Yellen Urges Israel to Restore Economic Ties to West Bank

In a letter sent to Prime Minister Benjamin Netanyahu of Israel, Treasury Secretary Janet L. Yellen emphasized the importance of increasing commercial engagement with the West Bank. She believes this is crucial for the economic well-being of both Israelis and Palestinians. Yellen expressed her concerns about the economic consequences of the war between Israel and Hamas, urging Israel to reinstate work permits for Palestinians and reduce barriers to commerce within the West Bank.

During a news conference in Brazil, Yellen stated that these actions are essential for the economic welfare of both Palestinians and Israelis. She raised the alarm that Israel’s actions are negatively impacting the West Bank economy, reducing income, and also affecting Israel’s economy.

Yellen’s letter coincided with the resignation of the Palestinian Authority cabinet, as they aim to revamp themselves and potentially take over the administration of Gaza post-war. Negotiations between Israel and Hamas are also underway as mediators work on a deal to release hostages in exchange for a temporary cease-fire.

The Biden administration is focused on mediating a resolution to the conflict in Gaza and monitoring the economic implications of the war. Yellen stressed the importance of a financially stable West Bank and the need for Israel to ensure tax revenue reaches Palestinians in the region.

Yellen commended the recent agreement between Israeli and Palestinian officials to transfer frozen tax funds to the West Bank. She urged the Israeli government to continue releasing revenue to support basic services and the economy in the region. Yellen also discussed the impact of Russia’s war in Ukraine and called for Western allies to provide more aid to Ukraine.

She suggested utilizing Russia’s frozen central bank assets to support Ukraine’s resistance and long-term reconstruction, emphasizing the legal, economic, and moral case for such actions. Economic leaders from the Group of 7 nations are exploring options on how to use Russia’s assets to benefit Ukraine, with seizing the assets directly being considered.