{"id":39209,"date":"2019-05-02T02:23:53","date_gmt":"2019-05-02T02:23:53","guid":{"rendered":"https:\/\/qatar-news.org\/qatarnewsEn\/?p=39209"},"modified":"2019-05-02T02:23:53","modified_gmt":"2019-05-02T02:23:53","slug":"palestinians-face-financial-crisis-as-us-prepares-mideast-plan","status":"publish","type":"post","link":"https:\/\/qatar-news.org\/qatarnewsEn\/?p=39209","title":{"rendered":"Palestinians face financial crisis as US prepares Mideast plan"},"content":{"rendered":"
\n

\nRAMALLAH:\u00a0Israel and the US are putting the financial squeeze on the Palestinian Authority (PA), where opposition to a long-awaited US peace plan and anger over Israeli sanctions remain strong.<\/p>\n

\nAnalysts see steep cuts in US aid to the Palestinians over the past year as an attempt to draw them toward a blueprint that Washington promises will have economic benefits but which the PA predicts will fall short of endorsing Palestinian statehood.<\/p>\n

\nAnd during Israeli Prime Minister Benjamin Netanyahu\u2019s successful re-election campaign, his right-wing government imposed sanctions that have pushed the Authority toward financial crisis.<\/p>\n

\nIn February, Israel announced it would cut by 5 percent the approximately $190 million in tax revenues it transfers to the Palestinian Authority each month from imports that reach the occupied West Bank and Gaza.<\/p>\n

\nThe deducted sum represents the amount of money paid by the Authority, which exercises limited self-rule in the West Bank, to families of Palestinians convicted and jailed by Israel for security offenses, including lethal attacks on Israelis. Palestinians hail their jailed brethren as heroes in a struggle for an independent state and their families as deserving of support.<\/p>\n

\nPalestinian President Mahmoud Abbas has refused to accept the partial tax remittances from Israel, saying the PA is entitled to all the money under interim peace deals.<\/p>\n

\nUnless the issue is resolved, the World Bank says, the Palestinians\u2019 financing gap could exceed $1 billion in 2019, putting further strain on an economy grappling with a 52 percent unemployment rate.<\/p>\n

\nAlready facing international donor fatigue, the Palestinians were dealt a heavy blow by the Trump administration\u2019s cut last year of hundreds of millions of dollars of aid. In February, the US Agency for International Development announced it had ceased all assistance to the West Bank and Gaza.<\/p>\n

\nWhile the US and Israel are applying financial pressure to the Palestinian Authority for different reasons, it is happening just as the PA is being leant on to accept the US peace plan.<\/p>\n

\nPalestinian suspicions over the still-secret US proposals, due to be announced in June, and defiance of Israeli sanctions continue to run deep despite the arm-twisting.<\/p>\n

\nSalary cuts<\/strong><\/p>\n

\nKhalid Al-Asili, the PA\u2019s economy minister, told Reuters in an interview last week that it has been struggling to manage on just 36 percent of budgeted revenues.<\/p>\n

\nThe Authority slashed the salaries of government employees in February, March and April to weather the budget crisis, with some Palestinian public servants\u2019 wages cut in half.<\/p>\n

\n\u201cUnless they find a solution … it will be a disaster for the Palestinian economy,\u201d Asili said.<\/p>\n

\nWith Trump\u2019s \u201cdeal of the century\u201d about to be unveiled, Tareq Baconi, an analyst with the International Crisis Group, questioned the wisdom of Washington\u2019s financial pressure on the Palestinians.<\/p>\n

\nSuch a strategy, he said, stemmed from the \u201cmisguided belief that economic benefits could be sufficiently compelling for Palestinians to relinquish their political demands.\u201d<\/p>\n

\nOne of the architects of the Trump plan, the president\u2019s adviser and son-in-law Jared Kushner, declined to say in public remarks in Washington last week whether it called for a two-state solution, a goal of past efforts to end the Israeli-Palestinian dispute.<\/p>\n

\nAbbas and his officials have refused to deal at a political level with the Trump administration since the US president\u2019s recognition of Jerusalem as Israel\u2019s capital in 2017 and his move of the US embassy to the holy city last May.<\/p>\n

\nPalestinian Prime Minister Mohammed Shtayyeh has rejected out of hand \u201cany political initiative that does not call for ending Israeli occupation and establishing an independent and sovereign Palestinian state with Jerusalem as its capital.\u201d<\/p>\n

\nThe Palestinians have long sought to set up a state in the West Bank and Gaza Strip, territory Israel captured in the 1967 Middle East War.<\/p>\n

\nNetanyahu further clouded the statehood issue when he said during the election race that he would annex Israeli settlements in the West Bank if he wins, a move that Palestinian leaders said would kill any prospects of peace.<\/p>\n

\nRisks for both sides<\/strong><\/p>\n

\nWhile both sides await the US proposals, the financial sanctions on the Palestinian Authority could be a double-edged sword, posing risks to its stability and for Israel as well.<\/p>\n

\n\u201cGiven that the PA\u2019s main source of legitimacy is its capacity to employ a considerable proportion of the Palestinian workforce, internal discontent could challenge its ability to govern effectively,\u201d Baconi said.<\/p>\n

\nFor Israel, weakening the Palestinian Authority could have an impact on Palestinian security forces that cooperate with the Israeli military in the West Bank.<\/p>\n

\n\u201cIsrael takes it for granted that is has not experienced any major terrorist attack for years now,\u201d said Avraham Sela, professor emeritus of international relations at the Hebrew University of Jerusalem.<\/p>\n

\n\u201cCoordination with the PA is invaluable for Israel\u2019s security,\u201d he said.<\/p>\n

\nEconomy Minister Eli Cohen, a member of Netanyahu\u2019s security Cabinet, said on Monday that Israel has \u201cno interest\u201d in the Authority\u2019s collapse.<\/p>\n

\nBut, he said on Israel\u2019s Reshet TV, withholding tax revenues equivalent to the sums of \u201cstipends and pensions being paid to terrorists\u201d is justifiable.<\/p>\n

\n\u2018Catastrophic cuts\u2019<\/strong><\/p>\n

\nIn the West Bank city of Ramallah, Kadhim Harb, 50, who works in the Economy Ministry, said the salary reductions have forced him to delay loan payments.<\/p>\n

\n\u201cWe are cutting back on everything. We only buy basic things,\u201d Harb, said.<\/p>\n

\nA police officer in Gaza, who asked to be identified only by his first name, Ahmed, said his wages were slashed by 65 percent in March.<\/p>\n

\n\u201cSalary cuts? Please say: Catastrophic cuts. I haven\u2019t been able to pay my son\u2019s university tuition this semester,\u201d said Ahmed, 39.<\/p>\n

\nDonor countries and institutions have stepped in to try to plug the growing budget deficit.<\/p>\n

\nAt Abbas\u2019s urging, the Arab League at a meeting in Cairo last week promised $100 million per month to the PA.<\/p>\n

\nThose pledges would add to an increase in funds from Gulf Arab states following the US cuts. Saudi Arabia in 2018 gave $222 million to the Authority, up from $92 million in 2017, the World Bank said. Kuwait contributed $53 million last year.<\/p>\n

\nStill, the PA faced a significant financing gap in 2018 \u2014 some $400 million, or roughly 10 percent of its budget \u2014 forcing it to accrue arrears on loans from local banks and other private sector financiers.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

RAMALLAH:\u00a0Israel and the US are putting the financial squeeze on the Palestinian Authority (PA), where opposition to a long-awaited US peace plan and anger over Israeli sanctions remain strong. Analysts see steep cuts in US aid to the Palestinians over the past year as an attempt to draw them toward a blueprint that Washington promises…<\/p>\n","protected":false},"author":10,"featured_media":39210,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-39209","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-middle_east_news"],"_links":{"self":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts\/39209","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39209"}],"version-history":[{"count":0,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts\/39209\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/media\/39210"}],"wp:attachment":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39209"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39209"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39209"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}