Identifier
Created
Classification
Origin
02JERUSALEM143
2002-01-17 15:47:00
CONFIDENTIAL
Consulate Jerusalem
Cable title:  

READYING PECDAR TO FILL THE "HAMAS GAP"

Tags:  EAID ECON PTER KWBG 
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O 171547Z JAN 02
FM AMCONSUL JERUSALEM
TO SECSTATE WASHDC IMMEDIATE 6438
INFO ARAB ISRAELI COLLECTIVE IMMEDIATE
C O N F I D E N T I A L SECTION 01 OF 03 JERUSALEM 000143 

NEA FOR BURNS/SATTERFIELD; NSC FOR REIDEL AND JOHNSON

E.O. 12958: DECL: 01/16/12
TAGS: EAID ECON PTER KWBG
SUBJECT: READYING PECDAR TO FILL THE "HAMAS GAP"

CLASSIFIED BY CONSUL-GENERAL RONALD SCHLICHER PER 1.5 (D).

C O N F I D E N T I A L SECTION 01 OF 03 JERUSALEM 000143

NEA FOR BURNS/SATTERFIELD; NSC FOR REIDEL AND JOHNSON

E.O. 12958: DECL: 01/16/12
TAGS: EAID ECON PTER KWBG
SUBJECT: READYING PECDAR TO FILL THE "HAMAS GAP"

CLASSIFIED BY CONSUL-GENERAL RONALD SCHLICHER PER 1.5 (D).


1. (C) SUMMARY: PECDAR DIRECTOR MOHAMMAD SHTAYYEH
REPORTS THAT HE HAS ARAFAT'S BLESSING TO ESTABLISH PECDAR
RELIEF PROGRAMS THAT WOULD FILL THE ASSISTANCE GAP
RESULTING FROM THE PA'S CLOSURE OF HAMAS-AFFILIATED
CHARITIES. SHTAYYEH WELCOMED U.S. EFFORTS TO ENCOURAGE
GULF COUNTRIES TO STEER CHARITABLE CONTRIBUTIONS AWAY
FROM HAMAS, AND WAS HAPPY TO HEAR THAT THE USG HAS
IDENTIFIED PECDAR HAS A CONSTRUCTIVE ALTERNATIVE. HE WAS
CONFIDENT THAT PECDAR WAS UP TO THE TASK, CITING ITS 235-
PERSON STAFF AND A SOLID REPUTATION FOR TRANSPARENCY AND
EFFECTIVENESS. SHTAYYEH IS PLANNING TO ESTABLISH A NEW
DEPARTMENT OF POVERTY ALLEVIATION AND RELIEF WITHIN
PECDAR THAT WOULD FOCUS ON WELFARE ASSISTANCE (PROVIDING
FOOD, CASH, AND HOUSING),JOB CREATION VIA MICRO-
GRANTS/LENDING AND A JOB PLACEMENT/SUBSIDY PROGRAM.
SHTAYYEH ARGUED STRONGLY THAT THE BEST WAY TO PUT HAMAS
OUT OF THE WELFARE BUSINESS IS TO PROVIDE BETTER SERVICES
THROUGH OTHER CHANNELS. END SUMMARY.


POSITIONING PECDAR TO FILL THE HAMAS GAP
--------------


2. (C) IN A JANUARY 16 CONVERSATION WITH ECON CHIEF,
MOHAMMED SHTAYYEH -- DIRECTOR OF THE PALESTINIAN ECONOMIC
COUNCIL FOR DEVELOPMENT AND RECONSTRUCTION (PECDAR) --
REPORTED THAT HE MET WITH ARAFAT SOON AFTER THE PA'S
DECISION TO CLOSE THE HAMAS CHARITIES. DURING THAT
MEETING, SHTAYYEH NOTED THAT THE PA'S DECISION TO CLOSE
HAMAS-AFFILIATED CHARITIES AND OTHER INSTITUTIONS
THREATENS TO CREATE A SO-CALLED "HAMAS GAP," AS EMERGENCY
RELIEF AND OTHER ASSISTANCE PROVIDED BY THESE
INSTITUTIONS ENDS. SHTAYYEH SAID HE HAD ADVOCATED WITH
ARAFAT THAT THE PA COULD NOT CLOSE THE CHARITIES WITHOUT
ENSURING THAT BENEFICIARIES CONTINUED TO RECEIVE
ASSISTANCE. ARAFAT HAD AGREED AND ASKED FOR A PROPOSAL,
WHICH SHTAYYEH HAD PROVIDED IN THE FORM OF A BRIEF PAPER.
ARAFAT HAD APPROVED THE PAPER AND INSTRUCTED THAT IT
SHOULD BE DISTRIBUTED TO MINISTER FOR LOCAL GOVERNMENT
SA'EB EREKAT AND MINISTER FOR NGO AFFAIRS HASSAN ASFOUR.


3. (C) SHTAYYEH REPORTED THAT ASFOUR HAD SUBSEQUENTLY
APPROACHED HIM TO SAY THAT HE WAS "PLEASED" WITH THE
INITIATIVE, BUT ALSO HAD SOME IDEAS OF HIS OWN. IN
PARTICULAR, ASFOUR HAD STRESSED THE NEED TO WORK WITH

NGOS IN PROVIDING RELIEF. MINISTER OF SOCIAL AFFAIRS
INTISSAR AL-WAZIR (UMM JIHAD) HAD ALSO CALLED HIM AND HAD
EXPRESSED CONCERN THAT SHTAYYEH WOULD BE IMPINGING ON THE
MINISTRY'S OWN RELIEF EFFORTS. SHTAYYEH HAD ASSURED HER
THAT HE WOULD WORK CLOSELY WITH THE MINISTRY. SHTAYYEH
ACKNOWLEDGED THAT THERE WOULD LIKELY BE ONGOING TURF
ISSUES NOT ONLY WITH THESE PA MINISTRIES BUT ALSO WITH
EXISTING (NON-HAMAS) NGOS. HE HOPED PECDAR COULD OPERATE
AS A KIND OF BROKER BETWEEN DONORS, THE MINISTRY OF
SOCIAL AFFAIRS (WHO WOULD PROVIDE LISTS OF WELFARE CASES)
AND NGOS AND MUNICIPALITIES WHO WOULD BE INVOLVED IN
IMPLEMENTING PROGRAMS. HE ALSO HOPED THAT OVER TIME
PECDAR COULD BECOME A CENTRALIZED VEHICLE FOR CHANNELING
ASSISTANCE FROM ZAKAT COMMITTEES (RESPONSIBLE FOR
COLLECTING AND DISBURSING ISLAMIC ALMS).


4. (C) DESPITE THE FACT THAT PECDAR HAS BUILT ITS
REPUTATION ON IMPLEMENTATION OF CONSTRUCTION PROJECTS,
NOT SOCIAL WELFARE AND EMERGENCY RELIEF, SHTAYYEH ARGUED
THAT PECDAR WAS WELL POSITIONED TO FILL THE HAMAS GAP.
IT HAD A 235-PERSON STAFF, HE SAID, AND SINCE 1995 HAD
DISBURSED OVER $110 MILLION IN EMPLOYMENT GENERATION
PROJECTS FOR A VARIETY OF DONORS INCLUDING THE WORLD
BANK, GERMANY, AND SWEDEN. IT WAS ALSO IMPLEMENTING A
COMMUNITY DEVELOPMENT PROGRAM WITH THE WORLD BANK AND
MUCH OF ITS CONSTRUCTION WORK HAD FOCUSED ON SMALL-SCALE
PROJECTS RELATING TO SCHOOLS AND CLINICS.

WHAT IF A MILLION DOLLARS ARRIVED TOMORROW?
--------------


5. (C) ECON CHIEF INFORMED SHTAYYEH THAT THE USG HAS
URGED GULF COUNTRIES TO CONSIDER PECDAR AS A POLITICALLY
CONSTRUCTIVE CHANNEL FOR EMERGENCY ASSISTANCE TO THE
PALESTINIANS. SHTAYYEH WAS APPRECIATIVE, AND WAS
CONFIDENT THAT IF NEW FUNDS FROM THE GULF ARRIVED HE
WOULD BE POSITIONED TO CHANNEL THE ASSISTANCE TOWARD
RELIEF ACTIVITIES. ASKED WHAT HE WOULD DO IF A MILLION
DOLLARS ARRIVED TOMORROW, HE SAID HE WOULD FOCUS ON
EMERGENCY HOUSING AND FOOD AND CASH ASSISTANCE IN
SOUTHERN GAZA. AS A FIRST STEP, IN ORDER TO ASSESS THE
DIMENSIONS OF THE CHALLENGE, SHTAYYEH HAD ALREADY ASKED
OFFICIALS IN THE SECURITY SERVICES TO PROVIDE HIM WITH A
LIST OF THE BENEFICIARIES OF THE HAMAS CHARITABLE
INSTITUTIONS THAT HAD BEEN SHUT DOWN.


A THREE PRONGED STRATEGY FOR PECDAR
--------------


6. (C) LOOKING TO THE MEDIUM AND LONGER-TERM, SHTAYYEH
SAID HE HAD BEGUN DESIGNING A NEW PECDAR DEPARTMENT THAT
WILL FOCUS ON POVERTY ALLEVIATION AND RELIEF. THE
DEPARTMENT WOULD FOCUS ON THREE AREAS, WITH AN INITIAL
EMPHASIS ON EMERGENCY RELIEF. MOST OF HAMAS' EFFORTS
OVER THE LAST 15 MONTHS HAVE BEEN IN THIS AREA, HE SAID,
INCLUDING THE PROVISION OF FOOD PACKAGES AND CASH TO THE
NEEDY. FOR STARTERS, SHTAYYEH HOPED TO ASSIST FAMILIES
IN RAFAH WHOSE HOMES WERE DESTROYED LAST WEEK BY THE IDF.
THE ARAB LIBERATION FRONT (A MINOR PALESTINIAN POLITICAL
PARTY) HAD ALREADY BEEN IN RAFAH OVER THE LAST WEEK
DISTRIBUTING IRAQI MONEY TO AFFECTED FAMILIES, HE SAID.
ONE AREA WHERE HAMAS HAD BEEN QUITE EFFECTIVE FOR OVER A
DECADE WAS IN PROVIDING EMERGENCY HOUSING TO FAMILIES
WHOSE HOMES HAD BEEN DESTROYED, SHTAYYEH ADDED, AND HE
HOPED THAT PECDAR WOULD BE ABLE TO SUPPLANT SUCH
ASSISTANCE. THERE WERE FAMILIES IN SOUTHERN GAZA WHO HAD
BEEN LIVING IN TENTS FOR FIVE OR SIX MONTHS, HE NOTED,
AND GIVEN FUNDING PECDAR COULD RENT APARTMENTS FOR THEM.


7. (C) SECONDLY, THE NEW PECDAR DEPARTMENT WOULD FOCUS
ON JOB CREATION VIA MICRO-PROJECTS. THIS WOULD ENTAIL
OFFERING SMALL GRANTS OF UP TO $2000 TO NEEDY FAMILIES TO
HELP THEM, FOR EXAMPLE, TO BUY SEWING MACHINES OR FARM
ANIMALS TO INCREASE THEIR INCOMES. OTHERS WOULD BE
PROVIDED TRAINING TO ENABLE THEM TO QUALIFY FOR SLIGHTLY
LARGER AMOUNTS VIA MICRO-LENDING PROGRAMS OFFERED BY
USAID AND THE PALESTINIAN DEVELOPMENT FUND. THIRDLY,
PECDAR WOULD INITIATE A JOB PLACEMENT-SUBSIDY PROGRAM,
WHEREBY EMPLOYERS WOULD BE OFFERED A ONE-YEAR, 50 PERCENT
SUBSIDY ON THE SALARIES OF NEW EMPLOYEES.


HOW TO PUT HAMAS OUT OF THE CHARITY BUSINESS
--------------


8. (C) SHTAYYEH ARGUED THAT, OVER THE LONG RUN, THE BEST
WAY TO BEAT HAMAS WAS NOT TO SHUT DOWN THEIR CHARITIES
BUT TO OUT-COMPETE THEM BY PROVIDING BETTER, ALTERNATIVE
SERVICES. MOST PALESTINIANS ONLY TURNED TO HAMAS
SERVICES IF THERE WAS NO ALTERNATIVE, HE SAID, OBSERVING
THAT HAMAS WAS OPERATING KINDERGARTENS IN REMOTE AREAS
FOR PRECISELY THIS REASON. AT THE SAME TIME, ANY DONOR-
FUNDED EFFORT TO SUPPLANT HAMAS SHOULD NOT BE PUBLICLY
DESCRIBED AS SUCH. HAMAS CHARITIES SHOULD BE MADE
IRRELEVANT VIA A QUIET, APOLITICAL, LONG-TERM, SYSTEMATIC
PUBLIC WELFARE AND RELIEF EFFORT. WHEN ECON CHIEF
SUGGESTED THAT HE CONSIDER A FUND-RAISING TOUR IN THE
GULF, SHTAYYEH AGREED, BUT STRESSED THAT IT SHOULD NOT BE
PUBLICLY BILLED AS AN ANTI-HAMAS EFFORT. FOR ONE THING,
A FUND-RAISING EFFORT PUBLICLY IDENTIFIED WITH SUCH A
POLITICAL OBJECTIVE WOULD LIKELY INSPIRE LESS GENEROSITY
IN THE GULF THAN ONE THAT FOCUSED SIMPLY ON THE NEEDS.

COMMENT
--------------


9. (C) ECON CHIEF SPOKE SEPARATELY WITH NORWEGIAN
REPRESENTATIVE GEIR PEDERSEN WHO INDICATED NORWAY'S
WILLINGNESS TO PROVIDE TECHNICAL ASSISTANCE TO PECDAR TO
HELP IT RETOOL FOR ITS NEW ROLE. PEDERSEN SPOKE
SUBSEQUENTLY WITH SHTAYYEH, WHO WELCOMED THE OFFER.
PEDERSEN ENVISAGES THAT THE HAMAS GAP WILL BE A CENTRAL,
IF IMPLICIT, ISSUE AT THE AD HOC LIAISON COMMITTEE (AHLC)
MEETING PLANNED FOR EARLY MARCH, AND HE HAS URGED
SHTAYYEH TO PREPARE A PRESENTATION FOR THAT MEETING.


10. (C) DESPITE THE POTENTIAL TURF ISSUES OF WHICH
SHTAYYEH IS FULLY AWARE, WE ARE ENCOURAGED BY SHTAYYEH'S
EFFORTS SO FAR AND REMAIN CONVINCED THAT PECDAR IS INDEED
THE BEST OPTION FOR REDIRECTING ARAB ASSISTANCE AWAY FROM
HAMAS CHARITIES. PECDAR HAS A STRONG REPUTATION FOR
FINANCIAL TRANSPARENCY AND EFFECTIVENESS, AND HAS
SUCCESSFULLY IMPLEMENTED NUMEROUS PROJECTS FOR THE WORLD
BANK AND EUROPEAN DONORS. IT IS NOT AN OFFICIAL PA
ENTITY, WHICH WILL LIKELY BE ADVANTAGE IN ATTRACTING
ASSISTANCE FROM GULF DONORS. AT THE SAME TIME, SHTAYYEH
OPERATES IN THE PA ORBIT AND WILL IMPLEMENT THE PA LINE
AS HE DOES HIS BEST TO DRY UP THE MARKET FOR HAMAS
CHARITY. HOWEVER, SHTAYYEH IS ALSO FAMED AS AN "EMPIRE
BUILDER" AND THE NORWEGIANS AND WE WILL HAVE TO WORK WITH
HIM TO DESIGN A PROGRAM THAT WORKS EFFECTIVELY AND
COLLEGIALLY WITH LEGITIMATE PALESTINIAN NGOS. WE ALSO
TAKE SHTAYYEH'S POINT THAT WE WILL PROBABLY MAKE HIS
FUNDRAISING AND IMPLEMENTATION JOB THAT MUCH MORE
DIFFICULT IF WE PAINT IT PUBLICLY AS A POLITICAL, ANTI-
HAMAS INITIATIVE -- BUT WE WILL CONTINUE TO MAKE IT CLEAR
TO SHTAYYEH THAT OUR POLICY IS THAT THE HAMAS
INSTITUTIONS MUST BE, AND REMAIN, CLOSED, NOT SLOWLY MADE
IRRELEVANT BY PECDAR'S AND OTHER EFFORTS.


SCHLICHER