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Palestinians Ponder American Aid Cut: Devastating, But We Will Survive

Analysts argue end of USAID violates U.S. commitment and damages frail economy

Washington’s striking of some $300 million annually in aid to the Palestinian Authority (PA) constitutes a severe blow to its already-stressed $1.2 billion budget, but senior PA officials insist that the loss of American largesse, while patently “immoral,” will not cripple its ability to operate.

“The complete cut of the American aid money won’t end the Palestinian economic cycle,” Azmi Abd al-Rahaman, spokesman for the Palestinian Ministry of Economy, assured The Media Line. He explained that while there would be a negative impact on the economy, the U.S. will also pay a price in terms of lost respect. “Most of the American aid-money goes towards humanitarian aspects; thereafter, cutting these amounts is considered inhumane.”

Al-Rahman stressed that because Palestine has been suffering under occupation for years, all of the aid-money that comes from donor nations is not a pittance, but required and needed to build its economy as a developing country.

“Most of the international economic agreements in regard to the Palestinian economy were signed in the presence of the United States and with its approval,” Al-Rahman explained. He charged that because the American aid-money is very important and basic to the Palestinian economy, cutting it is illegal and immoral.

“Ninety per-cent of our economic resources are controlled by Israel, as well as the land, air and sea crossing-points,” he explained. So according to al-Rahman the Palestinian economy does need help, which is leading the PA to approach Arab countries to fill the gap, secure the economy “and embarrass the U.S.”

Previously, out of concern for issues of corruption and misuse of funds, U.S. policy shifted to provide aid directly to specific projects rather than through the PA treasury. Most of the recipients were development projects carried out by the United States Agency for International Development (USAID) which is closing.

The loss of USAID projects in the West Bank and Gaza Strip translates into three main areas: Governance and Civic Engagement – where its partnership with the PA helped improve municipal services and strengthen the institutional capacities of 72 municipalities – Human Capital and Social Impact; and Economic Growth and Infrastructure.

In the educational sphere, since 2000, USAID has reduced class sizes by constructing nearly 3,000 classrooms and training 4,300 teachers and principals resulting in increased student performance according to academic assessments. Moreover, its investments in the health fields have helped benefit 274 medical facilities with more personnel.

During the past five years, USAID has leveraged $86 million in private sector investments to scale up and improve the quality of business services and production, and fostered Palestinian partnerships with over a dozen U.S. companies. USAID investments have also improved access to clean water for more than 1.4 million Palestinians; installed 1,360 kilometers of water pipelines; built or renovated 53 water reservoirs; drilled or renovated 33 wells; and connected 140,000 Palestinians to running water for the first time.

A number of those responsible for the USAID projects have expressed regret that, “We’re leaving so many things unfinished and not following through with the commitments we made to our stakeholders,” according to “Ally,” a former USAID project employee, who asked The Media Line to withhold her full name because she is not authorized to speak to the media. She explained that originally the project she used to work on, which started two years ago, was supposed to end in September 2019, but they have now been informed that all technical aspects have to be shut down by January 31.

“This puts a lot of pressure on us to get as much done as we can in an incredibly short period of time,” explaining that, “Not only does [the premature shut-down] impact the legacy that USAID and implementing partner organizations will leave behind in Palestine, but it could also have very detrimental effects on the sectors in which these projects worked, and by extension, the Palestinian people.”

Palestinian-American relations have been tense since December 2017, when the PA imposed a diplomatic boycott on the American administration—protesting its recognition of Jerusalem as Israel’s capital—a move many Palestinians regard as “unfair” toward their cause. Since last year, the American administration had ceased sending aid money to the PA, except for funds allocated toward security projects and programs.

“The American administration in the era of Trump moved from finding a solution to the Palestinian-Israeli conflict to forcing the Israeli solution on the Palestinians,” Palestinian political analyst Hani al-Masri told The Media Line.

He clarified that the latest decision comes as part of planned steps intended to end the Palestinian cause.
“I believe they are pressuring the PA to a limit that they will accept or at least negotiate the ‘deal-of-the-century,’ rather than just refuse the unrevealed plan,” al-Masri concluded.

“Previously, international resolutions were the reference for negotiations, despite the fact that Israel has never fully committed to them. Nowadays, we have no base or reference, [other than] Israel’s best interests—and the Israelis want everything!”