Paulson pinpoints Palestine's panacea

"This needs to be big enough to make a real difference and get at the heart of the problem" US Treasury Secretary Henry Paulson (Times Online, September 20, 2008).

The threat of a world economic meltdown does wonders in helping concentrate the mind on how to resolve the intractable 130-year-old conflict between Arabs and Jews over a piece of land once called Palestine that today comprises two sovereign States - Jordan and Israel - and two tiny slivers of land that currently belong to no one - the West Bank and Gaza.

It has taken a roller coaster week of unprecedented turmoil, crises and upheaval for governments, their central banks and stock exchanges to realise that unquantified wads of money - not just pocket money - had to be thrown at resolving - and thereby avoiding - a world financial crisis that threatened outcomes last experienced in the Great Depression 80 years ago.

Finding the vast amount required - estimated to eventually exceed US$1 trillion - was not seen as being an option or even negotiable but as an absolute essential to ending the crisis for one simple reason - the alternative of risking a world recession and global shutdown could simply not be countenanced.

United States Treasury Secretary Henry Paulson was the one to successfully deliver this unpleasant - but totally necessary - prognosis.

The unresolved Arab-Jewish conflict with its sinister overtones of possible nuclear war and surging oil prices threatens the health of the very world economies and societies that today only continue to survive because of the Paulson prescription.

Billions of dollars have already been spent during the last 60 years - as a consequence of the war in 1948 between Israel and six invading Arab armies - in perpetuating the only refugee crisis in the world that apparently appears incapable of resolution by resettlement and rehabilitation.

The cash budget for 2008 approved by the General Assembly of the United Nations for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) is a staggering US$541.8 million. Preservation of refugee status - not its elimination - remains a cardinal tenet of its continued and privileged existence.

Since October 2000, UNRWA has launched Emergency Appeals to the donor community to fund the Agency's Emergency Programs in the West Bank and Gaza Strip. From October 2000 until December 2007, the Agency received a total of US$826.6 million in pledges, which was less than two-thirds of the amount requested. In December 2007, UNRWA launched an appeal for US$237.7 million to cover the cost of its emergency activities in 2008. In May 2008 the requirement was revised and increased to US$263.4 million. Against 2008 Appeal UNRWA received US$128.3 million in pledges as of May 31, 2008.

Additionally billions of dollars - US$7 billion pledged in Paris alone in December 2007 - have been spent by the international community since 1993 in a concerted effort to create conditions for a new Arab state to be established between Israel and Jordan, to resettle and rehabilitate there those Arabs made refugees in 1948 and their descendants and to end the state of war between Israel and its Arab adversaries.

This money has been misappropriated, badly spent, poorly directed, irresponsibly controlled and has not had the slightest impact in achieving any of these objectives - which remain as unattainable now as they have for the last 60 years.

The uncertain nature of Iran's current nuclear program, its threats to eliminate Israel and Israel's refusal to become a sacrificial lamb constitute a potent cocktail that could well risk a world nuclear meltdown on a scale that would make this past week's threatened economic meltdown pale into insignificance.