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Omar Shaban Ismail · Sama News Agency · 2021
On the eve of the meeting of the donors' Ad Hoc Liaison Committee (AHLC) in Oslo on 17 November — a 15-member body chaired by Norway and the only forum bringing Palestinians and Israelis together since peace negotiations stopped — Omar Shaban sets out the causes of the PA's deep financial crisis: international aid down 85% over 13 years according to the World Bank, from $1.2 billion in 2008 to an expected $184 million this year; the impact of COVID-19 on revenues; Western cuts over human rights and the failure to hold elections; and weak Arab support. He notes Israeli deductions of more than 200 million shekels a month from the roughly 750 million it collects. He urges the PA to adopt real austerity, internal reconciliation, anti-corruption measures and an end to monopoly contracts, since dependence on donors exposes it to political blackmail.
Omar Shaban, November 2021: an 85% fall in aid deepens the PA’s financial crisis; austerity, reconciliation and anti-corruption are the answer.
The Ad Hoc Liaison Committee for donor countries to the Palestinian Authority (AHLC) will meet tomorrow, Wednesday, November 17, in the Norwegian capital, Oslo. The committee consists of 15 members, including: the United States of America, the European Union, the United Nations, the International Monetary Fund, the World Bank, Russia, Japan, Saudi Arabia, Canada, Jordan, Egypt, Tunisia, Norway, Israel, and Palestine. Norway chairs this committee, which holds its meetings twice a year, in Brussels and in New York in September. The second meeting was postponed from September to November and was also moved from New York to Oslo.
The AHLC is the only forum that brings Palestinians and Israelis together after the suspension of peace negotiations. Some Arab countries that do not have official relations with Israel also participate in it. The meeting mainly discusses the deep financial crisis suffered by the Palestinian Authority, which is the deepest crisis in years, as described by Palestinian Prime Minister Dr. Mohammad Shtayyeh and the Minister of Finance. According to many observers, the causes of the deep financial crisis are due to: 1) a very sharp decline in international funding to the Authority. According to the World Bank report that will be presented at the donors’ meeting tomorrow, these donations have declined by 85% over the past 13 years. It is noted that the international community’s contribution in 2008 reached $1.2 billion to the Palestinian Authority, the highest level ever, and this year donor funds are expected to reach only $184 million. 2) The coronavirus crisis had a major negative impact in reducing public revenues, most importantly clearance revenues with Israel and local taxes. This decline was accompanied by a significant increase in government spending due to rising unemployment and poverty rates in the Palestinian governorates. 3) Some Western countries reduced their support to the Authority because of the human rights situation and the failure to implement Palestinian elections, and as pressure to push toward internal reconciliation. The crisis is also due to weak support provided by some Arab countries because of political positions. Some Western countries reduced their financial contributions because of internal crises such as the coronavirus crisis, the influx of millions of migrants to them, and the recession that occurred in the global economy because of the coronavirus crisis.
Numerous statements have been issued by officials in the Palestinian Authority that the Authority’s financial deficit will not enable it to pay the salaries of its civilian employees at the end of this year, and that this crisis may continue for the next six months until March 2022. Likewise, the adviser to the Palestinian Prime Minister for planning and aid coordination, Istifan Salameh, justified this crisis by Israeli policies against the Authority, saying: Israel has aggravated the financial crisis of the Palestinian Authority treasury through deductions from Palestinian tax funds, which have now exceeded 200 million shekels per month. Salameh explained that the tax funds collected by Israel on behalf of the Palestinian Authority amount to about 750 million shekels per month, in return for a 3% commission for collecting these funds. He added that Israel deducts new sums monthly, whether for water, sanitation, electricity, or health services.
Many news sources have mentioned that Israel will ask the donor countries meeting tomorrow to continue supporting the Palestinian Authority. The Israeli newspaper The Jerusalem Post also reported that Israeli Minister of Regional Cooperation Issawi Frej of the Meretz party, who will participate in the meeting, will ask donor countries to restore payments and invest particularly in projects related to water and health. “Frej” will meet in Oslo with Palestinian Authority Prime Minister Mohammad Shtayyeh, and this will be the first face-to-face talks between the two, according to the same newspaper.
Although the collapse and weakening of the Authority is not in the interest of the region or the international community, the Palestinian Authority must implement a real austerity policy that reduces unnecessary expenditures and expenses and move toward internal reconciliation in a way that supports the local economy and reduces points of internal tension that already drain many limited resources. It must also implement a real and serious policy to combat corruption and the administrative and financial bloat that wastes resources. It must also work to stop the monopolistic contracts signed by the Authority, under which it has been deprived of control over sovereign economic sectors.
Dependence on donor countries exposes the Authority and the political project to political blackmail from Western and Arab parties.
Topic: Palestinian Economy — AHLC · donor aid · PA fiscal crisis · clearance revenues — Text © Sama News Agency — archived here with attribution to the source. — Original source