Israel to ask donor countries to restore payments to Palestinians

Donor countries will be asked to restore financial contributions to the PA as it faces an acute financial crisis.

 A child waves a flag as demonstrators take part in a protest in solidarity with Palestinian prisoners in Israeli jails, in Ramallah in the West Bank September 8, 2021. (photo credit: MOHAMAD TOROKMAN/REUTERS)
A child waves a flag as demonstrators take part in a protest in solidarity with Palestinian prisoners in Israeli jails, in Ramallah in the West Bank September 8, 2021.
(photo credit: MOHAMAD TOROKMAN/REUTERS)

Israel is set to ask donor countries to restore their financial contributions to the Palestinian Authority, according to a source in the Ministry for Regional Cooperation.

Those donations have dropped by 85% over the last 13 years, according to a World Bank report published last week in advance of the Ad Hoc Liaison Committee donor meeting in Oslo on Wednesday.

In 2008, the global community contributed $1.2 billion to the PA, which was an all-time high. This year, donor funds are only expected to amount to $184 million, according to the World Bank.

Regional Cooperation Minister Issawi Frej (Meretz), who is expected to represent Israel at the meeting, will ask donor countries to restore payments and to invest in particular in projects involving water and health, a source told The Jerusalem Post on Sunday.

The meeting, held twice a year, is chaired by Norway. It involves representatives from 15 countries and entities including the Palestinian Authority. The AHLC is one of the few international forums where Palestinians and Israeli officials interact cooperatively.

In Oslo, Frej will meet with PA Prime Minister Mohammed Shtayyeh. It will be the first such face-to-face conversation between the two.

Regional Cooperation Minister Esawi Frej on his way to a cabinet meeting on November 14, 2021 (credit: MARC ISRAEL SELLEM/POOL)Regional Cooperation Minister Esawi Frej on his way to a cabinet meeting on November 14, 2021 (credit: MARC ISRAEL SELLEM/POOL)

The meeting comes as the PA faces an acute financial crisis, with both the World Bank and the UN warning that it has a looming $1.36 billion deficit and may not be able to pay its civil servants at the end of the year.

Frej is expected to urge the Palestinian Authority to take advantage of economic benefits being offered through the Abraham Accords, an initiative it has rejected. This could include tourist initiatives between the PA and Arab countries that have normalized ties with Israel, such as the United Arab Emirates, Bahrain and Morocco.

Israel also plans to present a number of initiatives that could add money into the PA coffers, including an electronic VAT system that would ease custom collections. It is estimated that this could save the PA NIS 100,000 million shekels a year.

Israel would also consider, for the first time, making changes to the 1994 Paris Protocol that regulates its financial arrangement with the PA, according to a ministry source.

In a report published last week, the Office for the UN Special Coordinator for the Middle East Peace Process called for the Paris Protocol to be updated.

“UNSCO has consistently argued that the Palestinians must re-envision their economic and administrative relationship going forward,” it stated.