The moral bankruptcy of the World Bank

The Nov. 24, 2020 report analyzing the financial situation of the Palestinian Authority clearly demonstrated the moral bankruptcy of the World Bank. While the report mentioned a host of factors that will contribute to and be affected by the PA’s assessed financial shortfall of $760 million, the World Bank completely ignored the PA’s generous terror reward policy, through which the PA squanders hundreds of millions of dollars every year.

Since its creation, the PA has operated a two-pronged terror reward policy. On the one hand, the PA pays monthly salaries to terrorist prisoners and released prisoners. On the other, the PA pays monthly allowances to wounded terrorists and to the families of dead terrorists.

In 2020, the PA continues to spend hundreds of millions of shekels on the terror reward program - referred to as the PA’s “Pay-for-Slay” policy - even prioritizing the payments over purchasing potentially life saving medical equipment to combat the COVID-19 pandemic. The PA is even creating a new terror bank specifically designated to ensure the continued payment of the terror rewards whilst simultaneously trying to circumvent Israeli anti-terror legislation.

Shockingly, the World Bank chose to ignore this pugnacious policy. When it assessed the potential impact of the PA’s budgetary shortfall in its recent report, the World Bank reached the conclusion that if the international community does not provide the PA with additional aid, the PA will “be forced to further cut spending impacting basic service delivery” and that the:

“Lack of additional financing would also force the PA to scale back medical and social expenditures in response to the crisis, thereby increasing the hardship.”

[Economic Developments in the Palestinian Territories, Nov. 24, 2020]

As the World Bank is undoubtedly aware of the PA’s terror reward payments, why does it automatically assume that the services to be affected by the PA’s cash shortfall are the “medical” and “social” expenditures? Why did the World Bank not categorically suggest that in order to bridge, even partially, the expected funding shortfall, that the PA abolish its terror reward program? Such a recommendation would not only be fiscally sound but have met the moral imperative.

A 2007 World Bank report referred to the PA’s payments to the terrorist prisoners and released prisoners saying that it is “the most generous PA program. It is also the most expensive social protection program, and is second only to public pensions in terms of the resources devoted.” [West Bank and Gaza Public Expenditure Review : From Crisis to Greater Fiscal Independence, Volume 2 - https://openknowledge.worldbank.org/handle/10986/7807]. While the World Bank refers to these payments as “social protection”, in reality, as exposed by Palestinian Media Watch, the payments are made solely on the basis of participation in terror and have no need-based criteria.

As regards the PA payments to the wounded terrorists and the families of the dead terrorists, the same World Bank report noted, that, “As a safety net program, the Fund for Families of Martyrs and the Injured is generous.” Damningly, the report continued saying, “While some assistance should be directed to this population, the level of resources devoted to the Fund for Martyrs and the Injured does not seem justified from a welfare or fiscal perspective.”

Since 2007, the resources allocated by the PA to its “Pay-for-Slay” program have continued to grow. In fact, as exposed by PMW, by 2018, 7.47% of the PA's entire operational budget for 2018 was allocated to the payment of salaries to terrorist prisoners, released terrorists, and payments to families of "Martyrs" and wounded.

When the World Bank highlighted only the gut wrenching PA services that would be affected, it not only failed to perform its duty as an independent and impartial assessor and advisor, it also once again demonstrated the moral bankruptcy that has plagued the organization for years. In past World Bank reports, when it believes an Israeli policy is mistaken, it feels quite free to recommend Israel make far-reaching changes. For example, the World Bank has consistently recommended that Israel remove the checkpoints Israel created in order to prevent the free movement of Palestinian terrorists into Israel, but never once criticized the PA for paying financial rewards to the terrorists. In the latest report, the World Bank went as far as making recommendations that would require Israel to change its legislation, but shockingly, there was not one word recommending that the Palestinian Authority save hundreds of millions of dollars by ceasing its terror reward program.