News Analysis: Israel waves financial stick to weaken money-hungry PNA

Palestinian observers and officials warned on Sunday of the risks of the gradual collapse of the Palestinian National Authority (PNA) due to Israel's policy of attempting to financially weaken the PNA by withholding its tax revenue dues.

Since the beginning of the year, the PNA has been passing through a crucial fiscal crisis after Israel decided to withhold the tax revenue dues it pays to the PNA budget.

According to previous agreements, Israel pays the PNA the taxes it collects from the Palestinian imports at its crossings and seaports.

The PNA has only paid 60 percent of its servants' monthly salaries. The PNA employs 150,000 civil and security employees in both Gaza and the West Bank, who got two third of their salaries.

Observers said that if the crisis goes on, the PNA might be unable to pay even the 60 percent.

Chief Palestinian negotiator Saeb Erekat had earlier told Voice of Palestine Radio that withholding the tax revenue dues Israel pays every month to the PNA "is clearly aiming at toppling the Palestinian Authority," adding "Israel wants to see schools, hospitals and infrastructure completely collapsing."

Erekat called on the international community to strongly intervene to oblige the Jewish state to pay back all the dues of taxes it usually collects from the Palestinian trade at its crossing points, airports and seaports.

He warned of the consequences of keeping the withholding of the tax dues.

Earlier, United States Secretary of State John Kerry told a news conference that the economical and security collapse of the PNA "is imminent," and warned that withholding the tax revenue dues is a step that might influence the security coordination between Israel and the PNA.

Israel's decision to withhold the tax revenue dues was a reaction to Palestinian President Mahmoud Abbas decision to sign on joining 20 international treaties and agencies, including the Rome Statute for joining the International Criminal Court (ICC) at The Hague.

The Palestinians consider the Israeli withholding of the tax dues as an Israeli piracy to their money. Ahmed Rafiq Awad, political science professor at Beir Zeit University in the West Bank, told Xinhua that the current Israeli policy "is a punishment and would weaken the Palestinian Authority."

"Israel aims at preventing the PNA from internationalizing the conflict and wants to exert pressure on the authority not to head to the international agencies by exerting economical pressures on the Palestinians and their leadership," said Awad.

Earlier this week, Palestinian officials threatened that the PNA may take tough measures, including limiting the ties with Israel and severe the security cooperation in the West Bank with Israel in response to keeping the tax dues withheld.

In early March, the Central Council of Palestine Liberation Organization (PLO) is scheduled to convene in the West Bank to decide the fate of the Palestinian ties with Israel and to study the alternatives to the future ties with Israel, according to official sources.

"The PNA stands before a crucial crisis that may compel it to make crucial decisions, most probably bargaining between the security cooperation with Israel and heading to the international agencies, or keep security cooperation, stop going to the ICC and get the money," said Awad.

However, Awad said that the fate of all these developments "is still unclear until the Israeli elections are held in mid of March," adding "all depends also on the heaviness of the pressure of the international community on Israel to release the taxes dues and pay it all to the PNA."

The Palestinian Unity government has also announced that it aims at carrying out series of measures against Israel, mainly economical measures such as boycotting the Israeli products and stop paying four billion U.S. dollars for buying products from the Israeli markets every year.

Palestinian economists said "but the Palestinian economy is weak, fragile and unstable because it still depends on the international donations, besides Israel's full control of crossing points either with the West Bank or with the Gaza Strip."

Samir Abdullah, director of Mass Center for Economy Research in Ramallah, told Xinhua that the ongoing Israeli withholding of Palestinian tax revenue dues "doubles the crisis of the PNA which has been exist for more than two years." Endit