RAMALLAH, West Bank – Furious that Israel was about to annex large swathes of the West Bank, Palestinian Authority President Mahmoud Abbas took the painful step in June of refusing to accept Israel’s collected taxes that account for more than 60 percent of the budget. of authority.
Then, last month, Israel suspended its annexation plan as part of the deal to normalize relations with the UAE. As annexation remains a possibility, however, Mr. Abbas still refuses to accept the money, in what some Palestinian officials say privately is more of an attempt to save face than to force further changes in Israeli politics.
On Friday, the Palestinian leader suffered another setback when a second Gulf state, Bahrain, also announced that it would normalize relations with Israel. With this, Bahrain challenged Abbas’ longstanding demand that Arab countries normalize ties with Israel only after the creation of a Palestinian state.
Diplomats have begged Mr. Abbas to give in to the tax issue, and even some senior Palestinian officials complain about the futility of his position.
But in the meantime Abu Qusay, a Hebron teacher paid for by the PA, has stopped buying meat for dinner. He canceled his Internet service, skipped neighborhood events where he was expected to bring gifts, avoided using his car, and begged his wife and four children to turn off the lights and take shorter showers.
“I could barely make ends meet on my usual salary,” said Abu Qusay, 37, who asked to be identified only by his nickname. Along with tens of thousands of other officials from the authorities, he said he had received none of his monthly salary – $ 1,030 – in June, and only half since then. “Now, I feel like I can’t breathe,” she said. “I have a hard time putting food on the table for my children.”
Refusing financial transfers from Israel meant giving up more than $ 100 million a month in import taxes that Israel collects on behalf of Palestinians. It was one of the more drastic elements of a Mr. Abbas’ desperate strategy to try to block the annexation by cutting off all forms of coordination with Israel.
When annexation seemed likely, many Palestinians accepted the wage cuts as a necessary national sacrifice. But then, Israel backed away.
Frustrating the Palestinians, Israeli Prime Minister Benjamin Netanyahu insisted with his right-wing supporters that he had not actually abandoned his plan to impose Israeli sovereignty over much of the West Bank, he had simply suspended it. So Mr. Abbas could not simply declare victory.
The normalization agreement with the UAE was not achieved in coordination with the Palestinians, who categorically opposed it. And from the Palestinian point of view, suspending the annexation was not enough: they wanted it to be canceled
As a result, Mr. Abbas refused to go back to the way things were.
Diplomats who met him say that Mr. Abbas intends to wrest some new concessions from Israel with which to assure the Palestinian public that its rejection of the money and their summer difficulties have not been entirely in vain.
Mr. Abbas’ office and several of his senior aides declined to comment.
When the British foreign minister, Dominic Raab, encouraged Mr. Abbas to take the money at a meeting in Ramallah last week, Mr. Abbas replied: “In exchange for what?” according to a person who knows the details of the exchange.
In the meantime, however, Palestinian experts warn that Mr. Abbas’s administration could soon go broke.
“I don’t think they have been hiding much,” said Raja Khalidi, an economist who runs a research institute in Ramallah. Local banks will soon reach a point where they will not be able to lend money to the authority, he said. “It is not as if there is a black fund from which to draw.”
The Palestinian Authority has survived without fiscal transfers for periods of several months in the past, but doing it while a pandemic was affecting its economy made the situation even more precarious, Khalidi said.
The European Union, the United Nations, Britain and several Arab countries have all urged the Palestinian Authority to resume accepting transfers from Israel, according to officials briefed on the talks.
“The tax situation of the Palestinian Authority is excessive and clearly unsustainable without accepting transfers of tax revenues collected by Israel,” Sven Kühn von Burgsdorff, EU representative for Palestinians, said last week.
“These revenues are Palestinian and should be transferred and accepted regardless of political tensions,” he said. “If no solution can be found, the whole system could collapse.”
Mr. Abbas told a group of Palestinian officials last week that he was opposed to accepting tax money under decades-old economic agreements with Israel that governed those transfers. This opened the door to accepting money on new terms. But he hasn’t proposed any.
Mohammed Shtayyeh, the Prime Minister of the Palestinian Authority, suggested that Mr. Abbas refuses to accept the transfers because Israel demands that Palestinians first deal directly with Israeli officials.
But Israeli security officials deny that Israel has placed conditions on the transfer of taxes to Ramallah, and say the Palestinians just have to decide to accept them.
The longer the stalemate lasts, the more it is testing the patience and fortitude of the Palestinian Authority workforce.
While some employees said they continued to value “national considerations” above financial ones, others argued that it highlighted a disconnect between Mr. Abbas and the Palestinian team.
“He made the decision, but he is not paying the price,” said Abu Qusay, the teacher from Hebron. “I’m paying the price. The president’s life hasn’t changed at all. He still has cars, bodyguards and everything he needs.”
Some criticisms have arisen within Abbas’ own faction. As early as June, Nasser al-Kidwa, a member of Fatah’s central committee, questioned the refusal of transfers in a briefing with reporters. And in recent weeks, Fatah’s top executives have privately described Abbas’s position as counterproductive, officials say.
Nabil Amr, a former Palestinian Authority information minister, said he believes the authority should accept tax transfers as long as Israel does not try to extract anything in return, repeatedly calling it “our money”.
Dissent has not yet exploded, in part because Palestinians working for authority are generally wary of openly criticizing the leadership for fear of reprisals.
An officer in Palestinian security forces, who insisted on anonymity, said his financial situation deteriorated so much that he sold his only car, forced his family to give up air conditioning despite the sweltering heat, and made his daughter go to school to save the bus ticket. His monthly salary was reduced to $ 515 from $ 735.
“I feel totally incapable,” said the 31-year-old officer, based in Hebron. “My heart broke the other day when I told my son I couldn’t afford a $ 7 toy he asked me to buy it.”
And in Ramallah, a public official named Maher, who hid his surname and the ministry he works in for fear of retaliation, said his life had been turned upside down.
Not only was her $ 2,060 salary cut in half, she also lost a secondary job as a translator at international conferences because those were all canceled due to the coronavirus. He said he was overwhelmed with debt and struggling to afford the bare necessities.
“I was a wealthy person,” said Maher, 52, a father of three. “Now, I feel helpless. Totally helpless. “