'Palestinian Authority' Shakier Than Ever

One of the major consequences of the so-called “Peace Process” set in motion in 1993 through the Oslo Accords was the establishment of the Palestinian Authority (PA) as Israel’s putative “partner for peace” in the negotiations, intended as the interim government of a Palestinian state in the process of becoming. The idea was that the basic structures and institutions of a civil society would be developed, which would then lead to the rise of a typical nation-state.

As the old saying goes, the road to Hell is paved with good intentions.

The PA has done few, if any, of the things required for a “state-on-the-way.” Indeed, as the landmark judgment handed down in New York earlier this week clearly demonstrated, the PA has been guilty not merely of ignoring the preparations for peace and normal statehood but of constantly inciting hatred, hostility, and deadly terrorist action against Israel and anyone who visits her. The judgment hits the PA with $655.5 million in civil damages for actions leading to the deaths and serious injury of American citizens visiting and studying in Israel. Together with other issues, it seriously threatens the financial stability of the kleptocratic nascent state.

Under the arrangements which brought the PA into being, the Israeli state collects customs and value-added tax (VAT) for goods and services imported from abroad into the territories controlled by the PA, as well as for Israeli goods and services provided in those territories. The reason is that the Palestinians themselves are not capable of handling the necessary volume of imports required (which tells you that very little besides basic agricultural products is actually produced there). These monies, which are supposed to be reimbursed to the PA, constitute roughly two-thirds of the revenue from taxes and fees generated in the Palestinian territories.

However, as implied above, the PA has not been negotiating in good faith with Israel. In fact, it has not been negotiating at all, but over the last year or so has been trying to make an end run around the Oslo procedures. It is seeking premature recognition as a “state” from various sympathetic European governments (most recently Sweden), as well as seeking to join various international bodies such as the International Criminal Court (ICC) in which membership is normally reserved for actual states. Israel has responded to these illegal, unilateral acts by withholding the customs duties, etc., which now amount to some $127 million and climbing, putting a considerable dent in the PA’s finances.