Wednesday, June 20, 2018
Opinion

Foolish financial squeeze on Palestinians

Each time a positive development seems poised to occur in the decades-old Israeli-Palestinian conflict, a problem arises and often results in a bigger catastrophe. This cycle will continue until the United States musters the moral and political courage to put a stop to it.

This time, Israeli Prime Minister Benjamin Netanyahu and Finance Minister Yugal Steinitz are dragging their feet in keeping a recent promise to transfer tax and customs revenues, about $500 million in Israeli currency, legally owed to the cash-strapped Palestinian Authority.

The authority, established under the 1993 Oslo Accords, is the self-rule government that has limited control over specific areas of the Israeli-occupied West Bank.

Making conditions worse for the PA's struggling economy, the United States followed Israel's lead and has been withholding about $500 million in promised aid for more than a year. Recent good news is that Congress decided it would release the money.

International leaders gave Israel the power to collect taxes and fees and distribute them to the PA. This arrangement has become a potent tool Israel uses to retaliate against the PA when the organization makes political moves deemed objectionable.

In this case, Israel and the United States have been withholding money because of the PA's successful campaign to upgrade its status from "nonmember observer entity" to "nonmember observer state" in the United Nations. In November, the U.N. General Assembly granted the Palestinians the new status.

Nonmember states with observer status can attend meetings and participate in debates, but they cannot vote in the General Assembly or run for elected positions. The new status, mainly symbolic, improves the Palestinians' chances of joining other agencies that include the International Criminal Court where the PA could, for example, legally challenge Israel's unrelenting settlement construction in the West Bank.

Israel and the United States warned Palestinian Authority President Mahmoud Abbas that a U.N. upgrade would virtually kill the peace process. In reality, there was not much of a peace process to begin with.

The withholding of money, as Netanyahu and the United States warned, is crippling the PA. This, in fact, is the biggest danger to peace. The authority has not been able to pay the salaries of more than 165,000 civil servants that include educators, health care workers and security forces. Knowing they will not receive paychecks, many of these employees have stopped showing up for work.

The obvious paradox is that by smothering the West Bank in debt, Israel is endangering its own security. The authority was established as a vehicle that would lead to a permanent peace agreement that would lay the groundwork for a Palestinian state.

Abbas has managed to prevent terrorist attacks against Israelis and has been willing to engage in substantive peace talks. Last year, Yoram Cohen, the chief of Shin Bet, Israel's intelligence agency, praised Abbas' efforts in a report to the Knesset's Foreign Affairs and Defense Committee. "The security coordination with the PA is good," he said.

He warned officials recently, however, that the PA's ability to keep the peace with Israel depends on daily living conditions of West Bank residents and public opinion.

Now that Abbas no longer can pay most employees and because the occupation keeps private companies out, he needs the money owed to his government. Each day, thousands of workers are joining strikes and other protests as conditions worsen. More and more residents are beginning to doubt the wisdom of Abbas' accommodating strategy.

During an interview with Forward.com, a Jewish publication, Gadi Zohar, a retired general who directed Israel's military affairs in Gaza and the West Bank, said: "If the authority falls, Israel will have to provide services to the population, and the budgetary burden will fall on Israel. The Palestinian security forces, which have been a major component in keeping the calm, will be dispersed and won't do their job. It will fall on the army."

For the good of everyone involved, which includes U.S. taxpayers, Israel should keep its promise to release the money. The United States should do the same.

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