38 Middle East and Africa The EconomistJanuary 27th 20181A
TRIP billed as a show of support for
Christians had a noticeable lack of
them. On January 22nd Mike Pence, Amer-
ica’s vice-president, landed in Israel on the
last legof a three-country jaunt. Originally
scheduled for December, it was delayed
after Donald Trump made the controver-
sial decision to recognise Jerusalem as Isra-
el’s capital. When Mr Pence arrived at last,
the Palestinians blackballed him. So did
Christian leaders in Egypt and Jordan. Mr
Pence, a devout Christian himself, did not
even set foot in a church in the Holy Land.
No one was sure why he came. His
meetings with Israeli and Arab leaders
were routine, save for a speech in the Knes-
set, where he announced that America
would move its embassy to Jerusalem by
the end of 2019. The trip seemed to be
about domestic politics: for Mr Pence, a
nod to his evangelical base; for Binyamin
Netanyahu, Israel’s scandal-plagued prime
minister, a chance to look like a statesman.
And the Palestinians got to snub an ad-
ministration they now see as biased. Apart
from Jerusalem, they are also fuming over
cuts to the UN Relief and Works Agency
(UNRWA), which aids Palestinian refugees.
In January Mr Trump suspended $65m,
about half of America’s next scheduled
payment, plus$45m in emergency food aid
that it had pledged. The cutswill bite. In
2016 America was the agency’s largest do-
nor. It paid 30% ofUNRWA’s budget of
$1.2bn, more than twice as much as the EU.
The agency was founded in 1949 to offer
temporary aid to 750,000 Palestinians dis-
placed by the creation of Israel. Like so
much else in this intractable conflict, it has
become permanent. Because the UN
deems the descendants of Palestinian refu-
gees to be refugees, too, their number has
swelled to more than 5m.
In Lebanon, most lack citizenship and
live in grim camps. The government says it
cannot afford to give them social services;
they are also barred from some jobs. Some
Lebanese fear that granting citizenship to
so many Sunni Muslims would upset their
country’s delicate sectarian balance. Those
fears may be overblown: a census released
in December found that only about
175,000 Palestinian refugees still live in
Lebanon, one-third of previous estimates.
They have fared better in Jordan, but
400,000-plus live in camps.
Many still hope to go back to their an-
cestral homes. This “right of return” is
among the conflict’s most emotive issues.Israel, worried about its own demography,
will permit only a token homecoming un-
der a future peace deal. In private, Palestin-
ian leaders doubt their state could handle a
huge influx of new citizens. Israel and its
defenders often faultUNRWA for letting
Palestinians nurture this distant hope.Yet the agency also lets Israel indulge a
fantasy. Since 2007 it has maintained a
punishing military blockade on Gaza (as
has Egypt). The consequences have been
stark. Unable to export goods, hundreds of
Gazan factories and farms have closed.
Most of Gaza’s2m people have been un-
able to leave their tiny enclave for a de-
cade. Water is undrinkable and electricity
available only for a few hours a day. Even
the Israeli army now reckons the blockade
is ineffective at best, counter-productive at
worst. Ironically, foreign aid letsit persist.
Half of Gaza’s people rely on UNRWA fo r
food, 262,000 students are enrolled in its
schools and its clinics handle more than
4m patient visits a year.
Pierre Krahenbuhl, UNRWA’s head,
calls America’scuts “abrupt and harmful”.
While Mr Pence was touring the region, the
agency launched an appeal called “dignity
is priceless.” It hopes to raise an extra
$500m. Yet there is little dignity to be
found in places like Gaza’s Shati camp,
where the smell of untreated sewage lin-
gers over the teeming alleyways. UNRWA
does admirable work in such places—liter-
ally keeping millions of people alive. It also
shields all parties from the consequences
of prolonging the conflict. 7Palestinian refugeesStripping the Strip
CAIRO
Is America wrong to cut aid to
Palestinian refugees?He has nothing left to loseD
EBATING the merits of the CFAfranc,
says Guy Marius Sagna, a Senegalese
activist, “is like discussingthe advantages
and disadvantages of slavery.” That is a ri-
diculous analogy. But the past year has
seen protests in several cities against the
currency, used by 14 countries in west and
central Africa and supported by France, the
former colonial power. One firebrand was
deported from Senegal after burning a CFA
franc note. A director of La Francophonie, a
union of French-speaking nations, was
suspended after writing an explosive arti-
cle on the topic. The agitators are few, but
they have hit a nerve.
To its critics, the CFAfranc is a colonial
anachronism; to its defenders, a bulwark
of stability. Established under French rule,
it is actually two distinct currencies. A cen-
tral African bloc, oil-soaked and despotic,
uses one; the other circulatesin eight
poorer, more open countries to the west
(see map). Both are pegged to the euro,
with convertibility guaranteed by France.
Countries in each zone pool their foreign-
exchange reserves, ofwhich half must be
deposited with the French treasury. Frenchdelegates sit on the central banks’ boards.
This peculiar system has brought stabil-
ity. Over the past 50 years inflation has av-
eraged 6% in Ivory Coast, which uses the
CFAfranc, and 29% in neighbouring Gha-
na, which does not. It eases trade with Eu-
rope, the region’sbiggest partner, and frees
foreign investors from the risks of ex-
change-rate fluctuations.
Where some see an anchor, others see a
millstone. To maintain the euro peg, notes
Ndongo Samba Sylla, a Senegalese econo-
mist, these very poor countriesmust track
the hawkish monetary policy of the Euro-Africa’s CFA francFranc exchange
DAKAR
A French-backed currency comes under fireGulf of GuineaATLANTIC
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