The resumption of limited US support for the PA does not solve its financial crisis

Mahmoud Abbas (Issam Rimawi - Anadolu Agency)

Adnan Abu Amer

Middle East Monitor  /  January 21, 2020

In December, the US Congress agreed to transfer $150 million to the Palestinian Authority and renew the aid that President Donald Trump had frozen for civilian projects, including $75 million to support security services. The rest will support civilian projects in the occupied West Bank and East Jerusalem, but not the besieged Gaza Strip.

After being frozen for nearly a year, why resume aid now? Does Congress feel that the PA may collapse as a result of its financial crisis? Was it told this by Israel? We need to ask how much impact the resumption of US support will have on the PA’s relationship with the Trump administration and if it is conditional upon new concessions to keep Washington happy.

The US paid $1 billion every year to support the PA from its inception in 1994 until 2014. In 2015, it only paid $250 million towards projects and institutions, not into the public treasury. In 2016 that figure was $200 million, until late 2018 when aid stopped completely.

According to the PA Ministry of Finance, between 2007 and 2015 the average annual US aid was $300 million. This declined in 2012 after President Mahmoud Abbas approached the UN for membership as an observer state.

The Congress decision to send aid to the PA comes after Trump refused a request last June by Israeli Prime Minister Benjamin Netanyahu to transfer funds to the PA security services, which collaborate with their Israeli counterparts. Trump refused at the time even though the US State Department responded to the request from Israel’s Ambassador to Washington, Ron Dermer, to transfer $12 million to the PA security services, by passing the request to the White House.

Senior US officials sent a message to Trump from Netanyahu that this aid for the PA security services will enhance Palestinian-Israeli security coordination and stop armed attacks against Israel. Trump pointed out that his policy was to stop aid to the Palestinians as long as they refuse to engage with his administration. “If it is that important to Netanyahu,” said the US President, “he should pay the Palestinians $12 million.”

This position shed light on the poor relationship with the PA, which reached its nadir in January 2019, when the Trump administration stopped all aid. The aim of the cut was to pressure the Palestinians into accepting the deal of the century. The Congressional decision to resume support for the Palestinian security agencies suggests that there is a rift within US decision-making institutions.

The budget for the PA’s bloated security services comes from several sources, including its general budget and US aid, but the percentage from each party is unknown. The PA’s serious financial crisis has a negative impact on security spending.

PA security personnel have been receiving half pay for the past few months, and have faced training cuts, which has affected their efficiency and professionalism. The resultant reduction in patrols casts a shadow on the security situation in the West Bank, which is a concern for the Palestinians, Israelis and Americans. This does not impress the Trump administration, though, which wants to put as much pressure as possible on the PA to accept the President’s formula for resolving the Palestinian-Israeli conflict through the deal of the century, without preconditions. He believes that the PA’s rejection of the deal is a personal insult.

The decision by the US Congress regarding aid to the PA coincides with the release of the US State Department’s annual report on global terrorism. This praises the Palestinian security services for combatting armed groups in the West Bank and limiting the ability of Hamas and other resistance groups to attack Israel. Furthermore, the head of the PA General Intelligence Service, Major General Majed Faraj, has just visited Washington, where he met the Deputy Director of the CIA, Vaughn Bishop, and other officials to discuss security coordination and training.

Without US aid, Abbas has been giving priority to funding the PA security services at the expense of other ministries and agencies. He knows that the PA’s continued existence relies on the preservation of security coordination with Israel in the West Bank, which serves the interests of the occupation. That is why the resumption of US aid for Palestinian security is not surprising, because it is in the interests of Israel’s security to keep the West Bank under control. The PA trusts the role of Congress, the CIA and the Pentagon in the continued aid, despite White House opposition.

Abbas has feared for the PA ever since Trump entered the White House in January 2017. The US President has never hidden his pro-Israel positions, and has since recognised Jerusalem as the capital of Israel and moved the US Embassy to the city; accepted its annexation of the Syrian Golan Heights; claimed that illegal settlements are not an obstacle to peace; and basically given a green light for Israel to annex large parts of the West Bank, including the Jordan Valley. Trump wants to make sure that US overseas aid serves American interests, which means Israel’s interests. Hence his reluctance to support the PA financially.

The Palestinians know that the US can no longer be regarded as an honest broker in negotiations, given its strong pro-Israel bias. Internationally, there are concerns that Trump will influence other donors, such as Britain and Australia, to cut their own aid to the Palestinians. This is a real possibility given the rise of right-wing populist governments around the world and the resultant weakening of the Palestinian position in international forums.

Despite the resumption of US aid to the PA, especially its security services, through Congress rather than the White House, the general American approach of reducing financial support to the Palestinians remains the same. The intention is to apply pressure on Abbas and the PA to return to negotiations with Israel, by directing support to NGOs, infrastructure projects and good governance programmes, not to the PA budget.

Still facing a serious financial crisis, the PA has introduced austerity measures, and relies on taxes collected on its behalf by Israel, which can be stopped at the whim of the Israeli government. This has happened on at least two occasions in the past few years, exacerbating the crisis.

Most Palestinian commentators agree that 2020 and what is left of Trump’s first term in office will be a difficult time for the PA. The move by Congress doesn’t really alter that fact. Coupled with the overall weak Arab position towards Washington and the lack of an Arab safety net to compensate the PA for the decline in US support, we may see even more negative developments affecting Abbas and his authority in Ramallah.

Adnan Abu Amer is a Palestinian academic