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Palestinian Foreign Aid: U.S. Aid to PA Exceeds Marshall Plan Aid to Europe

by Dr. Patrick Clawson (Updated 2002)

The Marshall Plan distributed $60 billion (at today’s prices), which worked out to $272 per European in the main participating countries. By contrast, by the end of last year, according to the World Bank, the Palestinians had received $4 billion since Oslo, which translates into $1,330 per Palestinian. In other words, the Palestinians have already gotten more than four times as much as the Europeans got from the Marshall Plan. Or if done on an annual basis, the Palestinians have gotten $161 per person per year compared to $68 per person annually under the four-year Marshall Plan, meaning the Palestinians have gotten more than twice as much aid for twice as long as Europe got under the Marshall Plan.

In 2000, WBG [West Bank and Gaza] received $636 million in aid or $214 for each of the three million WBG residents. That is the highest in the world by far. Only Bosnia, at $185, is close; Israel is third at $128.

The PA reported that in the first 18 months of the intifada, Arab countries provided $677 million in aid. Donor funding was “only” $482 million in 1999 before the violence began; it ballooned to $929 million in 2001. That is an extra $447 million, or $149 extra per Palestinian.

It is instructive to compare Palestinian incomes to those of other Arabs. In 2000, WBG income per person was $1,660. That was higher than in such middle-income Arab countries as Algeria ($1,580) or Egypt ($1,490). Palestinian income has fallen as the violence has worsened. In its March 2002 report on the impact of the violence, the World Bank’s estimate was that Palestinian income per person fell 19 percent in 2001, which would put the income at about $1,340. That is still above a country such as Morocco ($1,180 in 2000). The World Bank’s estimate was that harsher closure could mean that Palestinian income may fall 20 percent more in 2002, which would put the per-capita income at $1,070. Palestinian income may be only 14 percent higher than in Syria, where per-capita income was $940 in 2000.

As the comparison above shows, the Palestinians pre-intifada were solidly middle-class in the Arab world: their income was above the average for all Arabs. With the disastrous violence of the last two years, Palestinians have slipped down to become lower middle class among the Arabs, somewhere below Morocco but above Syria.

Sources: Excerpts from Jerusalem Post (August 9, 2002)