Peace through gas in Israel and Palestine
Last month’s special report by the European Court of Auditors on EU financial support to the Palestinian Authority has been described by some commentators as a political minefield.
The audit was, in fact, largely positive.
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The court verified that a satisfactory control system has been put in place to ensure that the EU assistance, the bulk of which is given as direct budget support, is paid to eligible civil servants on the PA’s payroll.
It also criticized Israel, and rightly so, for not doing enough to help ensure that the assistance is effective.
But it made the important observation that the EU is co-funding the salaries of a considerable number of civil servants in Gaza who are not turning up to work because of the political situation. The exact figure is not clear to anyone.
In any normal context this would be considered a waste of money.
The auditors recommended that the parties should reach an agreement for this funding to be discontinued and redirected to the West Bank.
They noted that the EU has not applied adequate conditionality or used performance indicators.
After all, the main objective of the assistance is to finance public services for the benefit of the Palestinian people, but if the Gaza offcials are not doing their jobs, then no services are being provided.
Paying for absent civil servants because the PA has demanded it or because of fear that they might otherwise turn to terrorism is close to giving in to blackmail.
The auditors also say that the informal nature of the communication channels between Gaza civil servants and the Palestinian Authority in Ramallah makes the payroll system prone to corruption by actors at all levels.
But the current set-up is the very opposite of accountability and encourages corrupt practices.
The level of corruption in the Palestinian territories is already high. It might be explained by factors such as the occupation, but it is also linked to aid-dependency, with large amounts of foreign money flowing in under few, if any, conditions.
In its reply to the report, the European Commission said the assistance is needed for Palestinian state-building in view of a future two-state solution.
But if the fight against corruption is a priority in state building, foreign aid should not be conducive to corruption.
For the two-state solution to come into being, Palestinian civil servants must do their job and both the PA and Israel must negotiate a peace settlement in good faith.
The audit report also highlighted another issue which must not be overlooked, however.
It noted that the EU paid €107 million in direct assistance for the purchase of fuel for Gaza’s sole power plant.
This component of the EU support was suspended at the end of 2010 because of a dispute on VAT and it was later replaced by a development project in the electricity sector.
The power plant, which normally provides about 30 percent of the electricity in the Gaza strip - if it has fuel - has never worked to its full capacity.
Part of it was destroyed by Israel in 2006 and was never fully repaired.
According to the auditors, the plant was originally designed for natural gas, but instead uses diesel. This is probably more expensive and certainly emits more carbon dioxide.
When the delivery of industrial diesel from Israel stopped, regular diesel, which causes even more pollution, was smuggled from Egypt via Gaza tunnels. But the new military regime in Egypt has clamped down on smuggling.
The delivery of diesel from Israel was recently resumed with funding from Qatar. This solves the problem temporarily and reduces the number of power cuts in Gaza, but it does not address the permanent deficit in electricity.
The situation becomes acute during cold winters.
The power cuts affect the daily lives of the inhabitants and harm prospects for economic growth. They also affect the running of hospitals and waste water treatment.
The Court of Auditors says nothing on how to solve the problem.
But environmental pollution knows no borders.
Meanwhile, Israel has in recent years discovered huge natural gas reserves in its territorial waters and has begun to replace coal with gas in its own power plants. A sustainable solution of the energy problem in the Palestinian territories should also be based on gas and renewable energy, as in Israel.
The first sign of “natural gas acting as a bridge for peace” was the signing of a sales agreement earlier this month between the drilling partners on Israel’s “Leviathan” gas field and the Palestine Power Generation Company.
The Palestinian company will buy gas for a period of 20 years to fuel a future power plant in Jenin with a 200-megawatt capacity.
The potential solutions to Gaza and Israel’s problems exist. But the EU should be more creative in helping them to come into life.
The writer is a former EU commission official dealing with enlargement