PJ Media
by Avner Zarmi, February 25, 2015

Unpaid electricity bills result in blackouts, and a huge financial ruling finds it liable for terror.

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.

Roughly 95% of the electricity used in the “West Bank” territories of Yehuda and Shomron and 75% of the electricity used in the Gaza Strip is supplied by the Israel Electric Company (IEC). This reality has had surrealistic consequences. For instance, at the height of the Hamas rocket barrage and Israeli incursion into Gaza last summer, the electricity continued to be supplied, cut only when one of the main high-tension wires was accidentally cut by a rocket fired from Gaza into Israel. The days that it took to repair the damage and restore power were marked by strident, hand-wringing pronouncements about the “humanitarian crisis” brought about by the Hamas-caused power outage in the midst of a war which Hamas had started.

The PA has been decidedly remiss in paying its electric power bills, and now stands, by IEC calculations, over $453 million in arrears. So, this week the IEC has begun to institute a system of “rolling blackouts” to Palestinian cities until the bills begin to be paid, starting with an hour’s power cut in the morning and another in the evening.

About 63% of this amount is owed by the Jerusalem District Electricity Co. (JDECO), a Palestinian firm servicing East Jerusalem, Bethlehem, Ramallah, and Jericho. The rest is owed directly by the PA. JDECO’s CEO, Hisham Omari, attributed the financial crisis to three main causes, in a statement to the Jerusalem Post. First, is the PA’s failure to enforce its own law against those who steal electricity from JDECO’s power grid; second, is the failure of many PA government offices to pay their bills to JDECO; and third is the failure of residents in the 12 UN-recognized “refugee camps” within JDECO’s service area to pay their bills at all. Despite all this, Omari labeled the power cuts “inhumane”: the mayor of the city of Nablus (known as Shechem to Israelis and in the Bible) termed the action “collective punishment.”

Despite the fact that any ordinary Israeli customer of the IEC who had accumulated arrears over many months would be facing consequences much more severe than “rolling blackouts,” the IEC’s action has met with more hand-wringing from the U.S. State Department: “We’re concerned about the impact on the ground of any cuts to basic services, including electricity,” spokeswoman Jen Psaki told reporters.

Anticipating U.S. and EU disapproval, Israeli Prime Minister Binyamin Netanyahu and Defense Minister Moshe Ya’alon have both expressed opposition to IEC’s actions and distanced themselves from the decision of the utility’s board of directors to institute the cuts.

Psaki also said:

We remain very concerned about the continued viability of the Palestinian Authority if they do not receive funds soon, either in terms of the resumption of monthly Israeli transfers of Palestinian tax revenues or additional donor assistance.”

She basically reiterated statements made last week, typically making no reference to the PA’s illegal unilateral actions,or to the repeated terrorist activities of Hamas, an official party to the PA.

In other words, the PA cannot support itself, will not behave responsibly, and survives only as a leech on international life-support while continuing its low-level war against Israel. Such is Israel’s “partner for peace.”


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