PA AGAIN REQUESTS CASH SHIPMENTS TO GAZA

C O N F I D E N T I A L JERUSALEM 000175 SIPDIS NEA FOR FRONT OFFICE AND IPA, NSC FOR SHAPIRO/PASCUAL, TREASURE FOR PARODI/VINOGRAD/VELTRI E.O. 12958: DECL: 01/21/2019 TAGS: ECON EAID KWBG PGOV PINR PTER IS SUBJECT: PA AGAIN REQUESTS CASH SHIPMENTS TO GAZA REF: JERUSALEM 71 Classified By: Consul General Jake Walles for reasons 1.4(b) and (d) ¶1. (SBU) Summary: The Palestine Monetary Authority (PMA) has again asked the Bank of Israel (BOI) to approve the transport of banknotes to Gaza bank branches. UNRWA successfully transported USD 16 million and NIS 20 million into Gaza on January 20 and 22. No cash has been transferred from the West Bank to Gaza aside from this since December 11. Securing cash shipments for Gaza's banks is now a top priority for donors and the PA, who note that the lack of cash prevents many Gazans from purchasing basic commodities. Separately, Hamas announced that it will begin immediate cash payments to compensate Gazans for losses inflicted during the conflict. End summary. PMA Submits (Yet Another) Cash Request to BOI -------------- ¶2. (SBU) On January 22, the PMA requested BOI approval to transport NIS 100 million (USD 26 million) worth of banknotes from the West Bank to Gaza. This request follows the PMA's January 7 request to transport NIS 243 million (USD 63 million) from the West Bank to Gaza "immediately following the cessation of hostilities" (reftel). The GOI did not respond to the PMA's January 7 request. The PMA confirmed on January 22 that it still needs the full amount, but has come to accept that the GOI will only approve smaller amounts. (Note: After significant lobbying by the USG, Tony Blair, and others, the GOI did approve a NIS 100 million shipment to Gaza on December 11. End Note.) ¶3. (SBU) Separately, the GOI granted approval for UNRWA to transport USD 16 million and NIS 20 million into Gaza. UNRWA transported the cash into Gaza in two separate shipments on January 20 and 22, and will use it to disburse salaries for staff and to pay program beneficiaries, social hardship cases, and suppliers. Gaza Banks Open, But Limit Withdrawals -------------- ¶4. (C) Most banks in Gaza re-opened on January 19, and all branches except one had re-opened by January 22, according to the PMA. Banks allow account holders to withdraw cash, but cap withdrawals at NIS 500 (USD 130) due to the lack of banknotes. PA employees in Gaza have been most affected by the limitations on withdrawals; they have not been able to access salaries paid into their accounts at the beginning of January and face the prospect of not getting access to their full salaries due to be paid next month. ¶5. (SBU) ConGen contacts in Gaza reported long lines in front of cash counters and ATMs since the banks re-opened. Relief agencies noted that the lack of cash has become a significant humanitarian issue. According to a rapid assessment undertaken by CARE International, 86 percent of Gazans face a cash shortage. Without cash, they cannot buy goods in stores. (Approximately 60 truckloads of commercial goods and foods for the private sector enter through Kerem Shalom crossing daily.) UNRWA has been forced to add some PA employees to its welfare rolls who cannot meet basic needs withot access to their bank accounts. Hamas Capitalies -------------- ¶6. (C) OCHA Gaza deputy director Aiden O'Leary told Econoff on January 23 that Hamas announced cash payouts to Gazan families who suffered during hostilities, with a total of 40 million Euros paid out according to a sliding scale: 4,000 Euros to families whose homes were completely destroyed; 2,000 Euros to families whose homes were damaged; 1,000 Euros for every family member killed; and 500 Euros for every family member wounded. Press reports of Hamas payouts put the total closer to 30 million Euros (USD 40 million). O'Leary said UN agencies need to get cash to Gazan families immediately for repairs and reconstruction to compete with Hamas' payments, or "Hamas will clean the boards." WALLES