Publication
Omar Shaban Ismail · PalThink for Strategic Studies · 2014
Omar Shaban challenges Minister Shawqi al-Issa’s claim that 55% of the Palestinian Authority budget goes to Gaza, arguing that it is an old, unsupported figure that the Ministry of Finance has never substantiated despite repeated demands. He contends that linking delayed West Bank salaries to emergency spending for Gaza deepens division and unfairly makes Gaza carry the blame for the PA’s chronic fiscal crisis and accumulated deficit. He also argues that Gaza has long supported the budget through clearance revenues and earmarked Arab and international aid, citing the March 2009 Sharm el-Sheikh reconstruction plan, of which only 40% was allocated to Gaza, and a Saudi donation of half a billion riyals. He calls for full disclosure of Gaza-related revenues and expenditures and for a transparent list of all cash and in-kind aid, spending items, and disbursement mechanisms to rebuild trust and unity.
Omar Shaban, August 2014: The 55% Gaza budget claim is unproven, and Gaza should not be blamed for the PA’s fiscal crisis.
In his interview with Ma’an TV two days ago, Minister Shawqi Al-Issa, Minister of Social Affairs in the National Consensus Government and head of the central government emergency room, repeated the claim that 55% of the Palestinian Authority’s budget is allocated to Gaza, adding that the Palestinian Authority will postpone payment of the July salary to employees in the West Bank in order to support our people in the Gaza Strip.
Dear Minister, I was pleased to speak with you two days ago, and I appreciate your efforts to serve your people in the Gaza Strip, but I hope you will bear with the following remarks:
· You are repeating an old claim that has been repeated dozens of times since the damned split in June 2007, and it is a claim that is absolutely incorrect. It has never been supported by any evidence, despite numerous demands for this. I think you may have been hasty in repeating this claim, especially under these tragic circumstances that the Gaza Strip is experiencing and that require much solidarity and altruism. This percentage, which is absolutely incorrect, is supposed to change over time, as is the case with financial and economic indicators, taking into account the increase in population in Gaza and the West Bank, the conditions of the blockade on Gaza, which saw noticeable easing after the Freedom Flotilla incident at the end of May 2010, and the decline in tunnel trade with Egypt, which doubled the Gaza Strip’s purchases from Israel and raised the Gaza Strip’s contribution to the clearance tax revenues that Israel transfers monthly to the Palestinian Authority.
· Your statement that payment of the salaries of employees in the northern governorates for the month of July will be postponed because of the transfer of emergency allocations to the Gaza Strip may give a signal of lack of solidarity and deepen the impression, which some have tried to create since the years of the split, that the Gaza Strip represents a burden on the Palestinian national project politically and financially. It is not acceptable, especially at this time, to make the Gaza Strip bear the burden of the Palestinian Authority’s chronic financial crisis and the consequences of the Ministry of Finance’s failure to manage public money and cash flows, which are skills that any financial accountant should master. The financial crisis is not new, so why was it not confronted fundamentally, and why did the Palestinian Authority continue to create thousands of new jobs? And why did it not actually practice the austerity policy it announced dozens of times? We have the right to ask what measures the Minister of Finance has taken to address the Authority’s accumulated deficit over the years. More importantly, the Authority’s inability to pay its employees’ salaries, which is the minimum of its duties, raises major doubts about the justifications for its existence and its ability to lead the national project.
· This claim carries so much ambiguity that it completely loses its credibility, as the Ministry of Finance has never published it despite our repeated demands dozens of times. According to the legal principle, “the burden of proof is on the claimant”! I had expected that, having assumed your post only a few weeks ago, you would ask the Ministry of Finance for proof of this claim, with clarification of the following: What are the detailed expenditure items allocated to the Gaza Strip? What are the revenue items and their volume that the Authority realizes from the Gaza Strip’s purchases, especially in petroleum, cars, and dozens of other goods? Is this percentage from the total general budget, which includes salaries, development projects, those allocated to Palestinian embassies, the secretaries of the factions, members of the Revolutionary Council, and other items? The Palestinian Authority budget statement published on the Ministry of Finance website does not include any of these details, and they have never been published previously.
· The Gaza Strip was and remains a source of support for the Palestinian budget. Many Arab and international donations that were earmarked for the Gaza Strip were entered into the Ministry of Finance account. All international support projects designated for Gaza are managed by the Gaza Projects Management Unit established within the Ministry of Finance. One example is what happened at the Sharm el-Sheikh conference, which was held on 2 March 2009 following the first war on the Gaza Strip, where former Prime Minister Dr. Salam Fayyad presented his plan, “Reconstruction of the Gaza Strip,” of which only 40% was allocated to the Gaza Strip and the rest to support the budget. Another example is the support allocations decided by many Arab and Western countries during the days of the Israeli aggression against the Gaza Strip, foremost among them the Kingdom of Saudi Arabia, which donated half a billion riyals, according to what President Mahmoud Abbas said, in addition to multiple forms of assistance in the field of health and humanitarian services, which will be injected entirely into the Authority’s accounts. We realize that this assistance will help the Palestinian Authority support its sons in the Gaza Strip and also overcome its financial crisis.
· In your capacity as head of the central emergency committee, I call on you to prepare a detailed list including all cash and in-kind donations and aid allocated to the Gaza Strip, as well as the expenditure items, the mechanism for expenditure, and the bodies authorized to do so. This is in order to enhance transparency and trust and restore emotional unity before political unity between our people in the northern and southern governorates, and with the Palestinian Authority and its people. I stress that the Palestinian people in the southern governorates and the northern governorates are united and of one heart, despite the poisonous attempts by those whose time has expired to spread hatred and racism among them.
Topic: Palestinian Economy — Palestinian Authority Budget · Gaza Politics · Public Expenditure · Fiscal Transparency — Original source