The Palestinian Authority is squandering massive amounts of foreign financial aid, acknowledged a top Palestinian economist in an address to the United Nation's Seminar on Assistance to the Palestinian People last week.
Dr. Ghania Malhis of the Economic Policy Research Institute in Ramallah noted that foreign governments have donated over $12 billion to the PA over the past decade. Non-governmental organizations (NGOs) such as UNRWA have pumped even more into the Palestinian economy.
Malhis explained that these sums are enormous considering that the PA's GDP is only about $4.5 billion a year, and that there are only around three million Palestinians living in the area, meaning they receive more foreign financial aid per capita than anyone else in the world.
And yet, the Palestinian economy is actually in worse shape than it was a decade ago.
"One cannot but feel that these resources have been wasted. When the outcome of more than a 12 billion dollar investment results in such disastrous numbers, then it is obvious that immense mistakes were made on a strategic level," said Malhis.
Besides outright corruption and theft, Malhis blamed the situation on the PA's inability to adequately manage economic affairs, noting that the production capacity in Palestinian areas was far higher prior to the start of the land-for-peace process, i.e., when the area was under Israeli control.