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Debate: International funding of Palestinian Authority

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Should the EU, USA and other western donors continue to give money to the Palestinian Authority after Hamas’ January 2006 election victory?

This article is based on a Debatabase entry written by Alastair Endersby. Because this document can be modified by any registered user of this site, its contents should be cited with care.


Background and Context of Debate:

The Palestinian Authority was created through the Oslo peace process of the early 1990s to provide self-government for the Palestinian people in the occupied territories of the West Bank and Gaza. It relies for its financial existence on funding from a range of donors, most importantly the EU (which gave it about $300 million in 2005) and the USA. Since its creation the PA has been dominated by the Fatah movement led by Yasser Arafat, who died in 2004. Widely criticised by many both inside and outside the area for its corruption and lack of control over armed militias, life for many ordinary Palestinians has remained wretched. Fatah’s leaders have declared it in favour of the peace process, against terrorism and in favour of co-existence with a Jewish Israeli state - although many in Israel have doubted both its willingness and its ability to make even its own supporters and their militias respect these commitments. Other Palestinian groups, particularly Hamas and the smaller Islamic Jihad, have continued to reject the peace process and have engaged in terrorism, including suicide bombings within Israel. Hamas grew out of the Muslim Brotherhood, founded in Egypt in 1928 but now influential (although usually repressed) in many other Arab countries. The Muslim Brothers rejected both western colonial dominance and secular nationalist Arab movements, calling for spiritual and political renewal based firmly upon the Koran. Following Israel’s victory in 1967, Sheikh Ahmed Yassin applied these principles in Gaza and built up a range of charities, providing welfare services and education, while also encouraging resistance to Israel. Hamas - the name comes from the initials in Arabic of the Islamic Resistance Movement, and also means “zeal” - was founded at the start of the first Intifada (uprising against Israel) in late 1987. Under its leadership islamist radicals joined the nationalists of Arafat’s Palestinian Liberation Organisation (PLO) in rebellion. Hamas’ charter was adopted in 1988 and calls for the destruction of Israel, declaring that all the land between the Jordan and the Mediterranean should be Muslim. The charter is stongly anti-Semitic in tone and also declares that “There is no solution to the Palestinian problem except by Jihad”. Since 1988 Hamas has continued to provide social services and strongly influence many aspects of life in Gaza, while rejecting the peace process and PLO/Fatah authority. Being against the Oslo accords, it did not participate in the 1996 Palestinian Authority elections. Hamas is listed as a terrorist organisation by both the USA and EU, and its suicide bombings and other attacks have killed hundreds of people, both in the occupied territories and in Israel proper. Israel killed Sheikh Yassin in an airstrike in 2004, and it has targeted and killed other Hamas leaders as part of its anti-terrorism campaign. Since 2000 and the second Intifida it has gained in authority and popularity as Fatah and the PA have become discredited, especially in the (more secular) West Bank where its influence was previously small. Starting with unions, education boards and professional bodies, it began to stand for elections and win a share of power, and this change in policy continued with success in Palestinian local elections in 2005. In elections on January 25th 2006 Hamas won 74 of the 132 seats in the Palestinian Authority parliament; its members were sworn in on 18th February 2006, although at the time of writing no new Palestinian government has emerged from negotiations between Hamas and other parties (including the directly-elected PA President Mahmood Abbas, who is from Fatah). The victory of Hamas has led to a range of international reactions. Although welcomed by Iran and some popular opinion throughout the Muslim world, some other Arab governments such as Egypt and Jordan feel threatened by their own islamist groups and have called for Hamas to disarm and recognise Israel. Western governments have also called for Hamas to make these concessions and commit to the peace process, and have threatened to cut off funding to the Palestinian Authority, although the USA has been more forthright about this than Europe. Israel, soon facing its own election, has already stopped transferring customs and other revenues it collects on behalf of the PA in reaction to Hamas’ election victory. The United States has demanded the return of $50 million it gave recently to the PA but which has not yet been spent. This topic focuses how western countries, particularly the USA and European Union, should react to Hamas’ election victory. Many of the arguments could also be adapted to consider Israel’s reaction, as well as that of other countries and of international institutions such as the UN, World Bank, etc.

Argument #1


Hamas is a terrorist organisation, responsible for killing hundreds of civilians, often by sending suicide bombers into Israel. Both the European Union and the US State Department have recognised this by listing Hamas as a terrorist organisation. Their governments are barred by law from providing any funding to such groups. It is extremely worrying that such a violent organisation has managed to win power in the Palestinian election, and that committed terrorists are in government and in control of the Palestinian budget and security forces. Both our laws, and our moral disgust at the thought that our aid funding could be used to fund terror attacks, require us to stop funding the Palestinian Authority while it is under a Hamas government.


Hamas is a religious movement dedicated to political and social action. For many years it has run the most effective welfare programmes in the Palestinian territories, especially Gaza, including orphanages, schools, clinics and help for the needy. The honesty and discipline of its leaders and followers provide a stark contrast with the corruption and chaos of the Fatah-run administration of Yasser Arafat and Mahmood Abbas. They paid lip service to the peace process but either could not, or would not control their followers so as to make a clear commitment to peace. At least with Hamas in power the Palestinians will be better and more honestly governed, and billions of dollars in aid money will no longer be stolen by a corrupt elite. In addition militias and security forces are likely to be under much more effective control, making genuine negotiations about a long-term ceasefire between Israel and the Palestinians much more plausible. After all, a deal which excludes Hamas has no chance at all of holding.

Argument #2


It is clear what Hamas has to do in order to convince western governments to continue funding the Palestinian Authority. It has formally to give up terror, accept the existence of the state of Israel and drop its anti-Semitic ideology. Yasser Arafat’s PLO and Fatah Party made these commitments in the early 1990s, and this allowed them to become negotiating partners in the Oslo Peace process. Hamas has to take the same steps if it wants to enjoy the same level of support from western donors which the previous Fatah government had. Until it makes these public changes, we should not fund its government.


Much of the power in the PA rests with the Fatah President, Mahmood Abbas, and he remains committed to the peace process. Withholding funding would weaken his position and make it much more likely that an extremist will be elected President next time around. In any case, Hamas has undergone a clear political shift already in choosing to stand in the elections, and this gives a long-term prospect for an end to the violence. Working with a government including Hamas figures will encourage the moderates within that organisation, and allow them to understand that helping the Palestinian people to a better future requires compromise and negotiation. This move from terrorism to a political process will take time in order for attitudes to change and trust to build. It can only be achieved by western commitment to work with the new government rather than to cut it off entirely.

Argument #3


Hamas may have been democratically elected (although it did not win a majority of the popular vote) but that does not mean we have to fund its government. Respecting the decision of the Palestinian people is not the same thing as liking their choice and signalling that approval with the reward of aid. The Palestinian people should have realised when they voted that a vote for Hamas would isolate them internationally. Showing our clear disapproval of terrorists in government sends a clear message ahead of future elections.


It would be anti-democratic to punish the Palestinian people for exercising their right to vote. Their vote for Hamas was not a vote for terrorism or against the peace process, but rather a response to the corruption and anarchy of Fatah and its mismanagement of the Palestinian Authority. Withdrawing funding is not just a signal of dispproval for Hamas, but a clear attempt to bring down the PA government and overturn the election result. After all the years of western criticism of corrupt dictatorial regimes, what message does it send to Arab governments and people if the west refuses to respect the result of the January 2006 election but instead imposes a collective punishment?

Argument #4


Arab and Muslim states won’t necessarily make up any budget shortfall if the EU and USA stop funding the PA. Many are deeply unhappy at seeing islamists in government and even though they do not like Israel, they have no wish to inflame the situation further. Egypt and Jordan in particular are urging Hamas to recognise Israel, give up terror and disarm their militias. Iran may be more sympathetic, but almost all Palestinians are Sunni rather than Shia Muslims, and Iran has its own international problems at present over its nuclear programme and possible sanctions.


Cutting off aid to the Palestinian Authority would be counter-productive. Already Hamas officials are seeking to replace any reduction in EU and US funding with aid from Muslim and Arab states, such as Saudi Arabia and Iran (both enjoying huge income from high oil prices at present). Allowing the Palestinians to become dependent upon such anti-Israel regimes will end any influence the west has had with the PA and push it in a more extremist direction. Potentially such alliances could make a regional conflict more likely.

Argument #5


Cutting off aid to the PA need not result in mass suffering among the Palestinian people. Both the EU and the USA have pledged that humanitarian aid will continue, although this will not be channelled through the PA but rather to individual schemes run by non-governmental organisations. In any case, the greatest suffering is caused by a lack of a peace process with Israel. A PA commitment to peace talks shown by an end to terrorism would allow the economic development needed to create jobs and relieve poverty in the Palestinian territories.


The loss of funding will destabilise both the Palestinian Authority and the society as a whole. 140 000 PA jobs are dependent upon the income from western funding, and these workers in turn help support more than a third of the Palestinian population. They also provide 80% of Palestinian healthcare, almost all the education, welfare system, the police, etc. Cutting funding could lead to the collapse of any government system and cause great suffering among the people when one of their chief sources of income has gone. Both these things are likely to radicalise the Palestinian people further and make peace less likely.

Argument #6


The history of the IRA does not provide a useful precedent for dealing with Hamas. Leaving aside questions of how genuine the IRA’s conversion to peace and democracy really is, parallels with Hamas are misleading. Compared to the religious fundamentalism of Hamas, Irish republicans were pretty secular and focused on gaining and using power in this world. They wanted to force Britain out of Northern Ireland, but not to wipe Britain itself off the map. There has never been an IRA suicide bomber and, faced with a failing armed struggle, the movement’s leaders chose to compromise. Hamas is entirely different in its beliefs and attitudes, and there is no reason to suppose that funding it in power will encourage it to change its aims and strategy.


There is a clear precedent for engaging with terrorist groups moving towards a political track. Like Hamas in recent years, at the end of the 1970s the IRA was a terrorist organisation which rejected the political process. In the early 1980s Sinn Fein, the political wing of the IRA decided to stand for elections. As elected representatives grappled with local issues and had to work with others on councils and committees, the movement changed and in 1994 the IRA declared a ceasefire. More recently Sinn Fein leaders have held ministerial positions in Northern Ireland and the IRA has ended the armed struggle and disarmed. This was a long process but it shows clearly how if we respect Hamas’ popular mandate and are prepared to engage with them, they may be encouraged to give up terrorism and make concessions for peace.



  • This House would cut funding to the Palestinian Authority
  • This House would not support Hamas in government
  • This House calls on the EU to withhold funding for the Palestinian Authority
  • This House will not finance terror

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