For Palestinians, Much Is Promised

Despite host of offers, aid experts are concerned that projects be practical and that nations deliver

INTERNATIONAL donors have pledged almost $2 billion to help build the pillars of an Israeli-Palestinian peace, but the foundation is shaky, according to some connected with West Bank and Gaza development.

They question whether the fundraising targets are too low, and if the funds will be managed efficiently enough to produce tangible improvements in the quality of life to satisfy the accord's most ardent Palestinian opponents. (Israeli Army raids could sour peace accord, Page 14.)

Seizing on its opportunity to act quickly, the White House held a donors conference here last Friday while the world's top finance officials were in town for the annual meetings of the International Monetary Fund and the World Bank.

``People will need to see that peace brings prosperity,'' says a top United States administration official. The White House has been almost boastful about its ability to mobilize European, Asian, and Arab support just weeks after it hosted the dramatic signing ceremony to end what is considered the core of Middle Eastern conflict.

But to Youssef al-Sayigh, chief economic adviser to the Palestine Liberation Organization, donors are not digging deep enough in their pockets to redress the abject poverty in the West Bank and Gaza. He is mindful that the PLO's bold decision to recognize Israel and accept limited autonomy as a first step toward Palestinian independence has angered many Palestinians.

Mr. Al-Sayigh was in Washington last week pushing global financiers to up the ante. The West Bank and Gaza need an immediate infusion of $2.5 billion, and almost $12 billion by the end of the decade, Al-Sayigh says. Almost half of his proposed budget is for better housing.

ATOP US Treasury Department official calls the PLO's claims exaggerated. Instead, benchmarks provided by the World Bank study, ``Developing the Occupied Territories,'' will be used by donors as they assess the needs of the West Bank and Gaza Strip. The bank will dole out its own funds and play a major role in coordinating global contributions. It estimates that $2.4 billion is needed over the next five years.

Among the initial commitments: $500 million from the US; $600 million from the European Community; $200 million from Japan; $100 million from Saudi Arabia; $150 million from Nordic countries; and $75 million from Israel. The sum so far, almost $2 billion, is in promised grants, trade credits, and loans for the next five years.

The pledges will be hard to collect, says Peter Gubser, president of American Near East Refugee Aid (ANERA). ``I will be flabbergasted if those great big numbers are honored,'' he says. ``The Europeans have a long history of delay, the Japanese have very little aid history at all, and the Gulf states will try to get a price for their contributions - such as apologies [for Palestinian support for Iraq during the Gulf war].''

According to a top US administration official, the US and other donors will work with two international agencies that have longstanding presence in the region: the United Nations Development Program (UNDP) and the United Nations Relief and Works Agency (UNRWA). And donors will tap the experience of other nongovernmental professionals operating in the field.

Among them is Mr. Gubser, whose private voluntary organization, ANERA, is engaged in a variety of projects, such as construction of sewage systems, waterworks, and industrial parks. Gubser say he is concerned about whether the money will be used the way US officials say it is intended: to produce immediate and tangible improvements in the security and daily lives of Palestinians.

``The Palestinians need to create structures to receive and coordinate ... assistance and to ensure that it is put to productive use,'' says Assistant Secretary of State for Middle Eastern Affairs Edward Djerejian.

``It will take at least six months to 1 1/2 years until the Palestinians develop that capacity,'' Gubser says. The most crucial first step, he says, is to encourage immediate municipal elections among the Palestinians in order to give local people a stake in their own development, he adds.

The US administration official insists there is plenty of Palestinian absorptive capacity now for aid in short-term projects: ``Many teachers [in the West Bank and Gaza] haven't been paid in years, water is unsanitary, roads are poorly maintained,'' he says.

In the rush to take credit for high-profile support, assistance may be misplaced because of the donors' self-interest. The European Community is intent on moving front-and-center by pledging more money than the US, and quickly identifying hospitals, housing, and school refurbishment projects to finance.

A French team arrived in the West Bank recently and announced Paris' intention to fund an airport in Jericho, expand another already existing airfield, and construct a port in Gaza.

``It's really grandstanding,'' says a seasoned US aid worker in the region. ``All of these projects are ludicrous. They don't need an airport in Jericho. There's a large one just miles away. And the port is unnecessary. There are ports in Ashdod and Ashkelon, right up the road. Basically the French just want to sell a lot of used airplanes.''

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