Commentary Magazine


Topic: American foreign aid

Fayyad and the Failure of U.S. Foreign Aid

The departure of Salam Fayyad from the Palestinian government presents an easy trap for outside observers to fall into: because nothing much will change once he’s gone, it will be assumed that nothing much would have changed had he stayed. That may be true, but American officials would be gravely mistaken to believe it was inevitable.

In truth, the great tragedy of “Fayyadism”–technocratic reform and the building of functional state institutions–is not that it failed but that it never existed. As Nathan Brown wrote for his report on Fayyadism for the Carnegie Endowment, state building under Fayyad was a mirage. Brown’s report has been widely cited ever since, but it’s worth pointing out the part of Brown’s diagnosis that was so widely ignored in favor of blaming only Israel or PA factional politics. Brown wrote:

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The departure of Salam Fayyad from the Palestinian government presents an easy trap for outside observers to fall into: because nothing much will change once he’s gone, it will be assumed that nothing much would have changed had he stayed. That may be true, but American officials would be gravely mistaken to believe it was inevitable.

In truth, the great tragedy of “Fayyadism”–technocratic reform and the building of functional state institutions–is not that it failed but that it never existed. As Nathan Brown wrote for his report on Fayyadism for the Carnegie Endowment, state building under Fayyad was a mirage. Brown’s report has been widely cited ever since, but it’s worth pointing out the part of Brown’s diagnosis that was so widely ignored in favor of blaming only Israel or PA factional politics. Brown wrote:

The focus on Fayyad’s personal virtues has obscured a series of unhealthy political developments and mistakes honest administration for sound politics. The entire program is based not simply on de-emphasizing or postponing democracy and human rights but on actively denying them for the present. The effect of this approach—taken perhaps more out of necessity than conviction—is not merely troubling but also deeply debilitating and self-defeating.

A functional Palestinian state that will accept a two-state solution, as Jonathan wrote yesterday, cannot be created through the will and declaration of a despot. The Palestinians must create a state before they can have a state. But as Brown’s report makes clear, the lack of any democratic character will impede the process of state building so effectively as to make it futile. Brown conceded that Fayyad has been able to manage the institutions currently in place since the reign of Arafat, but “he has done so in an authoritarian context that robs the results of domestic legitimacy.” Fayyad, therefore, isn’t blameless in his unpopularity.

But someone like Fayyad, who is less corrupt and much more supportive of peaceful measures than the clowns to the left of him and the jokers to his right, is still far preferable to any alternatives. Which raises the question: what is the American role in all this? The U.S. gives hundreds of millions of dollars a year to the Palestinian government, yet the institutions don’t get built, and the Palestinian government gets no more democratic from year to year. (If anything, the opposite happens, since every year that passes puts Mahmoud Abbas one year further from when his term legally ended.)

The answer is not to de-fund the Palestinian Authority, since that would only empower Hamas in the West Bank. It turns out there are some very good strings attached to U.S. aid to the PA–but not nearly enough. According to the Congressional Research Service:

USAID’s West Bank and Gaza program is subject to a specialized vetting process (for non-U.S. organizations) and to yearly audits intended to ensure that funds are not diverted to Hamas or other organizations classified as terrorist groups by the U.S. government. This vetting process has become more rigorous in recent years in response to allegations that U.S. economic assistance was indirectly supporting Palestinian terrorist groups, and following an internal audit in which USAID concluded it could not “reasonably ensure” that its money would not wind up in terrorist hands.

This is important, and hopefully it has been successful. Vetting the money for security purposes, however, is necessary to the aid process–but not sufficient. Back to that Congressional Research Service report:

In assessing whether U.S. aid to the Palestinians since the June 2007 West Bank/Fatah-Gaza Strip/Hamas split has advanced U.S. interests, Congress could evaluate how successful aid has been in

• reducing the threat of terrorism;

• inclining Palestinians towards peace with Israel;

• preparing Palestinians for self-reliance in security, political, and economic matters;

• promoting regional stability; and

• meeting humanitarian needs.

The CRS lists five categories for judging the success of aid to the PA; the first passes the test–terrorism from the West Bank is down, though how much of that is because of American aid is certainly debatable, to say the least. But even if we grant that, the other four are clear failures. By the CRS’s metrics, only anti-terrorism funds have been useful; everything else has been a waste.

That’s just not good enough. And it’s representative of a broader failure in the region. The Washington Free Beacon reports on a prominent Egyptian opposition blogger who briefed the press before meeting with State Department officials in Washington. American aid to the Islamist regime of Mohamed Morsi is enabling torture, repression, and state violence. The blogger offered a piece of advice for American financial support to Egypt: “Make it conditional on political reform. At least do something good with it.”

That should be a new working motto for the organizations tasked with distributing American foreign aid. Fayyad has been in office for nearly six years, and those six years–along with billions of dollars–have been mostly wasted. Fayyad’s resignation should be a wake-up call to the U.S., as should Morsi’s violent consolidation of power. The failure of the current American foreign aid strategy in the Middle East cannot be plausibly denied, nor harmlessly ignored.

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