Palestinian Authority faces risk of financial collapse, UN warns

UNITED NATIONS: The UN political chief warned Monday that the worsening Palestinian financial crisis poses a growing risk “of a financial collapse of the Palestinian Authority.”
Rosemary DiCarlo told the UN Security Council that “a sustainable resolution” to the authority’s funding crisis is urgently needed.
Israel is withholding about $11 million of the roughly $180 million a month in tax funds that it collects for the Palestinians, claiming that money was being used to support families of terrorists. The Palestinians, in protest, have refused to accept any of the tax transfers.
“Israel’s so-called ‘withholding’ of Palestinian tax revenues is blatant theft, violating bilateral agreements and the Geneva Convention prohibition on the pillaging of the occupied people’s resources,” Riyad Mansour, the Palestinians’ ambassador at the UN, told the council.
Without the funds, the Palestinian Authority has cut most workers’ salaries in half since March, though salaries will be raised to 60 percent this month because of the Muslim holy month of Ramadan. The lowest paid employees who earn less than $600 a month continue to get full pay, but most civil servants have higher salaries.
DiCarlo called on both sides to address the underlying causes of the financial crisis, implement their bilateral agreements, and avoid actions that undermine security and stability for both Palestinians and Israelis.
She also urged the Ad Hoc Liaison Committee, which coordinates development aid to the Palestinians, to use its meeting Tuesday in Brussels to work with Israel and the Palestinian Authority to resolve the crisis.
In addition to the tax revenue, the Trump administration has cut hundreds of millions of dollars in funding for the Palestinians.
Last month, the head of the UN agency that helps 5.3 million Palestinian refugees called for equal generosity from donors who filled a $446 million hole in its budget last year after the US drastically cut its contribution.
Pierre Krahenbuhl said donors funded the UN Relief and Works Agency’s $1.2 billion budget for 2018 after the US reduced its $360 million contribution in 2017 to just $60 million.
He said the UN agency also adopted a $1.2 billion budget for 2019, and this year it is getting nothing from the United States.
US President Donald Trump said in January 2018 that the Palestinians must return to peace talks to receive US aid money.