Israel's Decision To Withhold Tax Money From Palestinians May Impact Security

West Bank's 165,000 Civil Servants Go Unpaid

Unpaid: The decision to withhold revenue from the P.A. is impacting the Palestinian economy as well as Israel’s security.
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Unpaid: The decision to withhold revenue from the P.A. is impacting the Palestinian economy as well as Israel’s security.

By Ben Lynfield

Published January 26, 2013, issue of February 01, 2013.
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The construction sector, once an engine of the economy, “is moving at 30% of its capacity” because the government is not starting new projects and because people don’t have money to buy apartments, according to Adel Odah, head of the Palestinian Contractors Union.

Odah told the Forward that his construction company, Adel Bader which built schools in the Ramallah area and used to employ 60 workers, is now completely inactive. “I’m surviving from my savings. I can live for another year, no problem,” he said.

But Odah realizes that most people are not as fortunate. He predicts that the desperation — if it continues — will erupt in violence. “We cannot know exactly what kind of trouble, but there will be trouble,” he said. “It will be a disaster not only for us, but also for the Israelis.”

Among Palestinians, there is a wide perception that Hamas — the militant rival of the Fatah party, which controls the P.A. — emerged victorious from the Gaza conflict of last year and won concessions from Israel through its use of armed force. This only exacerbates the situation. In 2011, Hamas, which rejects Israel’s legitimacy, also won the release of 1,027 Palestinian security prisoners in exchange for its release of Israeli soldier Gilad Shalit, whom the group seized in 2006.

Hamas’s indirect negotiations with Israel via Egypt in each of these episodes contrast with the lack of negotiations between Israel and the P.A., for which each side blames the other. Hamas’s perceived victories have radicalized public opinion and rendered P.A. President Mahmoud Abbas’s strategy of negotiation and diplomacy less popular.

In this environment, Israel’s policy of withholding tax revenues “is endangering the P.A., whose existence is an Israeli interest,” said Gadi Zohar, a retired general who headed Israel’s military administration in the West Bank and Gaza. “If the authority falls, Israel will have to provide services to the population, and the budgetary burden will fall on Israel. The Palestinian security forces, which have been a major component in keeping the calm, will be dispersed and won’t do their job. It will fall on the army.”

“Whether by design or not,” Zohar said, Israeli policy in recent years has been strengthening Hamas at the expense of Abbas. With further economic deterioration, he warned, “we might one day see an attempt by Hamas to do what it did in Gaza,” where it staged an armed takeover in 2007. “Weakening of the P.A. strengthens Hamas.”

Regev denied that Israel’s policies were having any such effect. The real problem, he said, is Abbas’s refusal to negotiate with Netanyahu unless Israel institutes a comprehensive freeze on expanding its settlements in the West Bank during these talks.

“We could be in a very different place today had Abbas and the P.A. not rejected the path for peace,” Regev said. “They have failed to get anything, because they haven’t negotiated.”

Assistant managing editor Larry Cohler-Esses contributed to this story.

Contact Ben Lynfield at

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