World Bank urges donors to fulfill Gaza reconstruction pledges

AP , Monday 18 Apr 2016

WB also says Israel is withholding millions of dollars owed to the Palestinian Authority

File Photo: A Palestinian boy holds his sister near the ruins of their family's house, which witnesses said was destroyed during the Israeli offensive, in the east of Gaza City September 10, 2014 (Photo: Reuters)

After Israel's war against Gaza in 2014, Arab countries led the way in pledging reconstruction aid to the devastated seaside Israeli-beseiged enclave. But a new report released Monday by the World Bank shows that Qatar, the United Arab Emirates and other Arab donors have delivered only a small fraction of what was promised.

The World Bank released its report a day before a gathering of international donor countries in Brussels, sending the meeting a stark message that donations are well behind the schedule set when pledges were made at an international conference in October 2014.

"Actual disbursements fall short of planned disbursements by around $1.3 billion, and hence, donors are urged to accelerate the disbursement of funds," the report said. If donor funding continues at the current pace, it added, pledges are expected to be complete by mid-2019, some two years behind schedule.

Israel launched the war in July 2014 in what it said was a campaign to halt heavy rocket fire from the territory, which is ruled by the Islamic militant group Hamas. During 50 days of fighting, more than 2,200 Palestinians were killed, over half of them civilians, according to U.N. and Palestinian estimates. Seventy-three people, including six civilians, were killed on the Israeli side.

The fighting also inflicted heavy damage on Gaza, damaging or destroying some 171,000 homes, according to U.N. figures. The Palestinians say 75,000 people remain homeless. Israel says Hamas is responsible for the damage, noting the group used residential neighborhoods for cover as it fired rockets, triggering Israeli retaliation.

At the 2014 conference in Cairo, the international community pledged some $3.51 billion in aid over three years to rebuild Gaza. According to Monday's report, as of the end of March, $1.41 billion has been delivered, compared to $2.71 billion that should have arrived based on the original schedule.

Qatar led the list of donors in 2014, pledging $1 billion. The energy-rich country's foreign minister at the time, Khalid bin Mohammed al-Attiyah, denounced the "international silence" that surrounded Gaza's destruction.

"While the Palestinian people need financial support, they need more political support from the international community," he said at the time.

Yet a year and half later, Qatar has delivered only $152 million, or 15 percent of what was promised, according to the World Bank.

Saudi Arabia, the No. 2 donor, has delivered just over 10 percent of the $500 million it pledged, while the United Arab Emirates has sent just 15 percent of the $200 million it promised and Kuwait has delivered none of the $200 million it pledged. Turkey, one of Hamas' closest allies, has delivered about one-third of the $200 million it pledged.

Officials from Turkey and the Gulf Arab countries were not immediately available for comment.

In contrast, the United States has delivered all of the $277 million it pledged, while the European Union has sent nearly three-quarters of the $348 million it promised, according to the figures. Individual European nations, including Norway, Switzerland, Germany and the U.K. have all sent most or all of the aid they pledged.

The international aid is meant to pass through the internationally recognized Palestinian Authority, bypassing Hamas. Last week, Palestinian Prime Minister Rami Hamdallah urged donor countries to "make good on their pledges" they made at the Cairo Conference. For years, the Palestinians, who rely heavily on donor aid to prop up their self-rule government, have complained that Arab allies have been slow in delivering promised assistance.

Hamas spokesman Sami Abu Zuhri urged donors to fulfill their pledges, warning that ongoing harsh conditions in Gaza could lead to renewed violence.

"Unfortunately, there are broken promises and betrayal from the donor parties in the reconstruction file," he said. "We call on all parties to honor their pledges because the situation in Gaza is catastrophic, and it constitutes a real case of suffocation and prepares the atmosphere for the return of the explosion."

Donor aid is just one component of rescuing the embattled Palestinian economy, and in its report, the World Bank also took aim at Israel.

Monday's report said the Palestinian Authority is losing about $285 million each year under existing economic agreements with Israel. In interim peace deals in the 1990s, Israel agreed to collect taxes on behalf of the Palestinians and transfer the money each month.

The World Bank said some of the arrangements have become outdated, while others have not been fully implemented due to "tax leakages" on trade with Israel and undervaluing Palestinian imports from other countries. It said the losses amount to 2.2 percent of Palestinian economic activity.

The report also said that Israel is holding some $669 million in revenues owed to the Palestinians, mostly pension contributions collected from Palestinians working in Israel and their employers. It said the Palestinian Authority has not yet created a dedicated pension fund for these workers, holding up the money.

It said that an Israeli blockade imposed on Gaza after Hamas seized power in 2007, "continues to weigh on the economy." It also said that Egypt's extended closure of its border crossing with Gaza, the main gateway for people moving in and out of the territory, has "further exacerbated the situation."

*This story was edited by Ahram Online

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