In accordance with recent Knesset legislation, Israel has deducted from the taxes it collects on behalf of the PA the amount the latter pays to terrorists and their families. Mahmoud Abbas, the president of the PA, has as a result refused to accept any tax revenue transferred by Jerusalem short of the whole amount, thus threatening to precipitate a financial crisis that could cause the collapse of the PA. Efraim Inbar comments:
The Palestinian strategy is clear. Abbas is trying to scare Israel and the world community into believing the relative stability in the West Bank will come to an end, leading to chaos and terror. The PA leadership is emulating Hamas’s behavior by threatening that a humanitarian disaster will ensue unless more financial aid is rendered. Hamas has been playing this same game for years in Gaza. Israel and other international actors—the United States is a sober exception—seem to fall repeatedly for these Palestinians schemes.
It is true that a certain level of economic prosperity in the PA is conducive to stability. Hungry neighbors always pose trouble. Unfortunately, poverty is often cynically employed by authoritarian regimes such as Hamas and the PA as a foreign-policy tool to gain attention and financial aid. In fact, the Palestinian leadership needs a certain number of hungry subjects as a precondition for continuous international support. . . . The Palestinian elite eats well in any case. . . .
Israel, [however], is doing more than its share to bolster the Palestinian economy—providing jobs to Palestinians in the Israeli labor market; supplying water, electricity, and health services to Palestinians; and keeping Hamas from overthrowing Abbas. Moreover, it is active in raising funds internationally for the PA.
And thus nobody should cave to Palestinian blackmail. While it is best for all concerned to ensure a decent standard of living for Palestinians in the West Bank and Gaza, it is highly unlikely that the PA will economically collapse. After all, the PA is a very good business for the kleptocratic leaders of the regime in Ramallah. Marked by corruption and nepotism, the PA is a source of significant income for Abbas and his coterie. This gang will not kill the goose that lays the golden eggs.