Palestinian economy in ‘crisis’ over Israel standoff: WB

19 April, 2019 12:00 AM printer

JERUSALEM: The World Bank warned Wednesday of a deepening economic crisis in the occupied West Bank if the Palestinian Authority and Israel do not resolve a dispute over tax transfers.

Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through its ports, and then transfers the money to the PA, reports AFP.

In February, Israel decided to deduct around $10 million a month from the revenues — the sum the PA paid families of prisoners or prisoners themselves serving time in Israeli jails — prompting the Palestinians to refuse any funds at all.

Israel sees the payments to those who have carried out attacks against Israelis as encouraging further violence.

The PA describes the payments as a form of welfare, while Palestinians venerate prisoners jailed by Israel as heros for their cause.

In its Wednesday report, the World Bank said the unresolved standoff deepened a “fiscal crisis” that could increase the PA’s financial gap from $400 million in 2018 to one “exceeding $1 billion in 2019”.

“This is expected to choke economic activity, threatening to push the West Bank into negative growth,” the World Bank said.