The stability of the Palestinian Authority is under threat due to “unprecedented financial and political challenges,” according to a report issued by the United Nations on Thursday.
The report states that despite a period of relative and temporary calm between Israel and the Palestinians since the end of March, the presence of a major financial crisis and growing humanitarian needs, along with the lack of negotiated settlement, “threatens the stability of the West Bank and the very survival of the Palestinian state-building effort.”
In February, Israel’s security cabinet approved the freezing of $138 million in tax transfers over the PA’s payments to Palestinians jailed by Israel for terrorism and violence, and to the families of dead terrorists. In response, the PA said it rejected its entire regular monthly tax transfer from Israel to protest the cut.
Under interim peace deals, Israel collects customs duties and other taxes on behalf of the Palestinian Authority, and transfers the funds to the Palestinians each month. These transfers cover roughly two-thirds of the Palestinian government’s budget.
The freeze and rejection of funds dealt a dire financial blow to the cash-strapped Palestinian leadership, already weakened by recent US cuts of more than $200 million in bilateral aid.
The UN says that as a result of the cuts, the PA was forced to introduce austerity measures, the impact of which could take years to reverse. The combination of these factors has produced “unprecedented financial and political challenges” to the PA, the report charges, and has led to the slashing of government employees’ salaries.
The report, which was complied by the office of the United Nations Special Coordinator for the Middle East Peace Process (UNSCO) ahead of a committee meeting due to take place in Brussels on April 30, said the international body has worked to ensure that electricity supply to the Gaza Strip has more than doubled since October 2018, and has helped with the creation of thousands of temporary jobs and the provision of emergency medical supplies.
According to the report, the UN is also working to find sustainable solutions for the energy, water and health sectors.
“Addressing the deteriorating humanitarian and economic situation in Gaza requires not only donor funding and project implementation, but bold policy decisions by all sides,” UN Special Coordinator for the Middle East Peace Process Nickolay Mladenov said in a statement.
The report also notes violence emanating from the Gaza Strip, including the violent weekly protests and the firing of rockets toward central Israel. However, the UN said that Israel’s response prompts “concerns over the degree of its use of force.”
Israel maintains that the Hamas terror group appropriated the border protests for nefarious purposes, using the civilian demonstrators as cover for violent military activities.
The report also criticized a Hamas crackdown on protesters within the coastal enclave in March, calling the brutal response a “worrying development.”
Agencies contributed to this report.