Foreign Assistance: U.S. Assistance to the West Bank and Gaza for Fiscal Years 2010 and 2011

The 2003 Roadmap for Peace, a performance-based agreement, calls for an independent Palestinian state coexisting peacefully with the state of Israel. From fiscal years 2001 through 2009, the United States provided approximately $3 billion in bilateral and multilateral assistance to the West Bank and Gaza, focused on developing the Palestinian economic, social services, and civil society sectors, as well as strengthening the processes, governance, and security-providing capacity of Palestinian Authority (PA) institutions. Since June 2007, when Hamas, a U.S.-designated terrorist organization, seized control of Gaza, the United States has directed most of its nonhumanitarian assistance to the West Bank. For fiscal years 2010 and 2011, U.S. funding for the Economic Support Fund (ESF) portion of U.S. assistance to the West Bank and Gaza totaled almost $789 million. The ESF promotes the economic and political foreign policy interests of the United States by providing assistance to allies and countries in transition to democracy, supporting Middle East peace negotiations, and financing economic stabilization programs. The U.S. Agency for International Development (USAID) is primarily responsible for administering ESF appropriations for the West Bank and Gaza. USAID officials stated that fiscal years 2010 and 2011 ESF appropriations support priority needs identified in the Palestinian National Authority's National Development Plan 2011-2013, Establishing the State, Building Our Future, and through consultations between PA and USAID officials. The Congress directed that the Comptroller General of the United States report to the Congress on U.S. assistance to the West Bank and Gaza provided through ESF. To determine the status of fiscal years 2010 and 2011 appropriations, obligations, and expenditures of the ESF assistance to the West Bank and Gaza, the Government Accountability Office (GAO) reviewed appropriations legislation, including related budget justification documents, and financial data provided by USAID's West Bank and Gaza mission in Tel Aviv, Israel. The mission provided data on obligations of all ESF funds for the West Bank and Gaza from the fiscal years 2010 and 2011 annual appropriations, as of April 30, 2012, and on disbursements as of March 31, 2012. The GAO found that USAID obligated and expended most of the ESF assistance to the West Bank and Gaza appropriated for fiscal years 2010 and 2011. Of the total $789 million provided for West Bank and Gaza assistance over the 2 years, USAID had obligated 96 percent and expended 70 percent by the end of April 2012. USAID obligated about $410 million for 26 development projects and $350 million in budget support to the PA over the 2 fiscal years. USAID provided the most assistance to the water resources and infrastructure sector, about 56 percent of total project obligations. The Palestinian territories, comprising the West Bank and Gaza, cover about 2,400 square miles and have a combined population of 4.3 million people. The PA and Israel administer areas within the West Bank, and the Hamas-controlled de facto authorities operate in Gaza. The PA is responsible for providing basic services, including healthcare, education, and security, to the Palestinian population. However, the PA faces significant challenges in providing these services due to the Israeli occupation and the economic blockade of Gaza.