For the Palestinian Authority (PA) under the long-time administration of Chairman Mahmoud Abbas, 2021 was difficult, caught in a severe economic crisis while coping with the coronavirus pandemic. In the aftermath of the May 2021 war in Gaza (Operation Guardians of the Walls), Hamas’ standing rose in the Palestinian “street,” while the PA lost power in parts of the West Bank.
Both the PA and Abbas face economic, security, and leadership crises that may intensify during 2022. The battle for succession at the top of the ruling Fatah faction certainly has intensified, and the United States and Israel have been working to strengthen the PA, prevent Hamas from entrenching itself in the West Bank, and assist the PA chairman in transferring power to his associates in preparation for his descent from the political stage.
PLO Policy Makers Fail
The 31st session of the PLO’s Central Council, held in Ramallah on February 6, 2022, concluded with a thud. Decisions announced had already been made in 2018 – and never enacted.
The conference’s closing statement said that the PLO’s Central Council had decided to end all forms of security coordination with Israel until a Palestinian state was recognized. It added: “The Council has decided to define practical aspects of the transition of power to the state and to reject ‘economic peace’ measures as an alternative to a permanent and just peace.”
Decisions were also made at the conference regarding the PLO’s relations with the United States. The Central Council rejected former President Trump’s “deal of the century” plan, the recognition of a united Jerusalem as Israel’s capital, and the relocation of the American Embassy to Jerusalem. The Central Council called on the Biden administration to honor promises to end Israeli settlements, reopen the PLO offices in Washington, and re-open the U.S. Consulate in east Jerusalem.
“Economic Peace”
The Central Council rejected the idea of “economic peace” that the Biden administration is now trying to promote as a temporary step until the political process is renewed. But in practice, Abbas, as head of the PA, already responded to this initiative of the Biden administration when he met with senior American officials in Ramallah – Hady Amr, who is in charge of the Palestinian desk at the State Department, Secretary of State Tony Blinken, and National Security Advisor Jake Sullivan.
Israel also responded to the request of the Biden administration, with Defense Minister Benny Gantz assigned the task. Gantz has already met twice with PA Chairman Abbas and his associates Hussein al-Sheikh and Majed Faraj. In those meetings, Israel granted the PA economic relief related to Palestinians working in Israel and family reunification.
The decisions made by the PLO Central Council are subject to the approval of Abbas, who does not want a confrontation with the Biden administration or Israel, especially in light of the PA’s dire economic situation. He, therefore, continues the talks on strengthening the Palestinian economy while making it clear that this is not a substitute for a “political horizon” and the resumption of negotiations between the two sides.
Don’t Fight the White House
The Palestinian strategy now is to avoid fighting with the Biden administration and the Israeli government. The PA is undertaking a serious political effort to re-open the PLO offices in Washington and the American Consulate in Jerusalem. Its main task at the moment is to erase the steps taken by the Trump administration and to turn back the clock on Jerusalem’s status.
Abbas is happy to receive economic and humanitarian largesse from Israel, but this is not what he really wants. Senior PA officials report that Abbas outright rejects the “economic peace” ideas that the Biden administration and Israel are trying to promote. These ideas have no political horizon; therefore, the chairman demands the convening of an international peace conference for Middle East Peace under the auspices of the Quartet (the United States, the UN, the European Union, and Russia) that will force Israel to accede to international declarations about retreat to 1967 lines and recognition of a Palestinian state with eastern Jerusalem as its capital.
Abbas clarified his intentions to National Security Adviser Jake Sullivan during the latter’s visit to Ramallah on December 21, 2021, as well as to Defense Minister Benny Gantz, with whom he met at his home in the Israeli town of Rosh Ha’ayin on December 28, 2021, according to senior Fatah officials.
Abbas explained that he was looking for an Israeli partner for peace and that without a political horizon, all economic and security ideas would not lead to any solution. On January 2, 2022, Palestinian Prime Minister Mohammed al-Shatiyeh said that the Palestinians aspired to gradually disengage from the Israeli economy and improve Palestinian national GDP.
PA Losing the West Bank
In recent months, the PA has lost power and control in several areas of the West Bank, specifically in Hebron, Jenin, and probably in Nablus.
In Nablus, the al-Aqsa Martyrs Brigades affiliated with Fatah is operating again, and it challenges the PA and Israel from a security standpoint. In Jenin, new cells of Fatah and the Iranian-affiliated Islamic Jihad were formed; in the latter case, it called itself the Jenin Battalion.
These independent military groups acquire their own weapons and ammunition without outside funding. They operate against Israel to undermine the security situation. Their operatives are members of the new generation born after the signing of the Oslo Accords or during the “second intifada.”
The PA failed to deal with the armed groups in the Jenin refugee camp, and the IDF has been forced to operate in the camp after a pause of several months. Thousands of illegal weapons and large quantities of ammunition are circulating in the Jenin area and these armed groups are attacking IDF soldiers when they enter Jenin to arrest wanted persons.
Israeli security officials are concerned about the enormous quantities of illegal weapons in the West Bank, even though large amounts are also used for self-defense purposes in the event of factional or clan fights.
The United States also closely monitors the functioning of the PA’s security forces, which are supported by $30 million annually, and the Biden administration wants to make sure that Maj. Gen. Majed Faraj, head of the General Intelligence Service and considered the “strongman” in the West Bank, does deliver.
The PA’s new security activity also has implications for the battle of succession at the top of Fatah. If the PA is losing power and authority in several areas of the West Bank while Mahmoud Abbas is alive and functioning, Israeli and American security officials ask, what will happen on the ground after he dies?
Economic Hardship
The PA is suffering from a major budget crisis with a deficit that reached $1.4 billion in 2021.
According to Israeli security officials, in 2021, the PA received only 17 percent of the total financial commitments for assistance from the United States, Europe, and other countries, creating a significant deficit and delaying the execution of many projects.
Arab countries stopped economic assistance to the PA in part due to the rise of close relations between Israel and the countries of the Abraham Accords, and the PA’s relations with the EU deteriorated in terms of economic support because there have been no elections in the West Bank since 2006.
PA officials claim that the EU has agreed to transfer $29 million to the PA this year on the condition that it commits to comprehensive reforms to its mechanisms. The EU continues to support the [the United Nations Relief Works Agency [UNRWA] and has allocated $55 million in annual aid to the refugee welfare and employment agency.
In 2019, Israel activated the “offset law” approved by the Knesset, which requires annual cuts to the PA in the amount the PA uses as funds for terrorists and their families every month, affecting the PA’s cash flow and increasing its deficit.
The Biden administration has renewed financial support for UNRWA that the Trump administration had discontinued, but that does not help the PA directly. In addition, The Taylor Force Act, passed by Congress and signed into law, prevents American financial aid paid directly to the PA until the PA stops paying salaries to terrorists.
In response to both the U.S. and Israel, Abbas has said the PA would continue the payments.
To overcome its financial liquidity problem and pay salaries to its officials, the PA has been forced to take loans from local banks at high interest rates.
Corruption
The PA does not deal seriously with the effects of cronyism and financial corruption. The result has been that the Palestinian public in the West Bank has lost external assistance from a number of countries around the world for projects that would help the people.
The Palestinian parliament is paralyzed by the split between the West Bank and Gaza Strip and the deep disagreement between Fatah and Hamas that resulted in open warfare in 2007. As a result of the divisions, there is no oversight of the PA’s financial activities. Abbas controls the judicial system and security apparatuses, which permits senior PA officials to continue their acts of financial corruption without fear of being punished.
Senior Fatah officials accuse PA officials of setting up fictitious companies to facilitate the theft of funds, and they claim that Mahmoud Abbas is aware of the situation but turns a blind eye.
Conclusion
The combination of years of corruption, malfeasance, and sclerotic leadership, brings the unavoidable conclusion is that the West Bank in for economic challenges and a further loss of control by Abbas and the PA in favor of Hamas and other military forces.
Yoni Ben-Menachem is an Israeli journalist and a Senior Researcher at the Jerusalem Center for Public Affairs (JCPA).
