Opinion |

Do You Like Withholding Palestinian Tax Money? Enjoy the War

A photo of Dr. Zvi Bar'el.
Zvi Bar'el
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Palestinian President Mahmoud Abbas chairing the weekly cabinet meeting in Ramallah, April 29, 2019.
Palestinian President Mahmoud Abbas chairing the weekly cabinet meeting in Ramallah, April 29, 2019. Credit: Majdi Mohammed / Pool via Reuters
A photo of Dr. Zvi Bar'el.
Zvi Bar'el

The threat by Palestinian prisoners to launch a hunger strike at the beginning of last month struck fear into the hearts of the Israeli government. The fear that the strike would spark rioting in Gaza and the West Bank, obligating Israel to use force, left it with no choice but to back down and reach agreements with the strikers. Shortly before that, with Egyptian mediation, Israel had reached deals with Hamas on economic concessions that would allow a temporary lull in hostilities.

In both these instances, Israel’s muscle flexing encountered the limitations of force; Israeli arrogance was taken down a peg for now. But the appetite can’t be satisfied, and national pride made it necessary to withhold from the tax money that belongs to the Palestinian Authority the sums that the PA pays families of prisoners and terrorists who were killed.

It seems that this time too the government will learn a lesson in flexibility. It waited nearly six months before implementing the law to withhold tax money, mainly due to the reservations of the security services. The lesson of Gaza, which burned for months because the salaries of government officials weren’t being paid, was clear.

The government, including the prime minister, didn’t want to see a repeat performance in the West Bank. But the pressure from the right increased, the interests of the election campaign kicked in, and the price seemed reasonable and the claim logical. After all, it’s unconscionable for a country that demands that the international community punish the PA for supporting terror not to take its own steps, especially after U.S. President Donald Trump took an ax to the Palestinian budget when he froze U.S. aid — to the UN refugee agency UNRWA as well.

But it’s not Trump who has to deal with his own handiwork. An economic war seemed cleaner; it doesn’t go viral so easily. Gaza, however, has taught us that an economic assault morphs pretty quickly into a real war, replete with tanks and artillery.

Palestinian President Mahmoud Abbas, as expected, took to the barricades. First he ordered a 30 percent cut to the salaries of officials who receive over $500 a month, spending reductions at government ministries and a substantial cutback to the development budget.

The Israeli attempt to transfer the tax money, minus the sum withheld, to Palestinian banks was met with an order to return the money to Israel. The prisoners and their families, Abbas said, are our children and deserve the PA’s support. All the tax money transferred by Israel, which constitutes about 65 percent of the PA budget, belongs to the Palestinian people, and according to the agreements signed by Israel and the PA, any sum withheld must be acceptable to both sides.

The threat, it turns out, did the job. Israel tried unsuccessfully to persuade Jordan to pressure Abbas to accept the smaller check, and Prime Minister Benjamin Netanyahu held several consultations with Finance Minister Moshe Kahlon to reach a solution, for the time being without success.

Last week the Arab League foreign ministers expressed full support for the Palestinian stance, and promised to send the PA $100 million a month. This is a promise that even Abbas isn’t counting on, but if the Arab support really does arrive, it will cover the deficit created by the withholding of taxes, and the PA will be able to continue to pay money to the families of the prisoners and the terrorists.

And what will Israel do? Will it demand that Saudi Arabia or Kuwait halt their assistance? And for how long will the tens of thousands of teachers, policemen and officials in the welfare, agriculture and trade ministries suffice with reduced salaries, especially with Ramadan in the offing? When will the protests of the embittered Palestinians spill over into the streets and open a front in the east? Israel has no answer.

The automatic response that “we’re prepared for any scenario,” including backing down and making concessions, may be the only hope for solving this looming crisis. But the Israeli government is used to walking on coals barefoot before figuring out what’s going on.

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