Moving Beyond Aid: Entrepreneurship and Collaborations for Development
From infrastructure to development programs and commodities that include necessities like food and medicine, rather than creating an environment in which aid can be used to create economic dependence, thousands of Palestinians have come to rely on foreign assistance to survive.
Foreign Aid in Palestine: An overview
Apart from public sector dependence on foreign aid, there are over 400 local and international NGOs and charitable societies operating in Palestine, Charitable Societies operating in Palestine, including the West Bank, East Jerusalem, and Gaza. These include organizations tackling a range of issues, such as employment, education, community development, and human rights, to name a few.
And in terms of financial aid, an in-depth article published by Carnegie Endowment for International Peace, delves into the nuances of aid received by Palestine and analyzes financial reports made available by the OECD. The article reveals that between 2008 to 2016, Palestine (West Bank and Gaza) has received nearly 20 billion USD. This breaks down to roughly 5.7 billion from the U.S., 3 billion from the United Nations, 7.9 billion from EU Institutions and its Member States, with an additional 162 million from multilateral institutions, and the additional aid packages provided by the Arab World on an annual as well as monthly basis.
Tracking the Aid
While Palestine receives a staggering amount of aid annually, the question as to how effective the international community has been in supporting a more resilient local economy arises. Despite this, Palestine suffers from what may seem to be an endless occupation, in which their borders, natural resources, market economy, and movement is restricted.
So where does all this aid go? Aid Watch Palestine reports that approximately 78 percent of financial aid never even reached Palestine. Instead, these funds are reserved by Israel for import and export services. Mainly to cover port, transportation, and security fees, which are directly paid to both private and governmental Israeli institutions.
Ultimately, Palestine’s economic dependency on foreign aid is far from changing anytime soon. And the aid that does reach Palestine is necessary for the daily operations of many private and public sector institutions. To this end, a more effective approach needs to be adopted, one that combines local and global outreach of NGOs, and the disruptive power of emerging startups across the country.
Entrepreneurship and Collaborations for Development
In Palestine, the role of donors and NGOs cannot be overstated. These entities are responsible for maintaining the status quo due to weak government services and existing limitations. As such, the NGO sector and donor community are expected to fill this continuously widening gap, and with the current ongoing political and economic crisis sweeping the country, their role is increasing.
Dependency on foreign aid and the focus on short-term solutions is unsustainable, to say the least. Case in point, one of the biggest donors to Palestine, the U.S., provided an estimated 6.9 billion USD between 2001 and 2018, and contributed 6.25 billion to UNRWA since 1950. However, under the latest administration since (2017), aid has significantly dropped from 4.9 billion during Obama’s consecutive terms to less than 522 million during Trump’s. This reflects a major shift in the arena of donor aid as Palestine’s biggest donor, the U.S., cuts them off drastically from financial support.
To address these present concerns, investing in entrepreneurs can help spur industry, inspire innovation, and contribute to socio-economic growth. Entrepreneurship also provides Palestinians with the opportunity to look within, tap into their resilience, and come up with creative solutions that actually meet the needs of local and even global markets.
Transparency to Promote Donor Confidence
For donors and NGOs, transparency or lack thereof can be a major deal breaker, costing communities opportunities to sustainably develop This is where local startups step in. While billions of dollars are being infused into the Palestinian economy on an annual basis, the questions as to where the money is actually going, and how effectively it is being invested or distributed, come up time and again. By working with local startups, particularly those specialized in fintech, blockchain and blended finance, the donor community as well as local NGOs can keep tabs on how funds are being utilized, building trust and ensuring transparency in the process. And again, this mutually beneficial collaboration will help increase the viability and visibility of local startups.
According to the World Economic Forum, FinTech and blockchain is revolutionizing the world of sustainable development, infusing the latest technologies to maintain efficiency in cross border projects, public-private collaborations, and managing millions in investments. And as the international community continues to embrace these new tech based solutions, Palestine needs to do the same, to inspire safe and secure investments. Further, fintech and blockchain are directly related to impact especially where emerging economies are concerned, as they address crucial socioeconomic issues, while providing thousands with a virtual gateway into the global economy.
Ultimately, donor aid is an integral part of the Palestinian economic landscape, and ensuring transparency and efficiency by adopting smart tech solutions within the realm of blockchain or FinTech, can help committed stakeholders fight back against aid corruption, and ensure that aid and investments remain accounted for, and monitored.
The long-term advantage of bringing entrepreneurship to the world of NGOs and donors, will ensure transparency and accountability, encouraging donors to inject additional development funds into Palestine, because their governments, and taxpayers can see how their investments are being spent, ensuring measurable and effective results.
And as Palestine continues to embrace the power of entrepreneurship and collaboration, within both the private and public sector as well as with the international community of committed stakeholders, a resilient generation of innovators can step-up to usher in a new era of development and growth.