Understanding Palestinian Poverty

On Sept. 7, Agence France-Presse released an article entitled ‘Most Palestinians live in poverty, on two dollars a day.’ Why are most Palestinians so tragically poor? The AFP reporter turns to a U.N. representative who blames Palestinian poverty on four sources:

Israel’s blockade of the territories, destruction of assets [in Palestinian areas], expansion of Jewish settlements and the separation barrier.

Israel is thereby accused of complete responsibility for the unfortunate state of the Palestinian economy. The AFP report provides no dissenting voices, and Israel is not granted the right of response to any one of these serious allegations.

This article is not merely anti-Israel ? it’s sloppy journalism at its worst.

AFP fails to acknowledge the mounds of evidence that while Israeli anti-terror policies have created some hardships, the primary reason for Palestinian poverty is irresponsible Palestinian leadership, whose embezzlement, diversion of funds to terror, and failure to invest in infrastructure have left the average Palestinian destitute.

HonestReporting encourages subscribers to write to AFP (contact@afp.com), using the documentation below.


Since the signing of the Oslo Accords in 1993, the international community has shown unprecedented generosity toward Palestinians, donating approximately $5 billion to the Palestinian Authority. The World Bank noted recently that ‘donor disbursements to the Palestinians currently amount to approximately $1 billion per year or $310 per person ? one of the highest per capita rates in the history of foreign assistance.’ (By comparison, the Marshall Plan to rebuild Europe after World War II provided $68 per year, in today’s dollars, to Europeans.)

So where’s all the money going? A recent, in-depth study from the independent Funding for Peace Coalition (FPC) found overwhelming evidence that ‘European aid has not reached its intended target ? the Palestinian people. It has been diverted towards graft, terrorism and incitement to hatred.’

While direct PA payments to terror gangs (with Yassir Arafat’s own signature as authorization) have been documented since 2002, the FPC continues to find a ‘compelling connection’ between EU aid and funding of Palestinian terror. Just one point of evidence cited by the FPC: An interview with PA officials and Fatah leaders on the BBC in November 2003 revealed that the PA had reimbursed $50,000 of monthly expenses to one of the deadliest terror groups, the Al-Aksa Martyrs’ Brigades.

So the EU, now the single largest donor to the PA, literally contributes to keeping bands of terrorists on the PA payroll. Precious funds intended to ease Palestinian poverty are used instead for suicide bombs targeting Israeli civilians.


But checks to terrorists are small change compared to Yassir Arafat’s record of personal theft. Over the course of his ‘revolutionary’ career,Arafat has siphoned off hundreds of millions of dollars of international aid money intended to reach the Palestinian people.

Estimates of the degree of Arafat’s wealth differ, but are all staggering. Last year, Forbes magazine listed Arafat in its annual list of the wealthiest ‘Kings, Queens and Despots,’ with a fortune of ‘at least $300 million.’ Israeli and US officials estimate Arafat’s personal holdings between $1-3 billion. Rachel Ehrenfeld, Director of the American Center for Democracy,arrives at a figure of $1.3 billion and laments:

This money is enough to a) feed 3 million Palestinians for 1 year, b) buy 1,000 mobile intensive care units, c) fund 10 hospitals for a decade, and d) would still leave $585 million to fund other social projects.

And while the average Palestinian barely subsists, Arafat’s wife Suha (at left) in Paris receives $100,000 a month from PA sources, as reported on CBS’ 60 Minutes. That CBS report also noted that Arafat maintains secret investments in a Ramallah-based Coca Cola plant, a Tunisian cellphone company, and venture capital funds in the U.S. and the Cayman Islands.

Arafat also uses foreign aid funds to pay off cronies who bolster his autocracy: A recent International Monetary Fund report indicates that upwards of 8% ($135 million) of the PA’s annual budget is handed out by Arafat ‘at his sole discretion.’ The 2003 budget for Arafat’s office, which totaled $734 million, was missing $34 million that Arafat had transferred to pay unidentified ‘organizations’ and ‘individuals.’ And Ehrenfeld notes that this IMF report ‘did not take into account Arafat’s control of 60 percent of the security apparatus budget, which leaves him with at least an additional $360 million per year to spend as he chooses.’


Bringing the Palestinian people out of poverty would require building an infrastructure that is no longer utterly dependent on foreign aid and jobs in Israel. But almost none of the PA budget has been directed to this end. The situation is best summarized by Mohammad Dahlan, former PA Interior Minister, who recently told The Guardian that of all the funds donated t
o the Palestinian Authority, a total of $5 billion ‘have gone down the drain, and we don’t know to where.’

Education is one key to building a robust Palestinian economy. But Palestinian schools and universities are infested with terrorist ideology and incitement. This was the scene (at right) at a West Bank university’s back-to-school day, earlier this week ? huge portraits of terrorist ‘heros’ hovered over students perusing new schoolbooks.

Why doesn’t the PA allow foreign aid to promote a sustainable Palestinian future by removing such incitement and educating toward peace?

Other highly symbolic episodes: When an American convoy traveled to Gaza last year to interview potential Palestinian Fulbright scholars, it was blown up by local terrorists. And as documented by Palestinian Media Watch, $500,000 of USAid funds was used recently to build ‘Martyr Salakh Khalaf Stadium.’ Salakh Khalaf, better known as Abu Iyad, was head of the Black September terrorist organization, and was responsible for the murder of two American diplomats in Sudan in 1973, and the murder of 11 Israeli athletes at the Munich Olympics in 1972.

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Yet Agence France-Presse ignores all of these points, relying instead on one dubious source to blame Palestinian poverty solely upon Israeli strictures. In truth, the primary reason for Palestinian poverty is the criminal failure of the Palestinian leadership to serve its own constituency ? despite massive international aid intended to promote precisely that goal.

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