Report: Hever, How Much International Aid to Palestinians Ends Up in the Israeli Economy?

Hever, Shir. “How Much International Aid to Palestinians Ends Up in the Israeli Economy?” Aid Watch, September 2015.
 
URL: http://www.aidwatch.ps/sites/default/files/resource-field_media/InternationalAidToPalestiniansFeedsTheIsraeliEconomy.pdf (PDF)

 

Extract
The strong correlation between aid and the balance of payments deficit discussed in this article indicates that, regardless of how one chooses to measure the relationship between aid and the trade deficit, the inescapable conclusion is that the majority of aid money finds its way sooner or later into the Israeli economy. As exports to the OPT account for approximately 5% of total Israeli exports (BOI, 2014:54-55), and the majority of these exports are financed by international aid, one can conclude that international aid to Palestinians contributes billions of dollars to the Israeli GDP and makes it possible for Israel to afford the continued military occupation. The findings here indicate that at least 78% of aid money is used to import from Israel, thereby covering at least 18% of the costs of the occupation for Israel.
The question arises of whether the Israeli government would end the occupation if aid ceased? Would the Israeli authorities rebuild the Civil Administration to assume their responsibilities under IHL in place of international donors? Or would they remain indifferent to a mass humanitarian disaster that could cost the lives of thousands of Palestinians? The tremendous moral implications of these questions indicate that aid is not something to be toyed with when so many lives are at stake. Nevertheless, the dependence of the Israeli authorities on international aid to the Palestinians as a mechanism to finance the ongoing military occupation gives donors important leverage to put pressure on Israel. This leverage carries with it political responsibilities. Donors cannot close their eyes to the fact that their donations are enabling the occupation and have funded grievous violations of international law. They are not themselves the occupiers of the Palestinians in the OPT, but decades of acquiescing to Israeli demands and conditions on the disbursement of aid have turned them into accomplices to Israel’s crimes.