Palestinian National Fund

Palestinian National Fund. Established in 1964, it serves as the central treasury and primary financial arm of the Palestine Liberation Organization. Its creation was mandated by the foundational charter of the Palestine National Council to manage the financial resources necessary for the national movement. The fund has played a critical role in financing the political and institutional activities of the Palestinian Authority and various PLO departments.

History

The fund was formally established during the first session of the Palestine National Council in East Jerusalem following a decision by the Arab League. Its early financial backbone was significantly strengthened by a resolution from the 1964 Arab League summit in Cairo, which instituted a tax on the salaries of Palestinian workers in several Arab states. Throughout the 1970s and 1980s, it received substantial contributions from oil-rich nations like Saudi Arabia, Kuwait, and Libya, especially after pivotal events such as the 1973 oil embargo. The signing of the Oslo Accords in the 1990s marked a major shift, as the fund began channeling resources to support the nascent Palestinian Authority in the West Bank and Gaza Strip.

Structure and governance

The fund's supreme authority is the Palestine National Council, which elects its board of directors. Day-to-day management is overseen by a chairman, historically a figure of significant political weight within the Palestine Liberation Organization. The organizational structure includes specialized departments for budgeting, auditing, and investment oversight. Its operations and financial decisions are intrinsically linked to the political leadership of the Palestinian National Authority and the executive committee of the Palestine Liberation Organization.

Functions and activities

Its primary function is to finance the budget of the Palestine Liberation Organization and its constituent groups, including the political office of Mahmoud Abbas and institutions like the Palestinian Broadcasting Corporation. The fund allocates resources for social welfare programs, including payments to the families of prisoners and martyrs through the Palestinian Ministry of Social Affairs. It also provides budgetary support to key Palestinian Authority ministries and has historically funded educational and healthcare projects administered by the United Nations Relief and Works Agency.

Financial operations

Revenue historically flowed from compulsory levies on Palestinian expatriates, direct donations from Arab governments, and investments in a diverse portfolio that included companies like the Arab Palestinian Investment Company and the Cairo-Amman Bank. Following the Oslo Accords, a significant portion of its budget became dependent on tax revenues collected by Israel and transferred to the Palestinian Authority. The fund's financial statements are subject to review by internal auditors and are presented to the Palestine National Council, though its full investment holdings and transactions have often been opaque.

Controversies and challenges

The fund has faced persistent allegations of financial mismanagement and a lack of transparency, with critics citing insufficient oversight from the Palestine National Council. Its operations have been severely disrupted by political divisions, particularly after the 2007 conflict between Fatah and Hamas, which complicated revenue flows to the Gaza Strip. International scrutiny increased following the Al-Aqsa Intifada, with entities like the United States Department of the Treasury imposing restrictions on certain financial channels. The fund also contends with the ongoing fiscal crisis stemming from the Israeli occupation of the West Bank and intermittent withholding of tax revenues by Israel.