International Assistance to the Palestinians after Oslo

Political guilt, wasted money

Anne Le More

• Publisher: Routledge
• Year: 2008
• ISBN:
  9781134052325
• Edition: 1
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

Why has the West disbursed vertiginous sums of money to the Palestinians after Oslo? What have been donors' motivations and above all the political consequences of the funds spent?

Based on original academic research and first hand evidence, this book examines the interface between diplomacy and international assistance during the Oslo years and the intifada. By exploring the politics of international aid to the Palestinians between the creation of the Palestinian Authority and the death of President Arafat (1994-2004), Anne Le More reveals the reasons why foreign aid was not more beneficial, uncovering a context where funds from the international community was poured into the occupied Palestinian territory as a substitute for its lack of real diplomatic engagement. This book also highlights the perverse effects such huge amounts of money has had on the Palestinian population and territory, on Israeli policies in the occupied Palestinian territory, and not least on the conflict itself, particularly the prospect of its resolution along a two-state paradigm.

International Assistance to the Palestinians after Oslo gives a unique narrative chronology that makes this complex story easy to understand. These features make this book a classic read for both scholars and practitioners, with lessons to be learned beyond the Israeli-Palestinian conflict

1
AID BECAUSE OF POLITICS

The analytical, legal and institutional frameworks

Foreign aid is invariably a highly political enterprise. Its motives, objectives and effects are political, albeit to a greater or lesser extent and although the promotion of ‘economic development and welfare’ is the received definition of what constitutes its principal goal.¹ The political nature of assistance has been conceptualized in different ways. Some view aid as a gift, others as an instrument of imperialist domination, still others as a form of purchase. Its rationale has also been analysed through the prism of various paradigms: aid can be seen as motivated by moral imperatives and altruistic feelings (humane internationalism); it can be grounded in mutual economic advantage and enlightened self-interest (liberalism); or it can be driven by foreign policy objectives – whether geopolitical, commercial or cultural – and, in particular, security interests (realism). In reality, the motives for, and objectives of, foreign aid are often mixed and vary quite extensively over time according to each donor and to each particular setting, as well as to whether the assistance provided is developmental or humanitarian.²

As mentioned, foreign assistance to the WBGS was a direct response to the signing of the Oslo agreement and had the explicit political aim of sustaining the Israeli–Palestinian peace process. This combined different motives and meant different things to different international actors, as will be detailed in Chapter 4. Whatever the motivations, aid often implies an asymmetric power relationship between donor and recipient, as terms such as leverage, pressure, coercion and conditionality, often confusingly associated with foreign assistance, denote. In particular, over the last 15 years, the use of economic or political conditionality by donors has become a dominant feature of the commitment, disbursement and allocation of development funds. This has been seen, for instance, with the growth of ‘democracy assistance’ and so-called ‘second-generation’ conditionality whereby aid is linked to policy reform and a host of aspirations associated with Western liberal democracy which embraces such attributes as ‘good’ governance, the rule of law, transparency and respect for human rights.³ Increasingly also, conditionality has been introduced in the context of emergency assistance, as in the Palestinian case, where budgetary support to the PA came to be conditioned on administrative reform from 2002 onwards.

This chapter first provides a brief overview of the key issues raised by the academic and aid communities over the last 15 years with regard to the linkages between aid, politics, conflict and peacebuilding. It then outlines the peculiarity of the environment under which international assistance was delivered, focusing on the legal status of the West Bank, Gaza Strip and East Jerusalem as well as on the evolution – over the course of the decade following Oslo – of international discourse and perceptions vis-à-vis this legal framework. Appreciating the complexity of this environment is essential to understanding the constraints faced by donors, and the room to manoeuvre available to them in their dealings with both the aid recipient, the Palestinians and the aid community’s host country, Israel. Finally, this chapter details the institutional framework underpinning international aid politics to the WBGS and introduces the main political and donor protagonists of this case study.

Analytical background: aid, politics, conflict and peacebuilding

While the relationship between aid and politics is always complex, it is particularly intricate in conflict settings. Since the end of the Cold War, the changing nature of conflict, the new characterization of security as a development – or even a ‘human’ – concern and the weaknesses of international assistance to respond to the complex crises of the 1990s appear to have led to an increasing politicization of assistance whereby aid is now tied to donors’ overall conflict-resolution strategy and political agenda of peace and security. This development took place within the context of calls in the aftermath of the crisis in Rwanda for increased ‘coherence’ between political and humanitarian interventions to manage complex emergencies.⁴

Aid harming politics

The Joint Evaluation of Emergency Assistance to Rwanda was extremely influential in this respect. It concluded that the critical failings in the international response to the genocide lay in the lack of a political strategy to deal with the crisis, relief operations thus disastrously serving as a smokescreen for inaction and, in effect, substituting for political intervention.⁵ One of the report’s main recommendations was greater policy coherence between the political and humanitarian dimensions of the international response to complex crises. This report, and experience in other conflict areas, encouraged new research on the interface between aid and politics. From a focus on exploring the political motivations of donors and governments, analysts turned their attention to the political impact of aid.

The debate which emerged in the aftermath of the Rwandan genocide over the way foreign aid influences the domestic processes and political economy of recipient countries and, more generally, the dynamics of conflict was first particularly vibrant within the humanitarian community. It emerged as evidence grew that aid had in some contexts inadvertently prolonged war, raising the ‘spectre of the well-fed dead’. As famously stated in the opening lines of Mary Anderson’s Do No Harm:

When international assistance is given in the context of a violent conflict, it becomes a part of that context and thus also of the conflict. Although aid agencies often seek to be neutral or nonpartisan towards the winners and losers of a war, the impact of their aid is not neutral regarding whether conflict worsens or abates. When given in conflict settings, aid can reinforce, exacerbate, and prolong the conflict; it can also help to reduce tensions and to strengthen people’s capacities to disengage from fighting and find peaceful options for solving problems. Often, an aid program does some of both: in some ways it worsens the conflict and in others it supports disengagement. But in all cases, aid given during conflict cannot remain separate from that conflict.⁶

Aid can easily be manipulated and become part of the political economy that sustains conflict and affects the economic capacity of belligerents: it can be stolen and diverted by armed factions for military purposes or contribute to the war effort by creating rent-seeking opportunities for local groups or by freeing up local resources.⁷ Its distributional effects and impact on internal balances of power between different groups can ease social tensions or widen them, reinforce the peace process or undermine it.⁸ Aid may also contribute to the continuation of conflict by enabling the parties, whether governments or opposition movements, to ‘evade or defer their responsibility to address the urgent needs of civilian populations and to seek political solutions to the conflict’.⁹ Furthermore, relief operations can also help maintain an illusion of international protection and instil a false sense of security among civilians, with potentially fatal consequences. As is succinctly put by Peter Uvin in an OECD study on the influence of aid in situations of violent conflict:

All aid, at all times, creates incentives and disincentives, for peace or for war, regardless of whether these effects are deliberate, recognized or not, before, during or after war. The issue is then not whether or not to create (dis)incentives but, rather, how to manage them so as to promote conditions and dynamics propitious to non-violent conflict resolution.¹⁰

However, the idea that humanitarian actors should take conflict impact into account when devising programmes and interventions remains a controversial proposition. The classical conception of humanitarianism, as embodied in the Geneva Conventions and Protocols in reference to war situations, stresses the ethical imperative and legal right to protect and assist civilian victims on the basis of need alone, independently of political and military considerations and regardless of consequences.¹¹ The ‘integrationist’ approach to humanitarian and political action advocated in the mid-1990s has been seen by many as posing a threat to the independence of humanitarian action by subordinating it to governments’ political objectives. Traditional humanitarianism continues to emphasize the primacy of the principles of universality, humanity, neutrality and impartiality, especially as the humanitarian dilemma remains compelling: if providing aid can relieve immediate suffering but at the risk of prolonging conflict, withholding aid may perhaps dampen violence but invariably at a high cost to the most vulnerable civilians. Nonetheless, despite these reservations, calls for a more politically informed response and ‘damage limitation’ policy to conflict situations, so as to mitigate aid’s potentially harmful consequences, also gained credence within the relief community.

From the proposition that aid in wartime might have negative effects, the idea that the converse might also be true emerged. The debate on ‘harm’ and conflict impact thus converged with another major theme of reflection within the aid community in the 1990s, namely the relief-to-development debate and the appeal for more developmental approaches to relief in post-conflict contexts, linking humanitarian assistance with long-term strategies such as poverty alleviation, employment generation, environmental protection and institutional development. The objective would be to minimize the negative effects of emergency assistance, for example intensifying aid dependency and weakening local capacity. This rested on the recognition that transition processes could no longer be regarded as sequential or a continuum from relief to development, since a neat distinction from conflict to peace seldom occurred in practice. Rather, humanitarian and development aid often have to be provided simultaneously.¹²

New research also emphasized the need to refine the definition of peacebuilding and conceptualize it inductively: this implies refraining from assuming that every war-torn society will benefit equally from the standard menu of international assistance, and focusing instead on the in-depth analysis of the causes of a particular conflict and the interrelationship between the security, political, social and economic spheres, as well as seeking to devise appropriate short- and long-term strategies accordingly. Within this double context, aid came to be seen as a potential mechanism for conflict reduction and resolution: the proposition that assistance could be ‘smart’ and designed with the explicit political objective of addressing the root causes of conflict, shaping its processes and transforming it, gained support. From being an end in itself, humanitarian assistance became a means to foster developmental and peacebuilding goals as part of the overall ‘coherence’ strategy.¹³ In the process, however, the distinctions between conflict prevention and conflict resolution, and between development and humanitarian aid, became increasingly blurred.

Aid in support of politics

As the role of aid in conflict areas expanded in the 1990s to be incorporated into a wider peace and security agenda, and greater emphasis was placed on the linkage between relief and development, a growing appreciation of the political impact of developmental aid also emerged. Concern that intervention by development agencies might also aggravate inequities and exacerbate conflict became widespread.¹⁴ Agencies involved in development activities in a peacebuilding context faced the same ‘politicization’ dilemma as their humanitarian counter-parts, although perhaps less acutely given the different terms of engagement of humanitarian and development actors with donors and Member States. This was nonetheless clearly the case for the Bretton Woods Institutions.¹⁵

With the World Bank and the IMF becoming prominent actors in multilateral reconstruction efforts, the issue of coordinating their development and financial strategies with the peace agenda of political and military actors came to the fore. Since its inception, the Bank had been directly concerned with conflict situations: it was established during the Second World War as the ‘International Bank for Reconstruction and Development’ and was active in post-conflict reconstruction during the Cold War. Nonetheless, it initially adopted a very cautious attitude vis-à-vis the 1990s debate on the role of external assistance in crisis prevention, peacebuilding and conflict management. This reticence stemmed mainly from the fact that the Bank does not like to see itself as a ‘political’ agency, although as an institution made up of Member States it is obviously affected by its member countries’ political agendas, influence and voting majorities in the supervisory bodies. Still, its mandate is based on the doctrine of ‘economic neutrality’, with poverty reduction, economic stabilization and sustainable development being its central objectives.¹⁶

However, it rapidly became clear that in post-conflict settings, it was particularly difficult to insulate economic decision-making process from all political considerations.¹⁷ For instance, the conflict-fuelling impacts of IFI standard neoliberal macroeconomic policies of fiscal and monetary restraint on war-torn societies became an area for major concern in the early 1990s. Calls for flexibility in the implementation of their macroeconomic programmes, as well as enhanced transparency, information shari...

Table of contents

• ROUTLEDGE STUDIES ON THE ARAB–ISRAELI CONFLICT
• CONTENTS
• ILLUSTRATIONS
• PREFACE
• ACKNOWLEDGEMENTS
• CHRONOLOGY
• ACRONYMS AND ABBREVIATIONS
• INTRODUCTION
• 1 AID BECAUSE OF POLITICS
• 2 ISRAELI POLICIES
• 3 PALESTINIAN ADJUSTMENT
• 4 AID INSTEAD OF POLITICS
• 5 ESPOUSING ISRAELI POLICIES
• 6 FUNDING PALESTINIAN ADJUSTMENT
• CONCLUSION
• APPENDIX I Overview of foreign aid to the occupied Palestinian territory, 1994–2004
• APPENDIX II The aid coordination structure during Oslo and the intifada
• NOTES
• BIBLIOGRAPHY
• INDEX