Palestinians in crisis after Israel, US moves
ramallah — The Palestinian Authority faces a suffocating financial crisis after deep US aid cuts and an Israeli move to withhold tax transfers, sparking fears for the stability of the West Bank.
The authority, headed by President Mahmoud Abbas, announced a package of emergency measures on March 10, including halving the salaries of many civil servants.
The United States has cut more than $500 million in Palestinian aid in the last year, though only a fraction of that went directly to the PA.
The PA has decided to refuse what little US aid remains on offer for fear of civil suits under new legislation passed by Congress.
Israel has also announced it intends to deduct around $10 million a month in taxes it collects for the PA
in a dispute over payments to the families of prisoners in Israeli jails.
In response, Abbas has refused to receive any funds at all, labelling the Israeli reductions theft. That will leave his government with a monthly shortfall of around $190 million for the length of the crisis.
The money makes up more than 50 per cent of the PA’s monthly
revenues, with other funds coming from local taxes and foreign aid.
While the impact of the cuts is still being assessed, analysts fear it could affect the stability of the occupied West Bank.
“If the economic situation remains so difficult and the PA is unable to pay salaries and provide services, in addition to continuing (Israeli) settlement expansion it will lead to an explosion,” political analyst Jihad Harb said.
Abbas cut off relations after President Donald Trump declared occupied Jerusalem Israel’s capital in December 2017. The Israeli government, strongly backed by the US government, has since sought to squeeze Abbas.
Abbas recently accused the Israeli government of causing a “crippling economic crisis in the Palestinian Authority”. Finance Minister Shukri Bishara announced earlier this month he had been forced to “adopt an emergency budget that includes restricted austerity measures.”
Government employees paid over $555 will receive only half their salaries until further notice. —