Afternoon Tea in Jerusalem Blog

In addition to my work as a business coach, one of my interests is blogging about life in Israel. This is a country full of contrasts – over eight million citizens living in an area the size of Wales. You can see snow and the lowest place on the globe in the same day. Although surrounded by geopolitical extremes, Israel has achieved a decade of high economic growth. My work brings me in contact with an array of new companies, exciting technologies and dynamic characters. Sitting back with a relaxing cup of strong tea (with milk), you realise just how much there is to appreciate in the Holyland. Large or small operations, private sector or non profit, my clients provide experiences from which others can learn and benefit.

As declared this year in the British Parliament on February 9th:

The Department for International Development (DfID) provided £349 million in support of Palestinian development from 2011-15 and will provide a further £72 million in 2015-16, of which up to £25.5 million will be provided to the Palestinian Authority. This year, UK aid will support 36,000 children in primary education and support 270 enterprises to improve their annual sales or productivity.

What is the equivalent of such sums for the British taxpayer? Well a £349 million injection would wipe off the debts of the NHS trusts in England. Very useful, if you could get hold of it.

On 30th March, it was further announced that:

As part of this support, between 2011 and 2015, DFID provided over £3 million to the Facility for New Market Development Programme and Palestinian Market Development Programme, which has helped businesses expand into new markets and products, and supported the creation of over 2800 new jobs. DFID also provided £2 million to the UN Relief and Works Agency’s which supported the creation of over 45,000 short-term jobs for Palestinians in Gaza who have been affected by movement and access restrictions.

In this case, the numbers do not appear to be consistent. Could £3 million over 4 years really help to create 2,800 jobs? That works out at about £1,000 pounds per job. Maybe. However, £2 million to support 45,000 short term jobs? That is £45 per position. No way!

So what is the fascination with the UK and its apparent need to give to the Palestinians in such generous and unlimited quantities?

Yes, there is deep poverty in parts of the West Bank and in Gaza. It is generally accepted that until that the economic despair is resolved, it remains a potential cause for renewed conflict with Israel. And some believe that it is the duty of Europeans to redress the imbalance caused by America’s massive military aid to Israel.

Even if that baseline remains unchallenged, there are two questions that dominate the debate about the size of the contributions just described. (And these sums do not include support for NGOs and the massive funding via the EU). First, the Palestinians have consistently received what has previously been described by the World Bank as the largest amount of money per capita in the history of foreign aid”. So why do they keep demanding so much more? Second, where does the money go? Who benefits?

It is the latter issue that has so concerned me over the years. For example, the recent scandal of the ‘Panama papers’ revealed cited at least two Palestinians, who you would have hoped would not appear.

  • The son of President Abbas, Tareq, and his “holding company worth more than $1 million in the British Virgin Islands”.
  • Muhamed Mustafa, former deputy PM and now head of the powerful Palestine Investment Fund.

A smell of possible kleptocracy? Ironically, around the same time of the leaking of the Panama documents, the Daily Mail newspaper released an expose, which detailed how UK taxation was funding Palestinian terrorists. The item was so intense that it drew an official government response. In fact, much of the denial was forced to focus on the issue of the Palestinians.

Since then, there have been several questions in both of the Houses of Parliament as to what steps Her Majesty’s Government “are taking to ensure that UK aid to Palestine is not given, directly or indirectly, to the families of suicide bombers or to convicted prisoners.” And the answer is often that:

UK aid to the Palestinian Authority (PA) is subject to rigorous scrutiny, with safeguards in place to ensure its being used for proper development purposes. Our financial assistance to the PA is used to pay the salaries of civil servant and pensioners. Our support is provided through a multi-donor trust fund administered by the World Bank, which carries out close monitoring of PA expenditure. Only named civil servants from a pre-approved EU list are eligible, and the vetting process ensures that our funds do not benefit terrorist groups. The process is subject to independent auditing.

But no lists are provided. The independent auditor is not revealed. Even the EU auditors determined back in December 2013 that its own ‘independent’ system by the name of Pegase “needed to be strengthened”.

Significantly, on April 15th, the government conceded that “UK officials meet regularly with the (Palestinian) Ministry of Finance and consistently lobby it at the highest levels on whether prisoner payments can be made more transparent and affordable.” George Orwell would feel vindicated with this double talk.

But what is staggering is that these so-called Palestinian civil servants undoubtedly include the full gamut of the Palestinian security sector – police, the army, Presidential Guard and a vast array of secret forces. All have been linked to terror in the past. And many are on the pay role of Hamas in Gaza, whose is persona non grata throughout Europe, America and elsewhere. In other words, the UK is supporting the very people who are destroying the purpose of what the funds are set aside for – peace and a better society for all.

Where could the funds go instead? Well there is no point in directing them towards UNRWA. Nominally part of the UN, this is probably the largest charity in the world, yet it has no external audit. Words such as transparency and accountability are seemingly irrelevant to its operations.

Disturbingly, on February 10th, there was an admission that there is no direct UK funding of joint Israeli-Palestinian programmes. However, through the Conflict Stability and Security Fund (CSSF), the UK provides a meager £40,000 for the ‘Youth Creating Peace On/Line’ project which encourages educational cooperation between Palestinians and Israelis.

So how about investing resources in key infrastructure projects? And then I hit on this report, albeit from the European Union in Brussels on April 21st.

The Palestinian Authority (PA) awarded in 1999 a 25-year exploration license for the marine area off the Gaza Strip (called Gaza Marine) to a consortium of the BG Group (British multinational oil and gas company) for 90% and the Consolidated Contractors Company (CCC) for 10%. The BG Group, which discovered the Gaza Marine field about 36 kilometres offshore in 2000, has recently merged with Shell. The field has not been developed to date.

And there you have it. In the blue corner, Israel develops its offshore gas resources, thus strengthening its financial base. In the red corner, Hamas ignores a ‘brave new world and cries ‘poverty’. In turn, it receives billions in international handouts and thus develops its ‘tunnel economy’. This fosters exports in the form of terrorists sent to attack Israeli civilians.

Arnold Roth is a well-known blogger on the theme of financial transparency. He has been invited to speak at Parliaments around the globe. He wrote recently that it is an outrage that no professional resources have been devoted to discovering where all this money has disappeared to. And he continues:

The Europeans and the Brits can say what they like about everything being checked and no possible room for malfeasance. But that’s not what the PA says to its own people. The message from the Abbas insiders for internal consumption is that, as bankrupt as their regime is, there will always be money for those “heroic” Palestinian Arab convicted slaughterers of children and of Holocaust survivors.

In that light, you have to ask if the thousand or so tunnel diggers are also considered civil servants as per the list held by the UK government. Similarly, if Hamas is able to devote resources to renewing its tunnel war against Israel, why is the UN surprised that around 75,000 houses in Gaza have yet to be rebuilt? Maybe the leaders of Hamas should direct some of their profits from the foreign currency monopoly or real estate transactions towards helping their own citizens?

And if they did? Hundred of thousands of Palestinians would be better off. And decent taxpayers in the UK might be able to receive greater benefit from their own monies that they have gainfully earned yet have been asked to part with for the ‘greater international good’.

3 comments

  1. Robert Festenstein

    Very well constructed. Recent FOI requests to the UK Government concerning funding to groups in the PA have been met with blank refusal. There is clearly a well orchestrated policy in DFID to prevent all and any information coming out. It really is time that we knew where the money was really going.

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Client Feedback

"Michael transformed the way I think and approach working, and also how to monetize my social media and communal projects."

CEO of digital media company

"Michael helped my high tech company take off."

CEO of clean energy start up

"Michael has been an invaluable resource to me throughout all of the steps of starting up my business."

Art Studio owner

“Working with Michael Horesh is like having root canal treatment, marriage counselling and business coaching all rolled into one, successfully.”

CEO of digital media company
CEO of clean energy start up
Art Studio owner