On Ramadan’s eve, severe financial crunch hitting occupied territories

[ 30/07/2011 – 05:28 PM ]

From Khalid Amayreh in Ramallah

Muhammed and Sarah Sawabha live at a middle class Ramallah neighborhood, with their six children, including two college students. Muhammed has a Bachelor of Science and earns a monthly salary of about $800 US dollars as a teacher at a local school.

His wife, who has a BA in Arabic Language and Literature earns nearly the same amount, teaching Arabic at one of the largest and most prestigious high schools in suburban Ramallah.

Like many other Palestinian families, the Sawabhas are ill-prepared to receive the Muslim holy month of Ramadan during which family spending increases substantially.

“We always struggled to make ends meet. But this is the first time we feel we are fighting on many fronts and losing,” said Muhammed.

The family, which doesn’t own a home, pays an annual rent amounting to $3000. And with ever increasing college tuition, school expenses and disappearing government subsidies, only a meager amount of money is left for a decent living.

His wife concurred. “We are really frustrated; we only received half of our salaries this month. It is now the end of the month, and we are yet to receive the other half. Ramadan is coming and the government keeps telling us to be patient, but for how long?”

Muhammed explains that with Ramadan “knocking on the door,” and with the new college season only a few weeks away, and with three schools kids ready to go to school in mid September, he simply doesn’t know how he could meet the staggering financial obligations.

“I don’t know what do. But Allah befrejha, God will help us overcome the problem,” says the 48-year-old teacher, his eyes looking heavenward.

According to PA officials, the current financial crisis hitting the occupied territories is probably the severest in living memory, certainly since the establishment of the Palestinian Authority (PA), following the conclusion of the Oslo Accords between Israel and the PLO in 1993.

The crisis stems from direct and indirect causes. The direct causes includes the failure of mainly Arab donors to honor their pledges to a cash strapped PA living on a tight budget, the lion’s share of which goes to paying salaries to as many as 160,000 civil servants and public employees.

Last week, PA Chairman Mahmoud Abbas implored Arab states to “save us from going down.”

He explained that the current crisis was real; saying his government in Ramallah had been unable to pay salaries and meet urgent financial obligations.

Some Arab states have been dawdling in paying their pledged financial assistance to the PA, complaining about the spread of corruption and financial mismanagement with the self-rule authority.

Others, like Kuwait, are fed up with the chronic PA inability or failure to wean itself off dependence on foreign assistance.

Another key factor contributing to recurrent financial problems besetting the PA stems from the unnecessarily bloated security establishment which devours a huge chunk of the Palestinian budget.

The PA has as many as 80,000 security personnel on its payroll. The bloated force, built on instructions from the western donor countries, particularly the United States, consumes as much as $50 million per month.

The various Palestinian security agencies do very little work besides controlling and pacifying the Palestinian populace, including preventing any form of proactive resistance against the Israeli occupation.

Some security experts have opined that for the purposes of keeping law and order, the Palestinian community in the West Bank needs no more than a moderate civilian security force totaling 10,000-20,000 police officers.

However, the PA thinks that the huge security force is necessary to protect its own survival, especially in the face of a possible revolution and also to prevent the recurrence of what happened in the Gaza Strip in 2007 when the Islamic Liberation Movement, Hamas, wrested control over the coastal enclave, from Fatah militias which tried, with vigorous US assistance, to overthrow the democratically-elected government of Hamas.

A few years ago, the PA forced thousands of pro-Arafat activists within the security agencies into early retirement, fearing a possible revolt against the policies of Mahmoud Abbas and his pro-western government, headed by Salam Fayyad, who is largely viewed as unpatriotic or not patriotic enough.

However, to appease and pacify these people, many of them still in their mid 30s and early 40s, the Fayyad government paid them hefty retirement salaries reaching in some cases $4,000 dollars per month. The amount is considered a dream retirement for even the highest-ranking university professors who receive comparatively modest pension salaries.

Then there is the ghoul of corruption corroding through the PA financial structure whose tide successive Palestinian governments failed to stem. It is widely believed that hundreds of millions of dollars are lost to corruption every year.

Some observers believe that the PA is so-much infested with corruption that stemming its tide can’t be achieved without a comprehensive surgical intervention that would upset and alienate large segments of the PA hierarchy.

One Palestinian economist opined recently that “corruption within the PA financial system is structural, not rudimentary. I am afraid we can’t eliminate corruption without eliminating the overall structure of the PA.”

True, the corruption readings are not as high as they were five or six years ago, when embezzlement, nepotism, favoritism, bribery were the norm, rather than the exception.

Moreover, the PA government has shown a determination and a willingness to fight corruption, especially its stark and brazen forms. For example, a special ad hoc court has been established to prosecute corrupt officials.

The court head, Rafik Natshe, a veteran Fatah leader and former Speaker of the Legislative Council, recently ordered two cabinet ministers to appear before a special panel of judges for questioning in connection with allegations of financial mismanagement.

However, there are those, and they are many, who think that PA efforts are “too little and too late” and that the PA needs to declare fighting corruption a real national priority.

Some of the fundamental problems exacerbating recurrent financial problems hitting the PA lie in the fact that the PA is not a sovereign state or even a semi state given the fact that Israel continues to control Palestinian border crossings, financial resources, taxes and all other components of a healthy economic process.

In recent months, especially since the PA leadership announced plans to seek UN recognition of a putative Palestinian state, Israel suspended the transfer of customs and tax revenue payments to the Palestinian government in Ramallah. The financial strangulation was only relaxed after the PA pressed the Obama administration and EU states to pressure Israel to reconsider the draconian measure, resorted to every time the PA refuses to be at Israel’s beck and call.

Finally, it has always been a fantasy to build a prosperous economy with a sound financial system under a foreign military occupation. This is what many Palestinian and non-Palestinian intellectuals had warned about. This is why the current financial predicament facing the PA is the price the PA and the rest of the Palestinian people are paying, for venturing to placing the cart before the horse by trying to build a state before liberation from one of history’s most criminal and evil military occupations.

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