Jonathan Cook: the Blog from Nazareth - www.jonathan-cook.net

Why Israel cannot let the PA fail

This is one to put in the chutzpah file.

Today the Israeli cabinet approved confiscating more than $100m in tax receipts – mostly customs duties on Palestinian imports – it collected this month for the Palestinians under the Oslo accords and using it to bail out the Israel Electricity Company, which is billions in the red because of massive economic mismanagement, much of it down to a failure of oversight by the Israeli government itself.

This is another plank in Israel’s punishment of the Palestinians for pursuing their UN upgrade, to add to the 3,000 new settler homes.

Yuval Steinitz, the Treasury Minister, observed: “We will not collect their [the PA’s] taxes for them and we will not transfer their tax revenues.”

Well, that’s about as big a political lie as you’ll find. Israel does collect the taxes and will continue to do so because it wants the PA to be entirely economically dependent on Israel for the transfers (plus it rakes off some the money collected in charges). If only Israel would stop collecting such custom duties. Then the PA would need its own airport and sea port (in Gaza) to bring in the goods itself. How happy would Israel be about that?

Also, Israel cannot afford to let the PA collapse – and as the main employer, the PA needs those revenues to pay its workforce. So Israel has two choices: let the PA fail and reoccupy the West Bank, or quietly relent in the coming weeks. I guess it will relent, possibly after the Israeli elections and probably claiming US pressure.c

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