Rep. Gary L. Ackerman, Chairman

“Connecting the Money to the Mission: The Past, Present, and Future of U.S. Assistance to the Palestinians”

House Subcommittee on the Middle East and South Asia

December 12, 2007

Like an old Polaroid picture, the image developing from the international conference at Annapolis is becoming clearer, and it is beginning to look slightly more like a window of opportunity than a mere photo-opportunity. My concern, and I believe that of many other Members, is that the United States will do with this opportunity what it has done with other such opportunities: we’ll mostly ignore it, and hope that by doing the same things with our aid that we did in the past, or perhaps just doing more of it, we’ll somehow, this time, by prayer, magic, karma, or good luck, come out with a better outcome.

Personally, I think prayer is important, and good luck is essential. But if we expect this period in the peace process to yield more than the barren and bitter years of the recent past, we’ll need to do more planning, engage in more international coordination, and, dare I say it, come up with a strategy that matches resources to objectives.

At Annapolis, Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas undertook to begin “vigorous, ongoing and continuous negotiations” on Final Status issues, and agreed further to establish a U.S., Israeli and Palestinian mechanism to follow up on the implementation of the first, and stickiest, stage of the Road Map. For those who don’t speak “peace process,” under the first stage of the Roadmap, Israel is required to freeze settlement activity and uproot unauthorized outposts, and the Palestinians have to uproot the terrorist infrastructure. I believe, however, that it is the mostly unmentioned question of Palestinian governance, that will be the key to success in both negotiations on core issues and efforts to change the situation on the ground. And I believe it is the governance track that is most in need of more U.S. attention, and which could benefit the most from carefully and cleverly structured U.S. assistance.

Put simply, if there is no Palestinian governing capacity, Israeli leaders will rightly see negotiations on sensitive Final Status issues, such as Jerusalem, borders and refugees, as a merely academic exercise at best, and as senseless politically suicidal-masochism at worst. Without Palestinian governance and, particularly, security reform, there will be no law and order for ordinary Palestinians; there will be no future for a Fatah party that had become too dumb, fat and happy to recognize its was losing the confidence of the Palestinian people; and there will be no loosening of Israeli checkpoints, roadblocks and night-raids. Moreover, as long as the letters PA stand for Palestinian Anarchy rather than Palestinian Authority, no Israeli government is going to sincerely embrace the domestic political misery that will accompany a decision to truly end settlement expansion, much less the political root canal involved in removing unauthorized outposts.

There are some signs of movement on the governance track, but there still does not appear to be an international consensus on a strategy for reforming the Palestinian Authority. To its credit, the Bush Administration has proposed a $400 million boost in U.S. assistance, including $150 million in direct cash assistance. To its detriment, the Administration’s proposal lacks any kind of performance-based conditionality. American money has to start leveraging change, not just buying more of the same. Personally, I believe the Administration’s request has merit, not least because if America doesn’t pony up, we’ll have no credibility discussing how others should spend their own money. And we need desperately to start talking to others, in Europe, Asia and, especially, in the Middle East, about a dramatic reorientation of both direct and project-based assistance programs for the Palestinians.

The President’s proposal supports the leadership of President Abbas and Prime Minister Salam Fayad, which is absolutely worth doing–the only alternative being HAMAS. But it tragically doesn’t even contemplate changing the paradigm for our assistance. Unfortunately, like previous tranches of American aid, there is no conditionality, there are no performance measures, and there are no incentives or disincentives for the kinds of changes and reforms necessary to rehabilitate and reinvigorate the Palestinian Authority.

The immediate needs of the Palestinian people are for public order, clean effective government, economic opportunity and salaried employment. Israel can help alleviate some, but certainly not all of these deficiencies. In my experience, complaints about checkpoints, road blocks and the separation barrier usually leave unmentioned the catalyzing role of the thousands of Israelis burnt, mutilated or killed by suicide bombers. Ultimately, insofar as the Palestinians want to control their own destiny, they must accept responsibility for shaping it.

The United States and others in the international community can best help them do so by using our assistance to leverage significant transparency, anti-corruption, and security service reforms within the Palestinian Authority; by encouraging a genuine and thorough housecleaning within Fatah; by underwriting large-scale housing or other labor intensive projects that will put people back to work; and by training and equipping an effective Palestinian civilian police force and a truly independent Palestinian judiciary that can provide law and order. Despite all the international aid that’s been spent since the first days of Oslo, effective Palestinian institutions and good governance remain notional rather than tangible. These things will not happen on their own, or by miracle, or by magic; and there will not be a “better” time to achieve them in the future.

Next week, at the international donors conference for the Palestinians, Abbas and Fayad will be asking for as much as $5.8 billion with 70 percent going for direct budget support–including a large proportion that will go for salaries that are often little more than welfare and loyalty payments–and the remaining 30 percent for development projects.

Unfortunately, even if every penny requested is actually pledged, and even if what is pledged is actually delivered, unless there are real reforms in the Palestinian Authority including the cultivation of real institutions, there will be no real change in either Palestinian quality of life, or their prospects for statehood. Without institutions that are larger than mere individuals, without infrastructure that shows ordinary Palestinians that their state is taking shape, without effective and honest governance, and real security reform, there will be no revival of the Palestinian economy, there will be no Authority in the Palestinian Authority, and there will be little progress toward peace.

Abu Mazen, as President Abbas is known, is ready for a two state solution, and Salam Fayad is ready to govern. These men are partners for peace. But there are still some significant questions that need answers: Can we help them build the structures upon which both a Final Status agreement, and a just and lasting peace can be built? Can we help them to help themselves? And are they ready to help themselves?

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