Palestinian Studies

2014 Workshop

Alaa Tartir

PhD Candidate, London School of Economics; Director of al-Shabaka

Failing Aid: Towards A Viable Resistance Economy Model

In the post-Arafat era, dramatic changes took place in the Palestinian polity and system of governance. These transformations have created a new style of governance and state-building in the West Bank which can be called, Fayyadism. This home-grown even though it is externally funded and sponsored new style of governance has been deeply influenced by donor’s prescriptions and funds. It is aimed at establishing a Weberian style of monopoly of violence in the security sphere and a Post-Washington Consensus neo-liberal agenda in the economic sphere; as the two fundamental pillars for the future Palestinian state despite the existence of the Israeli military occupation and the intra-Palestinian fragmentation. Therefore, the donor community; their funds and the attached politicized conditionality; and the rules of the game that they are dictating since the establishment of the Palestinian Authority, remain key features of the political economy of the Occupied Palestinian Territory (OPT). They are indeed an integral actors and factors in the entrenchment of the process of de-development and arguably the Israeli military occupation. Over the past twenty years, the donor community has invested more than $23 billion into 'peace and development’ in the OPT, making Palestinians one of the highest per capita recipients of non-military aid in the world. However, aid has not brought peace, development, or security for the Palestinian people, let alone justice.

This paper argues that there is broad agreement that aid has failed the Palestinian people; however there is disagreement as to why aid has failed. To better understand this failure of aid, this paper categorizes the scholarly work on aid in the OPT into four schools of thought. One group can be termed “instrumentalist” and argues that the fundamentals of the World Bank’s model “An Investment in Peace” are sound and the model should be maintained but simply needs to be better applied. This group tends to sanitize the Israeli occupation and the settler colonial nature of the Israeli state. It ignores Israel’s remarkably consistent policies towards Palestinian land and people and lays a disproportionate amount of blame on the PA for the failure of aid to achieve results. A second group, the “critical instrumentalists,” does focus on the occupation as the main obstacle to peace and development. However, they share the instrumentalist faith in the ability of policy to bring about positive change. The third group consists of critics of the Oslo aid model and assert that the aid model is itself a part of the occupation, because it is designed in a way that subverts Palestinian development while reinforcing and subsidizing the Israeli occupation. For critics, development is not policy to be implemented, but domination to be resisted. Finally, a fourth group not often considered when analysing the impact of aid: The neo-colonialists, who consider aspects of foreign aid to have been a success. Particularly in the West Bank, Palestinian resistance to the Israeli occupation has largely been mollified and Israel’s policy aims have largely been achieved. They are advocating an approach to aid that provides economic incentives to Palestinians in return for their giving up rights.

With this record of aid’s failure; the global crisis of the neoliberal model; the crisis of the Fayyadist neoliberal agenda in the OPT; and in the wake of the Arab uprisings in 2011, this paper investigates whether past patterns in donor aid in the OPT have undergone any changes in the wake of the Arab uprisings? Through examining donor operations, priorities and the ‘aid-for-peace’ agenda in the OPT in the era of the Arab uprisings, and by building on 30 original semi-structured interviews conducted with actors in the aid industry in the OPT, this paper argues that international donors are not only failing to move beyond the 1993 “Investment in Peace” framework laid out by the World Bank within the Oslo Peace Process, but that those donors are reinforcing failed past patterns associated with the “peace dividends” model while making only cosmetic changes to their engagement. Fundamentally, it will be argued that donors do not appear ready to change an approach dominated by policy instrumentalists that emphasises pre-determined normative values instead of results, all while quietly trading to Palestinians economic benefits in return for their surrendering political rights. Meanwhile, a growing chorus of aid critics remain left on the side-lines with little influence over policy models that remain consistent with two prior decades of failure to produce either peace or economic growth.

With the crisis of Fayyadism, the aid industry, and the Oslo’s economic framework, this paper aims to provide elements for an alternative framework that proposes the resistance and steadfastness economy as an alternative strategy to the neoliberal model adopted by the PA since its establishment, and as approach to challenge the status of dependency on international aid. This paper defines the resistance economy as a model that understands the development process as a cumulative, complementary, economic, social and political one that fundamentally seeks to liberate human beings from dependency and humiliation. It sets out to emancipate human beings by freeing them from poverty, inequality, fear and oppression, empowering them to cultivate their lands, and expanding their options, capabilities and potentials to ensure their happiness. This socially-inclusive model rejects the economic unity with the colonizing power, resists the attempts to sustain the status of asymmetric containment, and working towards dismantling the regimes of oppression and repression. In conclusion and at the operational level, this paper argues that there are few prerequisites to ensure the viability of the resistance economy model that include the need to reinvent the aid industry; redefine development; utilize endogenous approaches; resist the Israeli matrix of control; and resist and challenge any form of Palestinian authoritarianism. Thinking of the future options for the Palestinian national movement requires an economic model and vision for an economy that sits at the heart of the Palestinian struggle for freedom and liberation.

Alaa Tartir is the program director of Al-Shabaka: The Palestinian Policy Network and a PhD candiate and researcher in international development studies and political economy at the Department of International Development, at the London School of Economics and Political Science, LSE. Alaa is also a research fellow of the Ramallah-based Palestine Economic Policy Research Institute (MAS) and Bisan Center for Research and Development, and a fellow of The Palestinian American Research Center (PARC).