The Palestinian Authority is on the verge of financial collapse — and that’s not just a problem for Palestinians. It is also bad news for the United States and Israel, both of which say they support a future Palestinian state. Unrest is spreading in the West Bank over high prices and delayed salary payments by the Palestinian Authority, the area’s largest employer. Economic woes add to mounting frustration after four years of stalled peace talks.
The authority’s budget shortfalls can be attributed to the financial crisis in Europe, which hit major donors, and to the failure of Arab governments to make good on pledges. If Saudi Arabia, which claims to support the Palestinian cause, were more reliable with its payments, other Arab countries would follow suit. But the US Congress is also to blame for cutting off payments following Palestinian Authority President Mahmoud Abbas’s first bid for statehood at the United Nations last year. Secretary of State Hillary Clinton restored some, but not all, of these funds.