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Money Alone Won’t Bail Out the West Bank

As I noted yesterday, Palestinian Authority President Mahmoud Abbas is on the road this week attempting to persuade Arab countries to give him money. Unfortunately for Abbas, his upgrade at the United Nations last month hasn’t made his panhandling act any more popular with those who voted to upgrade his status at the world body. In fact, the Palestinian Authority is broke. Though this isn’t the first time the PA has had cash flow problems, the current shortage is especially acute and enough to provoke a stern editorial from the New York Times blaming the problem primarily on Israel. But while Israel has withheld some tax revenue from Abbas, the problem in the West Bank goes a lot deeper than the current dispute between the Netanyahu government and the PA.

The Times is right that it is in no one’s interest that the PA collapse, but its call for more money from Israel, the United States, the Arab world and the international community to be poured into Abbas’s coffers misses the point about what is going on in the West Bank. No amount of foreign aid can fix a government and a society that is completely dysfunctional. The issue of the PA’s insolvency is directed related to its steadfast refusal to make peace. Though a Palestinian government that isn’t a basket case is needed to make a two-state solution to the Middle East conflict work, the issue here isn’t just that the PA is corrupt and incompetent. It is corrupt and incompetent in large measure because the political culture of Palestinian society is still more interested in perpetuating the conflict with Israel than in building a state.

Though the Arab and Muslim states that profess to support the Palestinians have done little to help them, throughout the nearly 20 years of its existence, the PA has been the recipient of vast sums of aid from Israel, the United States and the international community. For the most part, this money has been either stolen or wasted. The portion of it that did filter its way down to the Palestinian public was often spent on backing terrorist groups or on a vast scheme of public employment. That did little to develop the economy of the West Bank but it did serve to solidify the loyalty of those getting no-show or no-work jobs to first Yasir Arafat and then his successor Abbas.

In recent years, as the Times notes, there has been an effort by PA Prime Minister Salam Fayyad to actually serve his people and to foster development as well as good government. The problem is that as much as the Americans and Israelis would like to help Fayyad, his efforts are still the exception to the rule. The unpopular Fayyad has little real influence over the PA’s future. He will also be sidelined if the Fatah-Hamas merger ever is brought to fruition.

More importantly, the failure of the West Bank economy is due to the refusal of Abbas to talk or make peace with Israel. Had he done so in 2008 when Ehud Olmert offered him statehood, things would be very different today. That is also true of Arafat’s refusal of Ehud Barak’s peace offers in 2000 and 2001. The second intifada that he launched ruined the West Bank’s economy.

The plain truth is that there is no assurance that the money that the United States, Israel or the Europeans are asked to hand over to Abbas will do anything more than prop up a failed regime. It may be that subsidizing failure is a better alternative than the chaos that would ensue if the PA completely collapsed, but it is not the answer to the problem.

What the PA really needs is not so much a handout as a sea change in its culture that would allow Abbas or a successor to end the conflict and to start the business of building a stable society that is not obsessed with violence against Israel. So long as that doesn’t happen, the Palestinians will continue to be beggars and the Israeli public will never support a withdrawal that might lead to the West Bank becoming a terrorist launching pad the way Gaza has become since 2005.

The PA’s bankruptcy is as much moral as it is financial. Until the Palestinians and those like the Times who want to help them realize this, aid to them will continue to be a case of throwing more money down the rabbit hole.