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Palestine: pouring money into a bottomless pit

By David Singer - posted Tuesday, 4 June 2013

US Secretary of State John Kerry at a meeting of the World Economic Forum in Jordan this week proposed investing another four billion dollarsintrying to resolve the 130 years old Jewish-Arab conflict.

Why these billions would succeed - when tens of billions given at previous international aid meetings failed - remains a mystery.

The belief that economic prosperity for the Arabs living in the West Bank will bring a lasting end to the conflict has proved worthless in the past and will continue to do so in the future.


When the international community pledged $7.4 billion dollars at the Paris Donors Conference in December 2007 to achieve the creation of the two state solution by the end of 2008 - my article - "Paris Produces Palestinian Funding Frenzy" - made the following observations:

Creating two separate States for one Arab population living in the territorial boundaries of former Palestine always was an artificial invention that had no basis in history, geography or demography. It was a fiction contrived by the international community at a particular time to solve a particular problem

There are two questions that remain unanswered - when will the international community stop pursuing this fiction and when will they turn off the money tap trying to make it happen

Solutions - other than another Arab State - are possible and achievable.

Pursuing those solutions - and throwing money at them in amounts similar to the Paris pledges - have a far better chance of success than the continued promotion of a 70 years old concept that has well passed its 1967 expiry date

Surely the time is fast approaching for these donors to cut their losses and simply say "enough is enough".

The Paris Conference final communique declared:

The Paris Conference has made evident the high degree of confidence of the international community in President Abbas and PM Fayyad's reform and development programme

Arafat has since then repudiated the Oslo Accords and the Bush Roadmap.

Fayyad is no longer Prime Minister - having left his reform and development programme in tatters as the International Monetary Fund makes clear in its report released in Brussels on 19 March 2013:


the economy has deteriorated markedly and the public finances are on an unsustainable track. Economic growth has weakened, the unemployment rate has increased, and the fiscal position has deteriorated to the point where core government functions have been affected, with ongoing cash rationing eroding public financial management institutions. Unsustainably high fiscal deficits combined with aid shortfalls are resulting in a large buildup of arrears and increased bank borrowing in the context of a slowing economy. Worryingly, with donor aid receding, the government's ability to finance large deficits is becoming more and more circumscribed. Thus, arrears, many with private suppliers, are causing them to become progressively more reluctant to provide the PA with goods and services while also causing distortions in the private sector. Arrears in the form of delayed or partial payment of wages risk social unrest and strikes, while additional recourse to the banks would further increase banking sector vulnerabilities.

Yet just two months after this alarming IMF report - Secretary of State Kerry and the 300 Israeli and Palestinian industrialists and entrepreneurs gathered at the World Economic Forum are still prepared to keep this rapidly sinking fiction afloat - no matter how much it costs.

No doubt they are well intentioned in their desire to see the two state solution concluded between Israel and the PLO - but they completely ignore the following political realities:

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About the Author

David Singer is an Australian Lawyer, a Foundation Member of the International Analyst Network and Convenor of Jordan is Palestine International - an organisation calling for sovereignty of the West Bank and Gaza to be allocated between Israel and Jordan as the two successor States to the Mandate for Palestine. Previous articles written by him can be found at

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All articles by David Singer

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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