Palestinian officials say that local humanitarian groups who work with the United States Agency for International Development have scaled back their activities in recent months and are preparing to fire employees and shut down projects as a result of the Trump administration’s total freeze of financial aid to the Palestinians.
The funding freeze has also hurt local companies that USAID uses as contractors for economic projects, as well as Jewish-Arab coexistence groups that rely on American financial support for their activities, according to the officials who spoke with Haaretz.
The U.S. Congress approved an aid budget of $250 million to the Palestinians for the current fiscal year. This money includes $35 million to support the Palestinian Authority’s security forces and $215 million intended for economic development, infrastructure projects, humanitarian assistance and an additional $10 million for coexistence programs that comes from a different line item in the budget.
This entire sum has been held up by the Trump administration, which has been conducting a “review” of Palestinian aid since the beginning of the year. It has no deadline for ending that review or releasing the money.
The distribution of these funds does not contradict the Taylor Force Act, a bill passed by Congress earlier this year that prohibits direct U.S. support to the PA while it continues to pay stipends to convicted terrorists and their families. The Taylor Force Act doesn’t restrict the $35 million intended for the PA security forces, while the rest of the money approved by Congress doesn’t directly support the PA but is intended for hospitals in East Jerusalem and USAID contractors.
The Trump administration says the main reason for the funding freeze is economic, and that it is part of a broader examination of foreign aid budgets requested by the president.
Yet Western and Arab diplomats who spoke with Haaretz said they believed the freeze is meant to pressure Palestinian President Mahmoud Abbas to end his boycott of the Trump administration, which started after the president’s recognition of Jerusalem as the capital of Israel last December. The administration, these diplomats added, want Abbas to return to negotiations with Trump’s peace team – led by his son-in-law and senior adviser Jared Kushner, and special envoy Jason Greenblatt.
Elliott Abrams, who served as senior adviser to President George W. Bush, told Haaretz that Abbas is at fault for the funding freeze.
“Abbas has handled this very poorly,” Abrams said. “The administration is holding the PA to normal standards, finally. Abbas, partly I suppose due to age, isn’t flexible enough to respond. Instead, he has bitterly attacked Greenblatt. This administration is tired of paying and paying and getting nothing in return – no participation in peace talks and no cooperation on Gaza.”
Yet some former U.S. officials doubt whether the funding freeze is truly putting pressure on Abbas.
“If they are trying to pressure Abu Mazen [Abbas], then this is not the way to do it,” said Dan Shapiro, a former U.S. ambassador to Israel under the Obama administration. “Abu Mazen can live with this freeze. Most of the money isn’t going to the PA anyway.”
Those who will actually suffer from the freeze, Shapiro told Haaretz, are the USAID contractors – whether they are infrastructure-building companies, humanitarian organizations providing vital support, or coexistence groups promoting peace.
Dave Harden was mission head of the USAID West Bank and Gaza office from 2013 to 2016. He also told Haaretz that he has heard about cutbacks and project reductions as a result of the freeze. Harden said a main source of concern was damage to humanitarian aid groups operating in Gaza, which rely on U.S. support for their activities.
“In Gaza we have Hamas, the Islamic Jihad and more extremist groups,” Harden said. “The civil society is weak, the business community is weak. One of the only good things we have are the U.S. humanitarian groups. It’s a grave mistake to hurt them.”
Last month, Israeli news channel i24 reported that as a result of the freeze, one USAID-supported project for the removal of land mines in the West Bank has been forced to suspend operations.
Shapiro told Haaretz that during his time as ambassador, “There was one group of people that constantly encouraged us to support humanitarian and economic projects through USAID: Israeli security officials. It came up in conversations with Israel Defense Forces officers from the highest ranks. They said USAID projects help decrease tensions, and that this helps fight terrorism.”
The Trump administration, however, has not been convinced by these arguments and insists that the aid review serves U.S. national security interests.
“The administration continues to review our assistance to the Palestinians to ensure it is meeting our national security interests, achieving our policy objectives and providing value to U.S. taxpayers,” a National Security Council spokesperson told Haaretz. “This takes place in the context of a broader, global review. We have no announcements regarding funding at this time.”
Last week, Greenblatt hosted at the White House a group of Israeli and Palestinian children affiliated with the group Kids4Peace. Greenblatt later published a tweet praising the organization – which encourages dialogue between Israeli and Palestinian children – for its activities. He also complimented the children for their “very smart, important questions” on the peace process.
The visit surprised critics of the administration’s funding freeze, since Kids4Peace is one of a number of coexistence organizations that have received grants from USAID in the past.
The organization hinted at this in its response to Greenblatt, when it thanked him “for welcoming us – for answering hard questions and treating our youth as colleagues in the work of peace. Our movement is strong because of USAID, which is helping Kids4Peace double in size and leverage our youth to influence their communities.”
Out of the total assistance that goes to the Palestinians, a relatively small sum of $10 million is supposed to go to coexistence groups in the form of USAID grants. Supporters of such coexistence initiatives hope they will be able to convince the administration to release at least this small budget, which could be seen as complementary to its upcoming peace plan.
Harden told Haaretz, “I can see how freezing the money intended for the Palestinian security forces can put pressure on Abbas. But no one can convince me that we’re putting pressure on him or on Hamas by not funding basketball games between Israeli and Palestinian children.” He added that, to the contrary, any damage caused to “people-to-people” programs could be seen as a benefit in the eyes of Hamas and other extremist groups.
“Unlike previous administration appointees, Jason Greenblatt started off meeting with the grassroots [groups] and has a true appreciation of the work [coexistence groups] do,” said Joel Braunold, executive director of the Alliance for Middle East Peace – an umbrella organization for people-to-people groups in Israel and the Palestinian Territories. “Given his public comments and tweets, it is very hard to square his outward support for civic reconciliation with the holding of the $10 million budget to grassroots and people-to-people efforts,” Braunold added.
If the money approved by Congress for the current fiscal year isn’t transferred to the West Bank and Gaza by the end of September, it would become nearly impossible to use it. Democratic congressmen and women are worried by this possibility and wrote to Trump on the matter two weeks ago. In their letter they asked the White House to end the funding freeze, and also accused the administration of hiding information on the subject from Congress.
It should be noted that Congress has already approved $250 million in Palestinian aid for the next fiscal year, including a 20 percent increase in funding for coexistence programs. Yet if the administration decides to continue its “review process” into the next fiscal year, that money would be put on hold as well, further complicating the situation for organizations on the ground.
Former U.S. officials, as well as current Palestinian ones, told Haaretz that many of the organizations that were able to survive the current freeze will face an existential threat if the policy continues into 2019.
“There is pressure on the administration from Congress, Arab countries and others to change this policy,” one former U.S. official said. “But I’m not optimistic about it.”
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