On eve of Bahrain summit, U.N. official warns of possible PA collapse

“The Palestinian Government is facing a very serious financial crisis which risks triggering a series of dangerous developments that will be difficult to mitigate and contain."

June 23, 2019 04:26
3 minute read.

Palestinian Authority President Mahmoud Abbas gestures during a ceremony marking the 54th anniversary of Fatah's founding, in Ramallah on December 31. (photo credit: REUTERS)


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analysis from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief


The Palestinian Authority is in danger of financial collapse as a result of its dispute with Israel over terrorist payments, the UN’s Special Coordinator to the Middle East Peace Process Nickolay Mladenov warned the UN Security Council on the eve of a US-sponsored summit in Bahrain on the Palestinian economy.

“I am deeply concerned about developments relating to the clearance of revenues of the Palestinian Authority,” Mladenov told the council in New York at its monthly meeting on the Middle East.

“The Palestinian Government is facing a very serious financial crisis which, unless resolved, risks triggering a series of dangerous developments that will be difficult to mitigate and contain, including the potential collapse of the Authority,” Mladenov said.

The financial crisis, he said, risks the “undermining of 25 years of investment by the international community in supporting a two-state solution under the Oslo process.”

This year, Israel began withholding some $140 million, approximately $11. 5 million a month, from the tax revenues it collects on behalf of the PA and then transfers to it. The 6% of the tax revenues it has withheld is equal to the sum of money that the PA gave to Palestinian terrorists and their family members. To protest the move, the PA has refused to accept any of the tax revenues, even though such tax revenues constitute 65% of its budget.

“I echo the call by Palestinian PM Mohammad Shtayyeh upon Israel to restore the revenue transfers in full and call on both sides to engage in a constructive manner to ensure compliance with the Paris Protocol on Economic Relations,” Mladenov said.

He spoke in advance of the Bahrain summit on June 25 and 26, where the US is expected to discuss its economic road map for the Palestinians, which it unveiled Saturday.

At the same time in New York, the UN Relief and Works Agency, which provides services to Palestinian refugees, plans to hold a pleading conference to help meet its $1.2 billion budget to service 5.4 million Palestinian refugees in Syria, Lebanon, Jordan, Gaza, the West Bank and east Jerusalem.

Mladenov told the Security Council that it was important to support UNRWA’s work, explaining that it had a projected shortfall this year of $211 million and “is facing serious cash-flow issues.”

“This could impact operations, including UNRWA’s ability to maintain food assistance to over 1 million Palestine refugees in Gaza,” he said.

The US has halted all its funding to the agency and has called on the UN General Assembly to shut down the organization, noting that the Palestinians can be better serviced through other venues.

At the UNSC, US political coordinator for its New York mission, Rodney Hunter spoke of the “peace to prosperity” economic workshop in Manama, Bahrain.

Israeli government officials have not been invited to the Bahrain summit. Palestinian leaders – and the vast majority of its business community – are shunning the conference spearheaded by US President Donald Trump’s son-in-law, Jared Kushner. Businessmen from Saudi Arabia, Turkey, Russia, the United Kingdom, Nigeria, Columbia and the United Arab Emirates are expected to attend, along with former British prime minister Tony Blair.

Hunter characterized the summit as “a pivotal opportunity to convene government, civil society and business leaders to share ideas, discuss strategies and galvanize support for potential economic investments and initiatives that could be made possible by a peace agreement.”

He continued: “The workshop will facilitate discussions on an ambitious, achievable vision and framework for a prosperous future for Palestinians, including enhancements to economic governance, development of human capital, and facilitation of rapid private-sector growth.”

“We’ve been very clear that our full plan will address all final status issues; the economic plan is a complement to the political plan,” Hunter said. “We understand that only through a solution to the final status issues will the economic vision be possible.”

“Sustainable Palestinian economic growth is not achievable in the current environment,” he said. “The economic vision is a road map, which includes a detailed portfolio of real projects and capacity-building programs, which have the potential to unleash sustainable, private sector-driven growth – if and when there is peace,” he said.

Reuters contributed to this report.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

A Palestinian man reads the Al-Quds newspaper depicting images newly elected U.S. President Donald T
July 23, 2019
Workers' strike shuts down largest Palestinian daily for one day


Cookie Settings