Aid that costs Gaza more

Reaching far into the billions, international pledges for the reconstruction of Gaza - at the donor conference held at Sharm Al Shaikh, Egypt in March - were simply unprecedented. Many pledges were "rolling" from previous pledges that had not yet been disbursed. Most funds are directed to international UN-run mechanisms and local NGOs that are permitted to work with the Ramallah-based Palestinian National Authority (PNA). The United States for example pledged $900 million (Dh3.3 billion), $600 million of which was destined for Ramallah and not Gaza.

This is one example of how donor aid is increasing competition over who will be in charge of reconstruction, thus determining how it will be carried out. Most European states contribute generously to the Ramallah-led initiatives. The banking system for instance, presented by Prime Minister Salam Fayyad, would funnel funds to international bodies within Gaza to avoid the Hamas-run administration there.

The United Nations Relief and Works Agency for Palestinian refugees (UNRWA) has become a veritable beast, and is essentially replacing the state structure by providing food and jobs to thousands of refugees. Furthermore, a large portion of Palestinians are refugees.

According to one UN official in occupied Jerusalem, donor aid to the Palestinians is "breaking new ground with Gaza". The official said multiple UN agencies were essentially "fire brigades for the international community".

As ever, the race for reconstruction in Gaza is largely impeded by the lack of access for materials to enter the Gaza Strip.

The World Fund Programme (WFP) claims an average of 100 trucks enter the different eastern crossing points of Gaza every day, but this number varies and pales in comparison to the 500 truck benchmark established in the Agreement on Movement and Access (AMA) signed by Israel in November 2005.

The AMA had ambitious plans to refurbish the Rafah international airport, reconstruct the Gaza ports, and link Gaza to the West Bank with a bus-shuttling system. The only buses from Gaza carry cancer patients to the Israeli or Palestinian hospitals in Occupied Jerusalem.

Other buses from the West Bank carry medical workers to the six Palestinian hospitals in occupied Jerusalem. Israel recently banned all Palestinian medication coming from the West Bank to the six hospitals, which implies further division from Occupied Jerusalem and greater dependence on Israeli products.

Following donor aid into Gaza is a windy road as well. All goods are brought in through Israel, which means a high profit for Israeli companies. Palestinian distributors also contact their Israeli counterparts to acquire extra merchandise. Sometimes this is brought in with the humanitarian aid, sometimes on its own trucks. One thing is for sure - both are feeding the black market.

Since the Hamas-run government is avoided at all costs by the international community, an intense and highly lucrative tunnel business has flourished along the southern border with Egypt.

Called the 'golden ghetto', all sorts of goods all imported and taxed by Hamas, like cigarettes. On the road to Gaza city, called Salah Al Deen Street, a small pick-up truck carried transparent blue plastic cylinder bags full of shoes - cylindrical to slide through the tunnels.

Another facet of the black market is the resale of humanitarian packages. Beneficiaries may have sufficient food staples at home and will sell extra supplies so that they can buy other necessities they don't have.

To these simple survival tactics of the rather confusing Gazan economy, one can add the humanitarian 'cluster' system, which essentially provides higher levels of coordination by specifying areas of intervention.

Moreover, by avoiding the de facto government, humanitarian donors are further dividing the Palestinians and weakening actual assistance structures, as well as in many ways actually replacing state structures.

According to some Palestinians working for other UN-agencies and international NGOs, the clusters can be positive if temporary, but not beneficial for long-term development.

Foreign aid in this sense is not helping to integrate development and thus is feeding the chronic crisis of Gaza. Ironically, as another UN official pointed out - Palestinians are the "largest per capita recipients in the world".