PA hopes to benefit from Gaza’s reconstruction file

Palestinian workers collect the rubble of Al-Jalaa Tower in Gaza City (Mohammed Abed - AFP)

Adnan Abu Amer 

Middle East Monitor  / June 22, 2021

Over the past few hours, the Palestinian Authority (PA) announced the formation of three teams, composed mostly of its ministers with a partial representation from Gaza, to rebuild the Strip. It also declared that it has not received any of the funds promised for reconstruction projects.

This comes after three weeks which have witnessed the PA exerting pressure on regional and international actors to back the Palestinian leadership as the only one responsible for managing and directly supervising the reconstruction file. By doing so, they would then pump donor funds through its budget.

Prime Minister Mohammad Shtayyeh led the Gulf tour, which included Kuwait, Qatar, and Oman, to persuade the region’s leaders to send aid to the PA, while Foreign Minister Riyad al-Maliki headed to Iraq carrying the same message. A further delegation visited Egypt to discern Cairo’s position on the reconstruction of Gaza.

At the political level, the PA is aware that the recent ‘Sword of Jerusalem’ battle will reset the map of alliances in the region and strengthen the position of Hamas, which refuses to name the PA as the only representative of the Gaza reconstruction file. Hence, the PA tried to propose the establishment of a Palestinian committee to manage the reconstruction file under its leadership’s supervision, this has been categorically rejected by the resistance factions.

The Palestinian leadership knows very well that being excluded from the Gaza reconstruction file will pave the way for the emergence of a new phase that might cost the PA the trust of the international community and donor countries, given the fact that in recent years the donor countries have adopted the Qatari and US policy based on the principle of transferring project funds to affiliated bodies and directly implementing reconstruction contracts, such as the Qatar Committee for Reconstruction of Gaza, which recently opened an office in Gaza, and the United States Agency for International Development (USAID).

The PA fears a return to the post-Oslo phase if the donor states decide to directly implement their commitments for the development of the Palestinian economy and the reconstruction of what has been destroyed by the Israeli wars without seeking its agency, because this scenario will cost it part of its legitimacy as the representative of Palestine and cast doubt on its ability to reach a future political agreement on establishing an independent state that serves and manages the people’s interests.

Salam Fayyad, who served as prime minister between 2007 and 2013, sought to control aid funds by convincing donor countries that development capital must pass through the PA treasury.

However, after the recent Israeli aggression, voices from Gaza became louder and they accused the PA of not having the required transparency and integrity to manage the reconstruction file. The Gulf states and Europe are now aware of these accusations and will reconsider their options. This will widen the rift between Palestinian movements and may rupture relations if the PA insists on its position.

The private sector in Palestine insists on taking part in the reconstruction agreement in order to facilitate the work of the committees tasked with implementing the measures and compensate those affected by the war. It has also expressed its surprise at the PA’s concern about the possibility of adopting the Qatari reconstruction model by donor states, even though it has proven to be a success in developing Gaza compared to efforts by the Palestinian leadership.

From an economic point of view, the transfer of reconstruction funds through the PA’s treasury would benefit its coffers, which have been hit by coronavirus closures, cuts to the tax funds collected on its behalf by Israel, and a reduction in foreign state funding for the PA.

The Palestinian leadership has suffered from a public debt crisis over the past two years, reaching a level close to 40 per cent of GDP, at a value of $3 billion.

Similarly, the PA seeks to benefit from interest payments on reconstruction funds which could amount to $300 million annually. It will also seek to deduct Gaza’s expenses from the funds, including the cost of the electricity supply from Israel to the besieged enclave estimated at $140 million per year.

The Palestinian Authority in the occupied West Bank has lost much over the years, both in terms of its authority and funding, and the recent destruction resulting from Israel’s bombing campaign of Gaza has provided it an opportunity to recoup its losses and reposition itself as the representative the Palestinian people; one the international community can go back to trusting.

Adnan Abu Amer is the head of the Political Science Department at the University of the Ummah in Gaza