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The Palestinian Authority’s Self-Inflicted Fiscal Crisis, and What the U.S. Can Do about It

April 19 2019

On Saturday, a new cabinet was sworn into office in Ramallah, with the newly appointed prime minister Mohammad Shtayyeh at its head. Shtayyeh and his colleagues face a widespread perception among Palestinians that the Palestinian Authority (PA) is corrupt, alongside a worsening financial crisis. Ultimately, that crisis can be resolved only by the PA’s president, Mahmoud Abbas, who has brought it about in the first place through his insistence on rewarding terror with cash. Katherine Bauer and Ghaith al-Omari write:

[I]n February, Israel moved to withhold $138 million annually, or $11.5 million a month (roughly 6 percent of the tax revenues it collects on the PA’s behalf), in [response to] the PA’s payments to the families of prisoners [in Israeli jails] and “martyrs”—a practice about which Abbas has refused to negotiate. In response, the PA has refused to accept the remaining portion of the transfer so long as Israel continues to withhold any of it. This has reportedly led the PA to adopt strict austerity measures, including payment of only partial salaries to government employees in both March and April. . . .

[T]he PA seems to be calculating that concerns over instability in the PA and the West Bank will prompt Israel to reverse its decision. Such a reversal, in addition to stabilizing PA finances, would give Abbas a political victory. Yet while effective in the past, the same approach is less certain to work this time around. For Israel, the basis for partial withholding of the funds is enshrined in the law and enjoys Israeli consensus across the political spectrum. Moreover, . . . the PA’s decision to reject any partial transfer from Israel struck some [countries that might make up for the shortfalls] as grandstanding, eliciting neither sympathy nor support. . . .

The fact that the PA has suspended formal contacts with the U.S., argue Bauer and Omari, does not mean Washington has no cards to play:

[T]he Trump administration can engage the donor community—already alarmed by the state of PA governance—to introduce measures to bring stability to the West Bank and the PA. [It] can focus on sharpening donor pressure to dissuade the PA from grandstanding on the tax-clearance matter and to address specific issues to steady the ship. The latter includes restoring budget transparency to bolster donor confidence, stabilize budget flows, improve revenue generation, . . . and minimize additional arrears. This will require the United States to commit funds to international efforts to stabilize the PA, but would not [involve] resumption of direct U.S. funding to the Palestinians.

The Trump administration has defined Israeli-Palestinian peace as a goal to be achieved through the possibly imminent release of an American peace plan. Failure to address the immediate fiscal and governance challenges facing the PA may render the larger U.S. objective moot.

Read more at Washington Institute for Near East Policy

More about: Mahmoud Abbas, Palestinian Authority, Peace Process, U.S. Foreign policy

The Summary: 10/7/20

Two extraordinary events demonstrate something important about Israel’s most fervent adversaries. One was a speech given at something called The People’s Forum (funded generously by Goldman Sachs), which stated, “When the state of Israel is finally destroyed and erased from history, that will be the single most important blow we can give to destroying capitalism and imperialism.”

The suggestion that this tiny state is the linchpin of a global, centuries-old phenomenon like capitalism goes well beyond anything resembling rational criticism. Even if Israel were guilty of genocide, apartheid, and oppression—which of course it is not—it would not follow that its destruction would help end capitalism or imperialism.

The other was an anti-Israel protest that took place in front of New York City’s Memorial Sloan Kettering Cancer Center, deemed “complicit” in Israel’s evils. At organizers’ urging, participants shouted their slogans at kids in the cancer ward, who were watching from the windows. Given Hamas’s indifference toward the lives of Gazan children, such callousness toward non-Palestinian children from Hamas’s Western allies shouldn’t be surprising. The protest—like the abovementioned speech—deliberately conveyed the message that Israel is the ultimate evil and its destruction the ultimate good, cancer patients be damned.

The fact that Israel’s adversaries are almost comically perverse does not mean that they can be dismissed. If its allies fail to understand the obsessive and irrational hatred that it faces, they cannot effectively help it defend itself.

Read more at Mosaic