Saudi Arabia Sends $90 Million To Rescue PA From Financial Collapse
Saudi Arabia has delivered a major financial infusion to the Palestinian Authority (PA) as the PA struggles to function under mounting budget shortfalls and prolonged limits on revenue transfers from Israel. The $90 million grant, handed over at the Saudi Embassy in Amman, is intended to keep basic services running in the West Bank, where many civil servants have been paid only partial salaries for months.
The contribution comes at a moment when the PA is facing its most severe financial pressure in years. Israel’s Finance Ministry, led by Bezalel Smotrich, has repeatedly blocked the monthly transfer of tax revenue that Israel collects on Palestinian imports under longstanding economic arrangements dating back to the Oslo period. Those funds make up the bulk of the PA’s operating budget.
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Smotrich halted the transfers as retaliation for the PA’s previous stipends to paid families of prisoners and terrorists under the “Pay for Slay” program. Although PA President Mahmoud Abbas insists the system of remuneration for prisoners and their families has been reformed into a needs-based program, Israeli officials have expressed skepticism that actual change has taken place.
It has also been reported that Smotrich delayed the transfer of funds to the PA in response to numerous countries recognizing Palestinian statehood at the United Nations, a move criticized by Israel’s government, which opposes the establishment of a Palestinian State.
Smotrich has threatened additional measures affecting Palestinian banks. A temporary waiver allowing Israeli banks to continue working with Palestinian financial institutions was extended for two weeks, leaving uncertainty beyond mid-December.
The PA’s financial collapse has become a broader diplomatic issue. France, Norway, Spain and Saudi Arabia have launched efforts to rally outside donors, while the United States previously pressed Israel to release at least part of the funds during the war. The current American administration, however, has applied less pressure.
