Soccer Dad

Pleading Poverty

HonestReporting.com had a recent communique "Understanding Palestinian Poverty" that made the important point that Palestinian poverty is not the function of closures or other Israeli security measures. It is the result of the massive corruption of Yasser Arafat and his henchman.
This is nothing new. In April, 1983, Daniel Pipes wrote "How Important is the PLO?" in Commentary. He noted:

About 5 to 10 percent of the pay of the 300,000 Palestinians working in the Gulf states is withheld by the governments there and earmarked for the PLO; were all of this money to reach its stated destination (which is not the case), it would provide the PLO with about another $250 million a year. Aid also comes from the farther away, from radical and Islamic groups around the world: in January 1983, for instance, the Malaysian Islamic Youth Movement in Kuala Lumpur gave a check for $80,000 to the local PLO representative. Terrorist activities have also proved a source of funds; the PLO reportedly received $20 million in December 1975 for releasing the OPEC oil ministers it had helped take hostage.

With this capital, the PLO was able to start large-scale business enterprises. In Lebanon, it ran a conglomerate called Samad ("Steadfast") whose 10,000 employees and estimated $40-million gross revenues in 1980 made it one of the country's largest firms. The Popular Front for the Liberation of Palestine (PFLP), an organizational member of the PLO, achieved a near-monopoly over steel products in South Lebanon during the late 1970s by importing steel from the Soviet bloc at concessionary prices and paying no import duties (the PLO controlled the ports of Sidon and Tyre). Its factory, the Modern Mechanized Establishment near Sidon, undercut competitors and drove them out of business; then it raised prices and reaped huge profits. Many Lebanese believed that predatory pricing was integral to the PLO's plans to retain control over South Lebanon. In addition to its local investments-a hotel in Lebanon, a chicken farm in Syria-the PLO owns a portfolio of investments in the industrial states, including a disco club in Italy and an airline in Belgium.

The PLO also controlled most of the approximately $30 million a year sent by the Arab governments to the West Bank and Gaza, though on some occasions Arab states themselves became directly involved. For example, Mayor Elias Freij of Bethlehem received $600,000 from Kuwait in 1977, reportedly in exchange for refraining from speaking of peaceful coexistence with Israel.

All in all, the PLO's annual budget in recent years has been estimated at about $1 billion, prompting Time to call it "probably the richest, best-financed revolutionary-terrorist organization in history." Its leaders could enjoy an unusually opulent style of life; on one occasion, three PLO directors lost $250,000 of the organization's money at the gambling tables. If Yasir 'Arafat maintained an abstemious way of life, other of the top PLO brass were notorious for high living; Zuhayr Muhsin, head of As-Sa'iqa, was assassinated while residing in a luxury hotel on the Riviera.

Militarily, too, the PLO benefited from an extraordinary aid program. No revolutionary group ever found procurement so easy. Arms came from every source-even the U.S., via Vietnam and Libya. On uncovering PLO arsenals in Lebanon, the Israelis were stunned by the quantity, diversity, and sophistication of the weapons they found, including: 5,630 tons of ammunition, 1,320 vehicles and troop carriers (several hundred of which were tanks), 33,303 light arms, 1,352 antitank arms, 215 mortars, 62 Katyusha launchers, 88 field cannons, 196 antiaircraft arms, 2,024 items of communication equipment, and 2,387 items of optical equipment. In all, the Israelis carted 4,330 truckloads of PLO materiel out of Lebanon.

Even then the Arafat enjoyed quite a nice payday.
Last year Forbes pegged Arafat's wealth at $1.3 billion.

"I am here to tell you it's not Arafat's money anymore," says Fayyad, sitting in his office in Ramallah, three miles from the Arafat base that Israeli tanks have all but destroyed. A portrait of the Palestinian leader looms above him. "I'm not going to accept anything but total transparency."

He is using standard accounting to take control of the PA's mysterious finances and open them up for all to see. Arafat's three main sources of cash: foreign aid, Israeli tax transfers and profits from PA-controlled companies. Fayyad's first move was to consolidate the PA's funds into a single treasury account under his control. That change ended the autonomy wielded by ministerial fiefs that were free to collect their own revenues and redistribute the funds as they saw fit.

It amounts to a direct attack on Arafat's elaborate patronage system, which ensures the loyalty of the Palestinians' fractious factions. "He is always ready to pull money out of his pocket to buy people," says Said Aburish, an Arafat biographer. An Israeli intelligence report pegs Arafat's personal holdings at $1.3 billion (a claim dubbed "ridiculous" by the Arafat camp), but Israeli officials say Arafat uses his largesse mainly to buy friendships.

Other articles about the PA's corruption include "The Man who Swallowed Gaza" and many articles by Dr. Rachel Ehrenfeld.

In December 1998, the late Michael Kelly weighed in with "Investing in Yasser Arafat:"

THERE WAS A WONDERFUL MOMENT in the annals of diplomacy this week. Yasser Arafat, the president of the Palestinian Authority, had come to town to attend an international conference convened by the White House to raise a new pile of money to give to President Arafat. And the conference had gone splendidly.

Everyone had behaved perfectly fine; no one had so much as mentioned the inconvenient London Sunday Times story the day before, which said that the Palestinian Authority had swiped $20 million in British aid intended to build housing for the poor of Gaza, using the money instead to build luxury flats for Arafat's military and bureaucratic elite. After a day of pleasantries, representatives of 43 nations had pledged $3 billion in new aid to the Palestinian Authority, including an extra $400 million from the U.S. president. Arafat saw that it was good. "I am satisfied with the reality of this conference," he pronounced.

The reality? The reality is this: Since July 1, 1994, the day that Yasser Arafat arrived to take charge of Gaza, the international community has given the Palestinian Authority about $2.5 billion in aid. In that time, to the confoundment of confident predictions, life in Gaza became, for most people, even more poor, nasty, brutish, and short than it had been before the arrival of President Arafat. In the past four years, wage rates in Gaza have fallen 50 percent and unemployment has risen to highs of 50 percent; currently, it hovers at around 30 percent. The gross national product per Palestinian has declined by 35 percent. The number of Gazans legally working in Israel (where the jobs are) has fallen from a pre-Arafat figure of 116,000 to as low as 23,000. The percentage of goods manufactured in Gaza and marketed in the West Bank (where the consumers are) declined from about 50 percent to 2 percent by 1996. In the first two years of Arafat's rule, one-third of Gazan businesses folded. Foreign commercial investment in Gaza declined from $520 million in 1993 to below $300 million in 1997. The number of Palestinians living in poverty soared; one out of every four now lives below the poverty line.

But this is significant because the Palestinians didn't get up and protest this outrage. Nope. They had a different outlet:

The Israeli leader is also demanding that Arafat drop claims that Netanyahu promised at Wye to release 750 Palestinians jailed for anti-Israel attacks that resulted in bloodshed, rather than freeing car thieves and petty criminals.

Each side has a different interpretation of the understanding regarding the prisoners. Netanyahu maintains he never agreed to free those with "blood on their hands."

"It's high time that Yasser Arafat admits this was agreed upon and that he's not going to make demands on Israel, including the incitement of violence,...on a trumped-up charge, " he said. "Israel never promised to release murderers at Wye, and it won't release them."

The issue has been the focal point for a new wave of violent protests and demonstrations in the West Bank and a hunger strike that began Saturday by the 1,700 Palestinian inmates.

A pliant media allowed the PA to get away with the misdirection of "rage" over prisoner releases. Once the damaging information about the pilfered funds became public, Arafat saw to it that the scandal would die.

(This pattern has occurred at least two other times. In 1996, the "tunnel riots" were initiated ostensibly because the Netanyahu government opened a historic tunnel into the Muslim quarter of the Old City that supposedly weakened the foundation of the Al Aqsa mosque. But a few weeks earlier there had massive demonstrations against Arafat. Clearly Arafat used the excuse of Israeli actions to distract his population. An all too willing Clinton administratin and the world media complied with this tactic.

After Arafat PM Barak's offer at Camp David he initiated the current "intifada" counting correctly on the international community to condemn Israel for defending itself and thus escaping blame for rejecting peace. Folks like Robert Malley and Deborah Sontag helped also, explaining unhelpfully that PM Barak wasn't as generous as advertised and otherwise excusing Arafat's rejection of peace.)

It's also worth noting that Palestinian poverty is not a cause of the violence. Arutz-7 recently reported that it is the wealthy who kill themselves in terror attacks.

The Telegraph reports that parents in cities such as Hevron, a center of Hamas recruitment for recent "martyrdom" operations, are increasingly fearful of losing their children to the terrorists. For instance, the Al-Jama neighborhood - described in the paper as featuring "large spacious houses, smart cars and vineyards spread out over undulating hills... a pocket of relative prosperity" - has seen no fewer than 11 of its young men die while carrying out suicide bombings and other attacks against Israelis. Among them were the two who murdered 16 Israelis last week in Be'er Sheva.

These numbers put the lie to Shimon Peres' oft-repeated thesis that terrorism is a result of the Arabs' poor economic conditions, and that peace will follow prosperity.

It's worth repeating that Israel is not the cause of Palestinian poverty. It's also worth repeating that that poverty is not the cause of the violence. Radical Religius Irrendentism is.
Crossposted on Israpundit and Soccer Dad.

Posted by SoccerDad at September 14, 2004 03:22 AM | TrackBack