Yellen urges Israel to restore economic ties with the West Bank
Treasury Secretary Janet L. Yellen said Tuesday that she had personally urged Prime Minister Benjamin Netanyahu of Israel to increase commercial involvement in the West Bank, arguing that it was important for the economic well-being of both Israelis and Palestinians.
Ms. Yellen’s plea was laid out in a letter she sent to Mr. Netanyahu on Sunday. It represented her most explicit public expression of concern about the economic consequences of the war between Israel and Hamas. In the letter, Ms. Yellen warned of the consequences of the erosion of basic services in the West Bank and called on Israel to reinstate work permits for Palestinians and reduce trade barriers in the West Bank.
“These actions are vital to the economic well-being of both Palestinians and Israelis,” Ms. Yellen said at a news conference in Brazil ahead of a meeting of finance ministers from the Group of 20 countries.
The letter came as the Palestinian Authority cabinet, which administers part of the Israeli-occupied West Bank, submitted its resignation on Monday in the hope that it could overhaul itself in a way that would allow it to potentially control Gaza to take over after the war ends there. Negotiations between Israel and Hamas are also set to resume this week in Qatar, as mediators from that country, along with the United States and Egypt, work on an agreement to release a number of hostages held by Hamas in Gaza, in in exchange for Israel agreeing to a temporary ceasefire. firework.
Senior Biden administration officials have tried to mediate a solution to the conflict in Gaza, which health authorities say has killed about 29,000 Palestinians there. Ms. Yellen has focused largely on identifying the economic implications of the war and managing the sanctions the Treasury Department has imposed on Hamas and those involved in its financial network.
While the Biden administration is concerned about the humanitarian crisis unfolding in Gaza, it is increasingly concerned that economic turmoil in the West Bank could fuel violence and further deteriorate living standards there. The war has already taken its toll on the Israeli economy shrank by almost 20 percent in the fourth quarter of last year.
Ms. Yellen’s letter highlighted the steps the United States has taken to disrupt Hamas’ financial networks and how Israel benefits from an economically stable West Bank. She also said the suspension of permits for West Bank workers had led to significant unemployment while hurting the Israeli economy.
The Finance Minister called on Israel to ensure that tax revenues reach Palestinians in the West Bank.
Since Hamas’ brutal attack on Israel on October 7, the Israeli government has been withholding tax revenues it collects on behalf of the Palestinians. Traditionally, that money is returned to the Palestinian Authority, which used it to finance its operating budget. Israel has previously frozen and then released those tax revenues during periods of conflict with the Palestinians.
White House National Security Communications Advisor John Kirby said last month that President Biden had discussed with Mr. Netanyahu the need to ensure that tax revenues are available to pay the salaries of Palestinian security forces in the West Bank.
Ms. Yellen said Tuesday she was encouraged that revenues were beginning to make their way to the West Bank. That money started flowing after an agreement between Israeli and Palestinian officials earlier this month use Norway as a temporary intermediary to transfer the tax funds that Israel had frozen.
“The United States has urged the Israeli government to release clearance revenues to the Palestinian Authority to fund basic services and strengthen the West Bank economy,” Ms. Yellen said. “I welcome the news that an agreement has been reached and money is starting to flow. This must continue.”
The finance minister said the war in Gaza has not yet had a significant impact on the global economy. The United States, she said, continues to look for ways to get aid to innocent Palestinians and strengthen the West Bank’s economy.