Temporary Commission May Speed World Bank Palestinian Funding

By Frank Collins

The $2 billion over five years pledged by donor countries to support reconstruction and development in the occupied territories is still in limbo. As reported in the January issue of the Washington Report, the donor countries have made the World Bank responsible for the handling and supervision of the $2 billion in funding. Palestinian representation is to be through a commission to be appointed by the PLO, but with the commission membership subject to the approval of the liaison committee of the donor countries.

The reason for the long delay in starting the World Bank funding is that the first two commissions proposed by the PLO were not acceptable to the donor countries. The first commission, PEDRA, headed by PLO Chairman Yasser Arafat and composed of PLO functionaries, was speedily rejected by the donor countries. A second commission, PECDR (Palestinian Economic Council for Development and Reconstruction), again with Arafat as chairman but with some added technical members, was likewise rejected in mid-December.

It has been widely speculated that the reason that the donor countries preferred the World Bank as intermediary in the handling of the funding, instead of simply funding the PLO directly, was because of doubts regarding the possible handling of funds under the PLO chairman's direct supervision. Thus the two proposed commissions headed by Arafat were rejected.

An Urgent Need

Immediate outside funding is urgently needed in the occupied territories. The closure of the territories, which began last March 31, now is less stringent than it was at first, but it has resulted in the loss of more than 40,000 Palestinian jobs in Israel.

Poverty in the West Bank and Gaza was abysmal even before the closure. World Bank figures for the occupied territories for 1991 cite a per capita monthly income of $146 and an annual GNP of only $2.88 billion for the almost two million Palestinian inhabitants.

Accordingly, $2 billion in aid over five years would greatly improve the economic situation. The delay of the announced Dec. 13 withdrawal of Israeli occupation troops from the Gaza Strip and Jericho, coupled with the delay in World Bank funding, has seriously undermined Palestinian hopes for the betterment of their lives under the Rabin-Arafat agreement.

The disappointment is leading to a rapid loss of Palestinian support for the agreement, as well as for the PLO chairman's leadership. Palestinian flags and photos of Yasser Arafat were displayed on virtually every house and building in Gaza three months ago. During the writer's January visit, only the Palestinian flags remained. Photos now displayed are mostly of Khalil Al Wazir (Abu Jihad), the PLO military commander assassinated by an Israeli hit squad in Tunis in 1988.

In order to accelerate World Bank funding, a new temporary commission was proposed at the end of December, with the concurrence of Yasser Arafat. The members of the proposed temporary commission are Nabil Kassis, Samir Abdullah, Mohammed Shtayeh, Samih Holeileh, and Abdul Rahman Hamad.

The temporary commission would have limited functions. It would winnow through the more than 2,400 project proposals that have been generated by municipalities, UNRWA, UNDP, and Palestinian non-governmental institutions and development planning groups. Oversight and final decisions would be in the hands of Ahmad Quaq' (Abu Ala'), who was to be the general director of PECDR and who is the head of the PLO's economics department. It is understood that Arafat will continue to have veto power over any decisions taken by his deputy.

In the many cases where the projects are to be implemented by UNRWA and UNDP, it will be possible for World Bank funding to go directly to these agencies, bypassing the PLO treasury. It appears that the temporary commission may prove to be an arrangement under which to proceed with funding which is acceptable to the donor countries. In fact, it is likely that the donors will approve funding only under these terms.

Frank Collins is a regular contributor to the Washington Report. This article was written during his most recent visit to the occupied territories.