Israel advances PA NIS 180m. to ease finance crisis

PM, FM decided to transfer before Ramadan to help the PA, in the midst of a severe financial crisis.

Netanyahu Steinitz 390 (photo credit: Reuters)
Netanyahu Steinitz 390
(photo credit: Reuters)
Israel, in a “goodwill gesture” to the Palestinian Authority, gave Ramallah over the last few days a NIS 180 million advance on tax money it transfers on a monthly basis, The Jerusalem Post has learned.
The money was transferred before Ramadan, which began Friday, to help the PA – currently in the midst of a severe financial crisis – pay the monthly salaries of public sector employees.
Prime Minister Binyamin Netanyahu and Finance Minister Yuval Steinitz made the decision, one of a number of gestures made since the beginning of the year in an attempt to improve relations with the PA and encourage its President Mahmoud Abbas to renew some kind of dialogue with Israel.
Senior government officials said that the decision to transfer the funds – an advance on money that is to be transferred in the coming months – was made before US Secretary of State Hillary Clinton’s visit last week, and was not the result of a US request.
In addition, the government’s economic cabinet recently decided to increase by approximately 5,000 the number of Palestinian construction workers allowed to work in the country.
The officials stressed that this quota would be subtracted from the number of foreign workers allowed into Israel and would not come at the expense of Israeli workers.
The officials said that Israel generally transfers some NIS 100m. to the PA each month in tax revenues that Jerusalem collects on the PA’s behalf. This money is often contested, and Israel withheld the transfer of these funds in November in response to the Palestinians’ applying for and winning acceptance as a state to the United Nations Educational, Scientific and Cultural Organization (UNESCO).
One senior official said this move was taken in the hope that it will “improve the atmosphere.”
Noting that the PA was currently facing a severe budgetary crisis, the official said that this money helped the PA pay its salaries before Ramadan, and was part of Israel’s policy of trying to “preserve the Palestinian economy.”
The last goodwill gesture Israel made to the PA was in May when it handed over the bodies of more than 90 terrorists. That move resulted from a meeting between Abbas and Netanyahu’s envoy, Yitzhak Molcho.
Last week, Saudi Arabia said it would transfer $100m. to the PA to help ease its financial crisis. At the time, the PA envoy to Saudi Arabia said its government had some $1.5 billion in debt, and urgently needed an infusion of $500m.
The crisis has led to some concern over the possibility of the PA going bankrupt, and the fear that this could lead to a Hamas takeover of the West Bank. Chief Palestinian negotiator Saeb Erekat was quoted last week as saying this was the worst financial crisis the PA has faced since its establishment 20 years ago.