ODI's Study of West Bank and Gaza Civil Society Finds "A Humanitarian Sector in Debt"

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Date: 
September 11, 2018

A paper published by the Humanitarian Policy Group of the Overseas Development Institute, A humanitarian sector in debt: Counter-terrorism, bank de-risking and financial access for NGOs in the West Bank and Gaza, reveals the crippling effects that bank derisking has had on local humanitarian and development organizations in the West Bank and Gaza. This study draws on findings from interviews conducted in 2017 - 2018 and investigates the various coping strategies that Palestinian civil society members are using to compensate for lack of financial access and growing debt in a place where humanitarian assistance is crucial.

The paper examines the blocks to financial access for Palestinian NGOs: internationally, regionally and locally. Internationally, these restrictions are an unintended and disregarded consequence of counterterrorism measures. Hamas, which took control of Gaza following elections in 2006, is considered a terrorist organization by a number of Western and Middle Eastern countries. This designation introduces regulatory requirements, particularly in relation to anti-money laundering and counter-terrorist financing, which are often too burdensome for local Palestinian NGOs to navigate and which have prompted restrictions on the transfer of funds to NGOs in the West Bank and Gaza. Additionally, the study explains that a number of Arab governments in the region have placed their own restrictions on the transfer of funds to Palestinian NGOs to avoid any reputational threats related to engagement with Hamas. This paper argues that while regulators are trying to improve their guidance, a number of governments and authorities in the Middle East are misusing capitalizing on the counterterrorism discourse to increase their control of the non-profit sector. Finally, on a local level, NGOs are impacted by administrative burdens introduced by the Palestinian Authority in Ramallah, and Hamas in Gaza.

In response to these restrictions, Palestinian NGOs have implemented certain coping measures in order to provide much needed humanitarian assistance to the West Bank and Gaza. These include limiting transactions in US dollars, registering NGOs in Europe, or using ‘under the table’ opaque channels for transferring funds. NGOs find themselves in a situation where often, the only financial channel available to them is carrying cash across borders, the study finds. These risky and cumbersome methods have led to a Palestinian civil society which is “starving” and in debt.

The study concludes with a collection of succinct recommendations addressed to each vested interest: international NGOs, international financial regulators, the Palestinian authority in Ramallah, local Palestinian NGOs and the international community. The author calls on international civil society partners to come together to advocate for coherent financial regulations and to expand collaboration with local Palestinian NGOs: “Palestinian non-profit professionals are the experts on the needs of their communities and they know their context better.” Finally, the paper warns that the humanitarian situation in the West Bank and Gaza needs a political solution, calling on international actors to press the Israeli government to lift the blockade and allow the Palestinian people to live with dignity.

Read the full report.