Analysts: Lack of Foreign Funding Aggravates Palestinian Financial Crisis

RAMALLAH (Xinhua) – A lack of international funding and the Zionist regime’s increased deduction of Palestinian tax revenues it collects on behalf of the Palestinians have aggravated the financial crisis of the Palestinian Authority (PA), analysts say.
Analysts told Xinhua that a financial and political embargo imposed on the Palestinians in 2017 during the former U.S. administration of Donald Trump is still going on and has worsened the PA’s financial situation.
In October, statements issued by the Palestinian Ministry of Finance said that the financial aid provided to the public treasury of the PA decreased by 89.6 percent, or 31.5 million U.S. dollars, during the first eight months of 2021.
Ahmad Majdalani, member of the executive committee of the Palestine Liberation Organization and minister of social development in the government, said that “this year was considered the worst” for the PA because “it did not receive any external support except for 30 million U.S. dollars from the World Bank.”
The European Union (EU) “has also delayed its financial support and has postponed it for the next year. The Arab support has stopped, while the volume of our domestic revenues is less than the salary bill for civil and security employees,” he said.
“The worst thing in this crisis is that the cessation of the fund and the financial embargo coincide with the increase in the Israeli deductions from the tax revenue dues, which amount to about 200 million shekels (around 63 million U.S. dollars) per month,” he added.
The tax revenue dues that the Zionist regime collects on behalf of the PA from Palestinian trade and pays it back to the Palestinian treasury reach 700 million Israeli Shekels (around 222 million U.S. dollars) per month, while the Zionist regime deducts 200 million Israeli Shekels (around 63 million U.S. dollars) for services offered to Palestinians, mainly electricity.
The tax revenue dues the PNA receives from the occupying regime every month constitute about 60 percent of the total public revenues of the Palestinian government, which is facing a sharp decline in its revenues as a result of the suspension of economic activities due to the spread of COVID-19.
According to the Palestinian Ministry of Finance, the Palestinian government’s debt to local banks is about 2.7 billion U.S. dollars, up from 1.4 billion U.S. dollars in 2019. The ministry noted that it will not resort to more borrowing from Palestinian banks for many technical and realistic reasons.