In apparent rift with Ramallah, Saudi Arabia halts PA funding

Senior Palestinian officials say around $120 million of financial aid withheld over last 6 months without explanation

Avi Issacharoff

Avi Issacharoff, The Times of Israel's Middle East analyst, fills the same role for Walla, the leading portal in Israel. He is also a guest commentator on many different radio shows and current affairs programs on television. Until 2012, he was a reporter and commentator on Arab affairs for the Haaretz newspaper. He also lectures on modern Palestinian history at Tel Aviv University, and is currently writing a script for an action-drama series for the Israeli satellite Television "YES." Born in Jerusalem, he graduated cum laude from Ben Gurion University with a B.A. in Middle Eastern studies and then earned his M.A. from Tel Aviv University on the same subject, also cum laude. A fluent Arabic speaker, Avi was the Middle East Affairs correspondent for Israeli Public Radio covering the Israeli-Palestinian conflict, the war in Iraq and the Arab countries between the years 2003-2006. Avi directed and edited short documentary films on Israeli television programs dealing with the Middle East. In 2002 he won the "best reporter" award for the "Israel Radio” for his coverage of the second intifada. In 2004, together with Amos Harel, he wrote "The Seventh War - How we won and why we lost the war with the Palestinians." A year later the book won an award from the Institute for Strategic Studies for containing the best research on security affairs in Israel. In 2008, Issacharoff and Harel published their second book, entitled "34 Days - The Story of the Second Lebanon War," which won the same prize.

King Abdullah of Saudi Arabia (right) meets with Palestinian Authority President Mahmoud Abbas in Riyadh,  June 18, 2014. (Omar Rashidi/Flash90)
King Abdullah of Saudi Arabia (right) meets with Palestinian Authority President Mahmoud Abbas in Riyadh, June 18, 2014. (Omar Rashidi/Flash90)

Without providing prior warning or an explanation to Ramallah, Saudi Arabia has been holding back financial aid earmarked for the Palestinian Authority for over six months, senior PA officials say.

Saudi Arabia had been paying $20 million a month to the PA as aid to the cash-strapped Palestinian government in the West Bank when it suddenly shut the tap.

While there has been no official announcement from either Riyadh or Ramallah, The Times of Israel has learned that the payments stopped over half a year ago with no clear reason given for the cessation.

Palestinian sources said that several emissaries from the Palestinian Authority have attempted to find out the reasons for the funding freeze but were not given full answers by the Saudi government.

The Palestinian Authority is working on the assumption that the freeze is due to an across-the-board cut in Saudi Arabia’s funding of foreign countries based on its own budgetary strains, but some sources assess that Riyadh may be unhappy with PA President Mahmoud Abbas.

In recent weeks, Abbas has locked horns with a number of Arab leaders who have been pressuring him to patch up differences within Fatah and make peace with former Gaza strongman Mohammad Dahlan, considered a main rival.

Those leaders have included King Salman of Saudi Arabia, Egyptian President Abdel-Fattah el-Sissi, Jordan’s King Abdullah and United Arab Emirates President Khalifa bin Zayed Al Nahyan.

Abbas’s fierce opposition to Dahlan’s return is both personal and political.

Dahlan is regarded as close to the UAE’s ruler and the Egyptian president, and his name is mentioned — mainly by Israeli commentators — as a contender to replace Abbas when the time comes.

Palestinian Authority President Mahmoud Abbas (right) and Mohammad Dahlan leave a news conference in Egypt, in February 2007. (AP/Amr Nabil)
Palestinian Authority President Mahmoud Abbas (right) and Mohammad Dahlan leave a news conference in Egypt, in February 2007. (AP/Amr Nabil)

Abbas fell out with Dahlan after the latter made thinly veiled corruption allegations against the PA president’s two businessman sons in 2010. Earlier this year, Abbas countered that Arab leaders should stop meddling in internal Palestinian affairs — rare public criticism of Arab allies by a leader whose people depend on Arab financial and diplomatic support.

With around $120 million of Saudi aid having been withheld so far, the freeze in funds threatens to cause serious budgetary problems for the Palestinian Authority.

Earlier this month the PA lost another key source of funding with a UK government decision to cut a third of its aid to Ramallah because of its payment of stipends to the families convicted terrorist serving time in Israeli prison. The UK Department for International Development ordered a review of the PA’s role in funding salaries to terrorists, effectively freezing some £25 million (roughly $30 million) in the current fiscal year, or about one-third of the UK’s total aid to the PA, according to a report in the Sun daily.

The two developments could spell financial disaster for the PA, which relies heavily on foreign aid. In 2012 Saudi Arabia helped prevent a financial crisis by transferring $100 million to the PA, days after then-prime minister Salam Fayyad warned of a imminent catastrophe.

Times of Israel staff contributed to this report.

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