Mahmoud Abbas (center), president of the Palestinian Authority, with his delegation at the General Assembly. Members of the U.N. General Assembly voted 138 to nine in favor of a draft resolution that seeks nonmember state observer similar to that of Vatican City. Photo by: Rick Bajornas / United Nations

The Palestinian Authority has emerged successful in its bid for upgraded status at the United Nations. But with the recognition comes the loss of crucial financing from Israel and potentially of aid from Canada and the United States.

Members of the U.N. General Assembly voted 138 to nine in favor of a draft resolution that seeks nonmember state observer similar to that of Vatican City. Forty-one, including Germany, abstained. The United States, Israel and Canada led the no votes, arguing that the resolution is counterproductive to negotiations toward a two-state solution to the conflict in the region.

Following the vote, Israel announced Dec. 2 that it will not transfer some $100 million worth of taxes it has collected on behalf of the Palestinian Authority this month. Israel said the money will be used to help pay off Palestinian debt to the Israeli Electric Corp. worth $200 million, but some experts describe it as a punitive move.

Only the transfer of revenues for December will be withheld but the loss of the expected funds is expected to deal a heavy blow on the Palestinian Authority’s already strained budget.

Additionally, the Palestinian Authority now faces the potential loss of foreign assistance from Canada and the United States.

Canada has put its aid to the Palestinians — worth 300 million Canadian dollars ($302.2 million) — under review as Minister for Foreign Affairs John Baird meets with his senior diplomats to discuss the issue, The Ottawa Citizen reports.

Meanwhile, a bipartisan group of U.S. lawmakers have introduced a reform proposal that seeks to cut financial assistance to the Palestinian Authority if it files complaints against Israel in the International Criminal Court — a privilege the Palestinians now enjoy with their new U.N. status. The group consists of Republican Sens. Lindsey Graham of South Carolina and John Barrasso of Wyoming and Democrat Sens. Robert Menendez of New Jersey and Chuck Schumer of New York. 

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About the author

  • Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.

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