Funding from Arab countries nosedives and now amounts to less than 1% of their $4.5 billion annual budget.
Palestinian infighting, corruption and inability to engage in the peace process is costing them more than just moral support from Arab countries.
Indeed, Arab states have not only started to normalize ties with Israel, they are also slashing the hundreds of millions of dollars in support they used to shower on the Palestinians annually, a senior Palestinian economist reported this month.
Writing in the Palestinian Al Quds newspaper, Dr. Saeed Sabry noted that the Palestinian Authority seems to have brought its financial woes upon itself, which have been intensified further by the coronavirus pandemic.
“Grants and financial aid from Arab countries to the Palestinian budget decreased by 81.5% on an annual basis during the first eight months of last year,” Sabry wrote, adding that the donations totaled a mere $38.93 million dollars.
That’s a huge drop from the $211 million dollars in grants and financial aid Arab countries provided in 2019 and less than 1% of the annual $4.5 billion budget.
“The decline in Arab support is accompanied by financial pressures facing [Palestinian Prime Minister] Dr. Muhammad Shtayyeh due to the decline in financial revenues as a result of the outbreak of the coronavirus, and the crisis of tax funds [clearing] with [Israel],” Sabry said.
The PA elected not to take any of the tax revenues Israel collects on its behalf in protest against Israel’s peace deals with the United Arab Emirates and Bahrain and in anticipation of Israel applying sovereignty over settlement blocs in Judea and Samaria.
While the latter never happened, the Palestinians only started taking the tax money last month when they were on the verge of bankruptcy.
“The government has lost two-thirds of its income since last May,” Sabry said. A respected economist, Sabry noted that 85% of the PA budget comes from tax revenues, customs and government transaction fees, all of which lost a massive $3.8 billion in revenues due to the pandemic and the Palestinians’ refusal to accept their own money in the form of tax revenues.
Pro-Israel blogger Elder of Ziyon noted that the Palestinian Authority has been without a published budget for the past three years and instead uses “emergency budgets,” which lack transparency, creating “a situation that allows a great deal of corruption.”
“A few years ago, Arab nations would routinely pledge hundreds of millions of dollars to the PA every year. As recently as April 2019, the Arab League pledged $100 million a month – $1.2 billion a year – to aid the Palestinian budget,” the blogger noted. “Clearly, they never even paid a single installment in 2020.”
“The Arab world has completely given up on the Palestinian Authority, just as the new [Biden] administration is expected to give it a boost,” he added.