Dollar bills don't put out a fire, not even the $4.5 billion that nations pledged for the West Bank and Gaza in 2009. If financial aid could cure what is ailing those two spots, the Palestinians would replace the Norwegians in the Global Peace Index as the most peaceful people in the world.
In fact, the Palestinians are the top per-capita aid recipients in the history of the planet. In 2008, they received $3 billion in foreign aid, and they are expecting another $4.5 billion in 2009 in addition to plane-loads of relief, both in goods and services. The accumulated U.S appropriations in USAID and via UN Relief and Work Agency, UNRWA, will amount to over 5.5 billion by the end of the year.
It's not just how much, but how long Palestinians have received international welfare that breaks all records. Set up in 1949 with a temporary, three-year mandate to provide aid and jobs for 700,000 Palestinian refugees, UNRWA has grown into a permanent institution for a people who have held the refugee status for sixty years and seemingly will continue to do so for the foreseeable future. The number of "refugees" has inflated to 4,618,141, since refugee status is an inheritance which is passed on to all descendents and their descendants no matter where they live.
With trillions of dollars in budgets and bailouts, $4.5 billion seems a modest sum unless we consider the number of recipients and the economic conditions of the Palestinian territories. So how much does an average Palestinian family get from the international welfare and to what extent do the donations improve their quality of life?
The census numbers are disputed with the Palestinian Authority claiming 4.0 million in both Gaza and the West Bank and Israel's demographers estimating a population closer to 2.5 million. For our purposes, let's split the difference and say that 3.25 million Palestinians are recipients of the world's largess. According to the U.N., the average family size in the territories is 4.75. That means there are about 684,000 Palestinian families. If the $3 billion in contributions had reached them, each family should have received a hefty sum of almost $4,400 last year. A $4,400 windfall beats the $8 a week Americans are supposed to see in their weekly paychecks with the new Stimulus plan. However, for Palestinians, whose average daily wage is about $25, the infusion would be life-altering. Multiply one year's donations by sixty years, and we would expect the Palestinians to be enjoying a fairly comfortable standard of living with decent homes, thriving businesses, quality schools and maybe a little money in the bank. All the billions, however, have resulted in abject poverty rather than prosperity.
Why? International aid has led to and will continue to lead to poverty because it is more profitable for the Palestinian governing bodies to keep the population dissatisfied and resentful while the funds are misappropriated. Arafat, master of slight-of-hand, pointed towards Israel as the source of all ills. While Palestinians held up their fists against Israel and glared, Arafat held up the Palestinians, emptied the coffers, and winked. The Palestinian Authority today continues his legacy of corruption and crying poverty for profit.
In Gaza, Hamas may be less corrupt than the P.A. but is equally devious with international funds. Money targeted for schools and roads ends up buying rockets to blow up Israeli schools and roads. In 2007, security forces discovered 2,000 AK-47 assault rifles, hundreds of RPG launchers and ammunition in the Hamas-controlled Islamic University in Gaza. During the last war with Israel, it became apparent that Hamas had allocated serious resources to digging weapons smuggling tunnels and no money to dig bomb shelters for its civilians. Last month, the Hamas theft of UN humanitarian aid was so egregious (10 trucks of food aid were confiscated) that even UNRWA temporarily suspended aid.
The Palestinian Authority and Hamas are not the only beneficiaries of Palestinian poverty. UNRWA, which receives public funds but permits no outside audit, thrives and grows only when Palestinians are needy victims. The greater the Palestinian distress, the better the prospects for more fundraising. At best, UNRWHA casts a blind eye at the dishonesty. At worst, UNRWA's employees, most of whom are Palestinians, are complicit in the crimes.
Even if there is a miraculous shift in the Palestinian government and UNRWA opens its books to pubic scrutiny, money won't address the problems of a people who are so indoctrinated against Israel that hate trumps survival. When Ariel Sharon forced Gaza's Jewish inhabitants to move out, they left behind state-of-the-art greenhouses which produced high-end flowers, fruits, and vegetables to large international markets. Expecting the greenhouses to be an economic boon for Palestinian Gazans and thus a step towards peace, American Jewish donors contributed $14 million to buy the greenhouses from their owners and transfer them to the Palestinian Authority. Former World Bank president James Wolfensohn, who acted as the broker, threw in half a million dollars of his own money to make the deal happen. Within hours after the disengagement, Palestinians looted and destroyed the greenhouses even though they were destroying their own chances for an economic revival.
We have had sixty years to learn that while money can't put out the flame of hate, money can fuel it. We must be very slow learners. Today, in the midst of an economic recession that is devastating many American families, we are going to borrow $900 million and witness our money burn.
USAID Assistance to West Bank and Gaza- in $ thousands
US Contributions to UNRWHA
Annual Appropriations FY 94 - 97 
Total Contributions 1950-1997