Signaling Riyadh-Ramallah rift, Saudi Arabia cuts PA funding

Senior Palestinian officials say around $120 million of financial aid has been withheld over last 6 months

BY AVI ISSACHAROFF, TOI

Without providing proper warning or an explanation to Ramallah, Saudi Arabia has been holding back financial aid earmarked for the Palestinian Authority for over six months, senior PA officials say.

Saudi Arabia had been paying $20 million a month to the PA as aid to the cash-strapped Palestinian government in the West Bank when they suddenly shut the tap.

While there has been no official announcement from either Riyadh or Ramallah, The Times of Israel has learned that the payments stopped over half a year ago with no clear reason given for the cessation.

Palestinian sources said that several emissaries from the Palestinian Authority have attempted to find out the reasons for the funding freeze but were not given full answers by the Saudi government.

The Palestinian Authority is working on the assumption that the freeze is due to an across-the-board cut in Saudi Arabia’s funding of foreign countries based on its own budgetary strains, but some sources assess that Riyadh may be unhappy with PA President Mahmoud Abbas.

In recent weeks, Abbas has locked horns with a number of Arab leaders who have been pressuring him to patch up differences within Fatah and make peace with former Gaza strongman Mohammad Dahlan, considered a main rival.

Those leaders have included King Salman of Saudi Arabia, Egyptian President Abdel-Fattah el-Sissi, Jordan’s King Abdullah and United Arab Emirates President Khalifa bin Zayed Al Nahyan.

Abbas’s fierce opposition to Dahlan’s return is both personal and political.

Dahlan is regarded as close to the UAE’s ruler and the Egyptian president, and his name is mentioned — mainly by Israeli commentators — as a contender to replace Abbas when the time comes.

Palestinian Authority President Mahmoud Abbas (right) and Mohammad Dahlan leave a news conference in Egypt, in February 2007. (AP/Amr Nabil)

Abbas fell out with Dahlan after the latter made thinly veiled corruption allegations against the PA president’s two businessman sons in 2010. Earlier this year, Abbas countered that Arab leaders should stop meddling in internal Palestinian affairs — rare public criticism of Arab allies by a leader whose people depend on Arab financial and diplomatic support.

With around $120 million of Saudi aid having been withheld so far, the freeze in funds threatens to cause serious budgetary problems for the Palestinian Authority.

Earlier this month the PA lost another key source of funding with a UK government decision to cut a third of its aid to Ramallah because of its payment of stipends to the families convicted terrorist serving time in Israeli prison.The UK Department for International Development ordered a review of the PA’s role in funding salaries to terrorists, effectively freezing some £25 million (roughly $30 million) in the current fiscal year, or about one-third of the UK’s total aid to the PA, according to a report in the Sun daily.

The two developments could spell financial disaster for the PA, which relies heavily on foreign aid. In 2012 Saudi Arabia helped prevent a financial crisis by transferring $100 million to the PA, days after then-rime Minister Salam Fayyad warned of a imminent catastrophe.

Times of Israel staff contributed to this report.