The Biden administration is seeking to provide financial assistance to the Palestinian Authority (PA), as its officials warn that it is rapidly running out of cash. The US administration hopes that the PA will be able to govern Gaza when the war in Gaza is over, according to a report in The Wall Street Journal (WSJ).
The PA has warned that they will run out of money to pay salaries to government employees by the end of February. If the group runs out of money, the Biden administration is concerned that more extremist groups could take control of the West Bank.
In 2018, the US Congress enacted the Taylor Force Act, which suspended US aid for the PA because of its policy of providing payments to Palestinians accused of terrorism and their relatives, known as "pay for slay." The US administration is currently attempting to circumvent this legislation while also trying to encourage its allies to give more to the organization.
The Biden administration is seeking to revitalize the PA so it can take control of Gaza when the war ends; however, the administration is currently concerned that without an increase in revenue, the PA will not even be able to hold on to its authority in the West Bank, according to the WSJ.
The PA in financial crisis
The PA’s main source of revenue came from assistance from the US and Europe and tax revenue from Israel. Israeli tax revenue to the PA has been suspended since the October 7 massacre against Israel.
Although it was initially decided that only revenue for the PA’s employees in Gaza would be suspended to prevent the money from getting into the hands of Hamas terrorists, the PA responded that it would not accept any partial revenue transfers in November.
As of February, Norway has agreed to assist in transferring the frozen tax funds designated for the PA that had been collected by Israel. This agreement resumes payments to the PA.
In January, an agreement had been made for the US to transfer funds to Norway for safekeeping until an arrangement could be found that would alleviate Israel’s concerns that the money would be funneled into the hands of Hamas.
According to the PA, it has been in a financial crisis since 2020 and is now operating under "the most restrictive budget," the WSJ reported.
Even before the October 7 massacre, since April 2021, the US had already sent nearly half a billion dollars to Palestinians through USAID, UNRWA, and additional organizations for humanitarian aid purposes, according to the US Department of State.
Reuters contributed to this report.