On March 3, 2006, Marc Otte, Patrick Clawson, and David Makovsky addressed The Washington Institute's Special Policy Forum. Ambassador Otte is the European Union's special representative for the Middle East peace process. Dr. Clawson, The Washington Institute's deputy director for research, is author with Zoe Danon Gedal of the Institute monograph Dollars and Diplomacy: The Impact of U.S. Economic Initiatives on Arab-Israeli Negotiations. Mr. Makovsky is a senior fellow and director of the Project on the Middle East Peace Process at The Washington Institute. The following is a rapporteur's summary of their remarks.
Marc Otte
Hamas's surprise victory presents the European Union (EU) with a new and unfamiliar situation. While Israel and the international community have agreed in principle that humanitarian assistance to the Palestinians should continue, there are still differences over what this entails. The EU defines humanitarian aid as assistance provided in the case of an emergency, which includes food, water, basic sanitation, medicine, and limited reconstruction. In addition to achieving a common understanding of what is meant by humanitarian aid, donors must figure out how to best disburse this aid given a Hamas government. To avoid aid money going through Palestinian Authority (PA) agencies, as most EU aid currently does, new structures must be developed. The donor community, especially the United States and European nations, must develop these means in coordination with Israel while maintaining internal cohesion among the Quartet.
In addition to the logistics of disbursement, the aid community must determine the results it hopes to achieve through its aid choices, whether it is to force a quick collapse of the Hamas government or show Palestinians voters that they erred during the elections. However, the international community must proceed carefully; it is not a given that the PA, which has shown extraordinary resilience in the past, will collapse when pressed or that it is in Israel or the region's security interests that the PA do so.
Decisions on the PA must also be viewed in the larger regional perspective, which includes issues concerning Iran, the cartoon controversy, and democratization. In Saudi Arabia and the Gulf countries, the Palestinian issue is at the bottom of their strategic priorities. The United States and the EU should engage Arab nations in a more constructive dialogue even though at the moment their attention may be more fully on Iran than the Palestinians. In particular, the West must face the accusation that it has a double standard for democracy. As witnessed in the Palestinian elections, there is no real alternative secular third-way party in the Middle East to contest the Islamists.
Patrick Clawson
Since Hamas's election victory in January, the international community has suggested using aid to pressure Hamas into moderating its stance on Israel and reversing its commitment to violence. However, this method will be difficult to apply to the PA. Though the PA currently relies on significant budget support, it has numerous ways to decrease this dependency. Last year the IMF outlined ways by which the PA could cut its expenditures by $20 million per month. For example, it could cut the salaries of some of the security personnel who do not actually exist, or it could generate additional revenue by collecting electricity bills that now are rarely paid.
Even in the absence of fiscal reform, the PA will likely still receive aid from Arab countries. Russia's insistence on continuing military aid to the PA sends the message to Arab donors that they can ignore Western efforts to create a coordinated assistance policy. There is also a troubling trend to reclassify all aid as humanitarian, which it is then argued should not be cut.
While it has been the longstanding practice of the international community to use aid as political leverage and an incentive for economic reform, the suggestion that this method be used with the Palestinians has met with resistance in the donor community. In a recent letter, Quartet envoy James Wolfensohn exhorted Israel not to cut off customs transfers to the PA because of the negative impact that may have on the Palestinian economy and Israeli security. In other words, he suggested continuing financial flows to the PA regardless of the government in power. Wolfensohn also suggested that Israel start to pay the fuel bills of the Israeli company that ships $40 million a month in fuel to the Palestinians, in addition to the $20 to $30 million a month in electricity and water bills they already pay, in order to prevent a humanitarian crisis. If Israel follows this course it would be giving PA fuel for free, which the PA would in turn sell to Palestinians and generate sufficient revenue to pay the bloated salaries of its security personnel.
Last year, international aid to the West Bank and Gaza was $340 per capita. If the international community follows Wolfhenson's suggestions, aid will increase this year to $500 per capita, 40 percent of the Palestinian income. Not only is this economically unsustainable, but, given that the 2.3 billion other people living in low income countries only receive an average of $21 per capita, it is also morally indefensible. The people dying of starvation in an Arab land are mostly in Darfur, not Gaza.
David Makovsky
Hamas's January election triumph is the greatest victory for the Muslim Brotherhood since the late 1920s and threatens to radicalize not only the West Bank and Gaza, but also Muslim countries such as Jordan -- and one cannot exclude the possible impact on Israel's Arab minority. While many Palestinian voters chose Hamas as a form of protest, the fact remains that they empowered and legitimized the most militant segments of Palestinian society. The donor community must decide how Hamas's victory will affect aid, especially after the upcoming Israeli elections. Additionally, the donor community must figure out how to contain Hamas without bringing a collapse of the PA, a situation Israel is hoping to avoid in order to pursue civilian disengagement from parts of the West Bank.
While the international community can respect Palestinian democracy, it cannot remain indifferent to Palestinians' choices. Hamas must be forced to make hard decisions. They may try and fail as they did in Qalqilya, a Hamas led municipality where Fatah candidates won the legislative elections because the residents were unhappy with Hamas leadership. Some subscribe to the school of thought that it is not what Hamas says that is important but rather its actions, but Hamas's ideology is still crucial. Recognizing Hamas undermines Palestinian moderates who for years have defended a two state solution. If Hamas wins international recognition right away, then it would have gained a legitimacy that will be hard to revoke when Hamas's actions prove problematic. Furthermore, when it comes to actions, Hamas may keep the calm that it has maintained over the past year to consolidate its victory, but it is unlikely that Hamas will seriously go after other militant groups such as Palestinian Islamic Jihad and the al-Aqsa Martyrs Brigades or work against attacks by such groups. In addition, Hamas is likely to indoctrinate a new generation of Palestinians through its control of the school system.
The international community must be creative in distributing humanitarian aid. Money should be used not only to support non-Hamas reformers committed to a two state solution, but also to enable democratic mechanisms such as the Central Elections Committee to remain functioning in order to hold future elections. Despite all the obvious difficulties, the international community should also consider setting up an alternative, secular school system to counter Hamas. It remains to be seen whether Mahmoud Abbas will live up to his demand that Hamas honor previous agreements and allow presidential control over the security forces. There are signs he is yielding on security. Only if he upholds his own criteria should the international community consider using him as a channel for some international aid.
This rapporteur's summary was prepared by Elizabeth Young.
Policy #1084
