Overcoming Foreign Dependency: Palestine’s Aid Problem

At a joint White House press conference on 28 January, alongside Israeli Prime Minister Benjamin Netanyahu, U.S. President Donald Trump revealed the long-awaited political framework of his Peace to Prosperity plan: a series of proposals aimed at resolving the ongoing Israeli-Palestinian conflict and fulfilling the Palestinian demand for an independent state. The 180-page document rejects the Palestinian right to return and supports the illegal Israeli settlements in the West Bank. The move has since provoked criticism from the UN, which reaffirmed its commitment to a two-state solution based on pre-1967 borders, and from Palestine National Authority President Mahmoud Abbas, who in response to the plan announced the severing of all ties with Israel and the U.S. Beyond the feasibility of the ambitious proposals, which  include the longest road tunnel in the world, the complete lack of Palestinian involvement in the project illustrates the varied forms of foreign domination that the Occupied Palestinian Territory has historically been subjected to. Since the creation of Israel in 1948, Palestinian dependence on foreign assistance has seen it become the second largest recipient of international aid per capita in the world, yet 29% of the 4.8 million residents continue to live under the poverty line, with 2.4 million living in need of food assistance. The Palestinian experience raises questions about the effectiveness of long-term development aid that often fails to confront institutional limitations that inhibit self-sufficiency, while perpetuating the political and economic power dynamics that facilitate foreign dependency. 

History of Foreign Dependency

Palestinian reliance on international assistance has left the population vulnerable to fluctuating aid programmes that respond to changes in regional and global diplomatic interests. As recently as 2018, the Trump administration announced that it would be ending all contributions to the United Nations Relief and Works Agency for Palestine Refugees (UNRWA), which has provided humanitarian relief in the region since its creation in 1949. This reliance on foreign aid not only leaves the Palestinian population vulnerable to the whims of politicians, but has also resulted in the exertion of political and economic control by outside powers, while little is done to improve institutional structures necessary for self-sufficiency within the occupied Territory. Almost three decades ago, the 1993 Oslo Accords and 1994 Paris Protocols granted  limited administrative responsibility to the Palestinian National Authority (PA) over areas of social policy, a move that appeared to signal a shift towards institutional change. However, as the Israeli government continued to be responsible for collecting VAT import duties on behalf of the Palestinians, they remained in control of 73% of the Territory’s total net revenues. With control over the movement of people, goods, and resources in the region, the reforms only worked to cement Israel’s political and economic dominance.

Institutional Failures

As Israel maintained monetary control, aid contributions also continued to grow, nearly doubling from $424 million in 2000 to $929 million in 2001 alone. The distribution of aid also shifted, and while only 20% was allocated to development programmes, some 58% was sent to the PA. This dependency on foreign aid not only saw the PA detach its interests from the performance of the struggling local economy, but also facilitated disengagement from any practical state building efforts. By 2007, the takeover of the Gaza Strip by Hamas, a group with which the international community refuses contact, only worked to divide the territories further and fracture any future state-building prospects, while the PA continued to be plagued with accusations of corruption, mismanagement, and human rights violations. 

While diplomatic efforts have continuously failed to confront the key issues driving the conflict, international development aid has simultaneously failed to address the lack of key institutional frameworks necessary for an effective, self-sufficient administration. Behind the façade of peace talks and agreements, the PA, while plagued with its own shortcomings, remains subservient to the Israeli government for revenue and for access to the goods and infrastructure necessary for economic development. Even the ‘trade not aid’ initiatives that have sought to overcome dependency have failed to implement any meaningful reforms. In 2007, the World Bank launched the Palestinian Reform and Development Plan that saw $7.7 billion donated to help integrate the Occupied Territory into the world economy. Despite this plan, low cost labour in the Territory saw it being exploited by Israeli interests, and economic growth continued to slow to 1.3% in 2019, with the World Bank predicting negative growth in 2020 and 2021. 

Empowering Alternatives

While aid continues to be an integral part of life in the Occupied Territory, it has failed to facilitate the structural changes necessary for a viable and sovereign Palestinian state. In response to the long-term limitations and volatility of foreign dependency, Palestinians are seeking empowering alternatives to the current political deadlock and apathy. Crowdsourcing is being used to fund local projects, like Build Palestine, an online platform that connects entrepreneurs to small organisations, with the aim of giving the community the power and right to control its own resources and development. These projects stand as symbols of hope and opportunity for a people that have long been under the control of external actors.

In the European Joint Strategy in Support of Palestine, the EU, the single biggest provider of external assistance to the Palestinians, explicitly highlights the role of aid in managing the ongoing conflict, rather than seeking to achieve a lasting and inclusive solution. The Strategy further emphasises that economic recovery can only be sustained with an increase in productive capabilities and a viable economic system which can only be achieved when occupation comes to an end. International actors, especially those such as the EU, who recognise the unsustainability of current humanitarian aid, must find the courage and coordination to prioritise the establishment of legitimate and resilient social, political, and economic institutions within Palestine. In doing so, they would not only ensure Palestinian survival, but finally provide the institutional structures necessary for liberation from dependency on unpredictable and unsustainable foreign development aid. 


Alex Wagner

Alex Wagner is a member of the Defence and Diplomacy policy centre’s working group.



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The Iran Nuclear Deal: The End of the Beginning

Despite signing and ratifying the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) in the late 1960s and early 1970s, Iran was considered a security threat by the international sphere due to suspicion about its development of nuclear weapons. The NPT signatory countries are not willing to allow Iran to develop nuclear weapons due to, primarily, two main reasons. Iran’s close ties with non-state actors Hamas and Hezbollah undermine its international legitimacy. Furthermore, its heated rivalry with regional neighbours Israel and Saudi Arabia and neighbouring threats such as those posed by Afghanistan’s drug trade, the Islamic State (ISIS or ISIL), or Iraq’s instability could drive Iran to use nuclear weapons against them if it had them, or so the international community believes.

However, there is no clear explanation as to what would happen if Iran acquired nuclear weapons. Nuclear alarmists, experts who believe nuclear proliferation is a security threat, believe that if Iran were to acquire nuclear weapons, a nuclear chain reaction would succeed, so Egypt, Saudi Arabia, or Turkey would follow Iran’s steps. In a similar way, they argue that Iran’s access to nuclear weapons would be yet another factor to a global “tipping point” in which nuclear proliferation would spread so quickly that almost any country would acquire them. Moreover, nuclear alarmists deem the second nuclear age (considered to have begun in 1991) to be less predictable, more complex, and therefore more dangerous than the Cold War due to the existing horizontal nuclear proliferation.

On the other hand, others agree that a nuclear Iran would not pose as terrible a threat as some consider. In this sense, Gavin contends that the threat Iran poses as a rogue state was already experienced in the Cold War with the Soviet Union and the People’s Republic of China. Indeed, he believes that an Iran with nuclear weapons would gain international legitimacy and security, thus making it less aggressive than it has been by forcing it to act with great restraint. It is unlikely that Iran would transfer its nuclear stockpile to Hamas or Hezbollah for it would be too scarce and, therefore, too precious to give away so easily.

The nuclear deal between Iran and the P5+1 (United States, United Kingdom, France, Russia, China, and Germany), which was accepted on 16th of January 2016, seems to be a solution to the question. The agreement seeks to limit and control Iran’s nuclear activities, as well as ensuring that no nuclear weapon is developed for any of the aforementioned possible ends. In consequence the United Nations (UN) sanctions on Iran to stop its uranium enrichment and conversion activities are to be lifted. Hence, the deal is supposed to be a stabilising factor to Middle East turmoil for at least its timespan (15 years).

This brings us to the question: is the nuclear deal definite, that is, will the nuclear deal permanently stop Iran from obtaining nuclear weapons? Views differ on the effectiveness of the deal. The Gulf Cooperation Council (GCC) composed of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, while supporting the deal, reflects concern over the lifting of the UN sanctions in the belief that these will allow Iran to expand Shiite influence in the region at the expense of Sunnis. Israel is also concerned over an Iran with no sanctions to limit its foreign policy. As Israeli Prime Minister Binyamin Netanyahu stated, Israel would increase its defence and warned against violation of the agreement.

Previous US secretaries of state Henry Kissinger and George P. Schultz are open to the possibility of a future nuclear Iran given that the deal only temporarily restricts Iran’s facilities and material but does not give them up. They further argue that violating the agreement will be easy and difficult for the international sphere to detect. US allies in the region might conclude that the US has switched nuclear cooperation for the acceptance of Iranian hegemony. Moreover, they believe that the Middle East will not stabilise itself since Sunni states will resist Shiite dominance in the region.

Hence, it is clear that the Iranian nuclear deal should not be regarded as final or ultimate. It is a mere phase during which long-lasting solutions to the question should be found. It is now up to the P5+1 to lead talks with Iran and other key regional actors to find the best solution to stabilise the Middle East in nuclear terms and settle any possible security threats among the states.

A possible future nuclear Iran does not represent a threat to the international society, but it would to regional neighbours such as Israel and Saudi Arabia. Iran’s primary aims in acquiring nuclear weapons are international legitimacy by which it would be able to increase trade relations with the West and Asian countries and security from bordering states and non-state actors that could bring instability to its territory. It would be very unlikely that Iran would supply such weapons to Hamas or Hezbollah for their destructive power, their value, and the possible destruction of the Iranian state are too much of a risk. However, assuming Iran’s rational use of nuclear weapons is a grave mistake, for one cannot completely assume any state to be absolutely rational. Thus, though a nuclear Iran may not pose a serious threat, the international community should be always be wary and prepared to take action in case its activities endanger Middle East security.

In regards to the threat a nuclear Iran represents to key regional actors, the International Atomic Energy Agency (IAEA) responsible for the peaceful use of nuclear technology should implement a strong binding agreement for the transparency of nuclear activities in the Middle East by which all regional actors should adhere to without exception. Such transparency would allow any regional state to know whether one is developing or is very close to developing nuclear weapons. Information would promote peace among such nations, though for such information to be reliable and valuable, strict measures should be applied to avoid corruption or covert activities leading to misinformation. These measures should not gravely restrict a country’s sovereignty, but should indeed carry out their purpose effectively.

Perhaps effective cooperation and honesty, as well as preparation for the worst scenario, may be a further step in the path to Middle East peace and stability.


Mireia Raga Gómez