Elliott Abrams

Pressure Points

Abrams gives his take on U.S. foreign policy, with special focus on the Middle East and democracy and human rights issues.

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Israel and the Palestinians: A Sad Tale of High Finance

by Elliott Abrams
July 2, 2012

Who is helping the Palestinians in the financial crisis the Palestinian Authority now faces? The United States and the nations of the European Union are the largest donors. Arab nations, including the very wealthy oil producers, have never been particularly generous. Israel, of course, is almost universally reviled for its “oppression” of Palestinians.

But now we learn that it was Israel who intervened with the IMF to seek a one billion dollar loan for the Palestinian Authority. The Daily Star newspaper of Beirut reports as follows:

OCCUPIED JERUSALEM: Israel sought a $1 billion IMF bridging loan for the Palestinian Authority earlier this year, but was turned down, an Israeli newspaper said Monday in a report confirmed to AFP by a senior Israeli official.

Haaretz reported that Israel’s central bank chief Stanley Fischer approached the International Monetary Fund for the money after discussing the Palestinian Authority’s financial crisis with Palestinian prime minister Salam Fayyad.

Sometime after the IMF’s annual conference in mid-April, Fischer asked the body for the loan, which Israel would have taken on the Palestinians’ behalf.

Israel would then have transferred the money to the Palestinian Authority (PA) headed by president Mahmoud Abbas, which would have repaid the money to the Israeli government.

Israel would have remained responsible for repaying the loan to the IMF, under the deal, but the institution eventually declined to make the loan available.

Haaretz said it turned the proposal down because it feared setting a precedent of making IMF money available to non-state entities, like the Palestinian Authority, which as a non-state cannot directly request or receive IMF funding.

That “Occupied Jerusalem” dateline is a reminder that Israel is trying to assist the Palestinian Authority despite the attacks on it from Arab capitals and much of the world’s news media. The IMF may have been right to refuse this particular step, but it would not have been necessary to try it had more aid from Arab states been forthcoming. So in this tale the Palestinians get nothing, Israel gets no credit for its efforts, the Arab oil exporters keep their money, and the only thing that continues to flow is an endless stream of denunciations of the Jewish State. Despite all that is new in the Middle East, some things never seem to change.

Post a Comment 3 Comments

  • Posted by Bill Ellis

    So a Nation can get an IMF loan and give lend it out to Corporations, but not a non-state entity ?
    Insane.

  • Posted by irene

    Hello Ellliott,
    A better headline and a better first paragraph would have permitted Israel to get more credit for its efforts. We are all busy. Headlines and first paragraphs really matter. Many readers never go beyond them. Would a person be encouraged to look at the whole article based on the description that appears under “Recent Posts,” which looks like same-old-same-old:
    “Israel And The Palestinians: A Sad Tale Of High Finance
    Who is helping the Palestinians in the financial crisis the Palestinian Authority now faces? The United States and the nations…”
    How about retitling the article “Israel Sought $1 billion loan for Palestinians, IMF declined.”

  • Posted by Dean Smallwood

    Could it be that the IMF considers the PA a “bad risk” in more ways than one ?

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