Arafat; he and his cronies were the main benefactors of American and European taxpayers' money.

At the time, the assumption in the U.S., Europe and other countries was that a corrupt and repressive Arafat would one day make far-reaching concessions for the sake of peace with Israel.

Because he was on the payroll of the Americans and Europeans, the thinking went, Arafat would never be able to say no to any offer -- such as the generous proposal he received from then Israeli Prime Minister Ehud Barak at the botched Camp David summit in the summer of 2000.

But when Arafat was finally put to test at Camp David, which was sponsored by President Bill Clinton, he walked out of the summit, accusing the U.S. of trying to force him to make concessions that no Palestinian would ever accept.

The billions of dollars that Arafat received between 1994 and 2000 from the Americans and the international community failed to convince him to accept the most generous offer ever made to the Palestinians by an Israeli prime minister. Even worse, the first seven years of the peace process resulted in the second intifada, which erupted in September 2000 -- a few months after the collapse of the Camp David summit.

The refusal of the international community back then to hold Arafat accountable was the main reason a majority of Palestinians were driven into the open arms of Hamas. Palestinians lost faith not only in the peace process, but also in the Palestinian Authority and its leaders. Palestinians saw no improvement in their living conditions, mainly as a result of the PA's corruption.

That is why they turned to Hamas, which promised them change, reform and an end to financial corruption. The Americans and Europeans are therefore responsible for Hamas's rise to power.

Until 2007, the Palestinians had only one corrupt and undemocratic regime, called the Palestinian Authority. Since then, the Palestinians have earned another regime that is even more ruthless and repressive: Hamas.

So if $4.5 billion brought the Palestinians two corrupt and undemocratic regimes, what would have happened had the U.S. and Europe invested a few more billion dollars in promoting Palestinian democracy?

The Palestinians would most likely have seen the emergence of a few more dictatorships in the West Bank and Gaza Strip.

Of course, the Palestinian Authority prime minister did not tell the visiting U.S. Congressmen that the $4.5 billion the Americans invested in promoting Palestinian democracy went down the drain or ended up in secret Swiss bank accounts.

Palestinian Prime Minister Rami Hamdallah

Nor did he tell the Congressman that the Palestinians do not have a functioning parliament or a free media under the PA in the West Bank or under Hamas in the Gaza Strip.

And, of course, Hamdallah never told the Congressman that for Palestinians, presidential and parliamentary elections remain a remote dream.

But, like most Westerners who visit Ramallah, Congressman McCarthy obviously did not ask harsh questions, especially regarding the Palestinians' responsibilities toward democracy and the peace process.

The Congressman was undoubtedly glad to hear that the U.S. has invested $4.5 billion in Palestinian democracy and boosting the peace process. But did he and others ever ask whether and how the Palestinian Authority used those funds to advance these two goals?

One does not need to ask Palestinian Authority officials about the way they spent the American aid money because the reality on the ground is too obvious.

The PA took the billions of dollars and continues to operate as a corrupt and undemocratic regime. Democracy is the last thing the Palestinians expect to see from the PA or Hamas.

And what has the Palestinian Authority done with the billions of dollars to advance the cause of peace with Israel? Has the PA leadership used this money to promote peace and coexistence with Israel?

The answer, of course, is no. Instead of using American financial aid to further this cause, the PA has done -- and continues to do -- the exact opposite.

In addition to inciting its people against Israel on a daily basis, the Palestinian Authority leadership has been using these funds to wage a massive campaign in the international community with the purpose of isolating and delegitimizing Israel and turning it into a pariah state.

The "investment" in Palestinian democracy and peace with Israel has been a complete failure because of the refusal of the U.S. Administration to hold the Palestinian Authority fully accountable.

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