MYTH

"The Palestinian Authority is bankrupt and the people are starving because the world does not care about the plight of the Palestinians."

FACT

Just as Palestinian refugees have been international wards for decades, and received disproportionate amounts of assistance from around the world, the Palestinians living inside the Palestinian Authority have also been given far greater international financial support than most other suffering peoples. By the end of 2001, the Palestinians had received $4 billion (the figure is now closer to $5 billion) since Oslo. This is the equivalent of $1,330 per Palestinian. By comparison, the Marshall Plan to rebuild Europe after World War II provided $272 per European (in today's dollars).

The violent uprising and terrorism have led to an increase in support for the Palestinians. In 1999, international donors provided $482 million, but that figure jumped to $929 million in 2001.

These figures do not include the billions of dollars in assets the Palestine Liberation Organization is believed to have accumulated over the years through drug trafficking, illegal arms dealing, money laundering, fraud, extortion, and legal investments.

No one debates that the economic situation in the PA is difficult, but the Palestinians are hardly the only people suffering in the world. In fact, people in many countries are much poorer than the Palestinians. Ethiopia, for example, receives about the same amount of aid as the PA, but has a population 20 times larger. Even other Arabs are in worse shape than the Palestinians, and yet they receive little or no foreign aid. In 2000, per capita income of a West Bank Palestinian was actually higher than that of Arabs in middle-income countries such as Algeria or Egypt, and much higher than that in Morocco or Syria. In 2000, per capita aid to the Palestinian was $214, by far the highest in the world, with Bosnia a distant second at $185. Even after taking into account the decline in Palestinian incomes in the last two years, they would still be considered lower middle class among the Arabs (Jerusalem Post, August 9, 2002).

The problem for the Palestinian Authority is not a lack of funds, but a lack of accountability. Instead of going to feed, house, and employ Palestinians, significant amounts of aid have been siphoned off by Yasser Arafat and other PA officials. One need only ask why refugee camps continue to exist within the PA. With $4 billion, shouldn't the PA have been able to build at least one house for a refugee family?

In 1996, $326 million disappeared from the PA and the Palestinian Legislative Council established a commission to investigate the loss. The subsequent report concluded that nearly 40 percent of the PA's $800 million budget had been lost through corruption and mismanagement. The PA's comptroller wrote: "The overall picture is one of a Mafia-style government, where the main point of being in public office is to get rich quick" (Rachel Ehrenfeld, "And a Thief, Too-Yasser Arafat takes what he likes," National Review, July 29, 2002).

In 2000, Arab countries pledged $1 billion to help the PA, but stipulated that "Chairman Arafat show complete transparency in the funds." Arafat refused, and the Arab leaders withheld the funding "for fear that the money will end up in the wrong pockets." And for good reason. On June 5, 2002, the Kuwaiti daily Al-Watan published documents showing that Arafat had deposited $5.1 million from Arab aid funds into his personal account to support his wife and daughter who live in Paris and Switzerland.

Despite their concerns, since April 2001 Arab governments have transferred $45 million each month to the PA, and the European Union has contributed another $10 million monthly.

The problems facing the Palestinian people and the PA economy are not due to a lack of funding or international concern, they are a direct result of the corruption and the lack of accountability of the PA, and the use of donated funds for terrorism and other purposes not intended by the donors