Palestinian Authority Prime Minister Muhammad Shtayyeh on Monday threw a tantrum: he told his weekly cabinet meeting in Ramallah (on Zoom): “The cause of the financial crisis that we have been facing for months is the money war waged by the American administration, and later Israel, and the discontinuation of Arab aid other than what Arab funds provide for projects, as well as the European Union, Asian countries and the World Bank, and these are mostly for projects and not for salaries.”
Amira Hass, who reports for Haaretz from inside the Palestinian Authority and is no great friend of the Israeli government (any Israeli government) noted a week ago that Ramallah’s halting of civil coordination between the Palestinian Authority and Israel didn’t cause Israel any harm at all, but brought PA Arabs to the brink of ruin.
The move, in retaliation for Israel’s decision to cut from the customs fees and taxes it collects on behalf of the PA the amount being paid to terrorists and their families, was designed to boost Ramallah’s image at home, but instead, as Hass put it: “it yet again exposes the PA as an entity that only reacts and doesn’t plan, one that demands sacrifices from the people without sharing its decisions with them and without any ability to defend them.”
Last May, the PA decided to boycott the entire monthly payment of tax and customs revenues collected by Israel because of the cut of salaries to terrorists. And so, since May, the PA must do with $200 less each month – or about two-thirds of its total revenue.
Having shot himself—and his fellow citizens—in the foot this way, PM Shtayyeh is still entirely incapable of drawing useful conclusions. “The United States was providing us about $500 million, and these funds stopped and the aid that came from the Arab countries, amounting to about $350 million, has stopped, except what the funds provide us, and the Arab countries have not abided by their decisions related to the financial safety net to protect Palestine from extortion,” Shtayyeh explained, like an entitled child who has no idea how to fend for himself without those donations.
There’s nothing in his dire message to indicate an understanding of why a new American president decided to cut off aid to the PA, and why Arab countries are not crazy about helping either. Shtayyeh lives in a world in which his government’s job is to sit with its coffers wide open and the world’s job is to pour in the wealth.
Shtayyeh wailed: “The Corona pandemic caused great damage to the world economy and to our economy, and our income decreased by 60%. Then came the issue of Israeli annexation based on the Deal of the Century when the Palestinian leadership decided to absolve itself from the agreements signed with Israel, including the financial agreement. Afterwards, all relations with Israel were stopped. We implemented an austerity program and expenditures were reduced by about 70%, but in order to enhance the public’s role and steadfastness and alleviate your suffering, we borrow about 400 million shekels ($115 million) from banks every month to pay only half the salaries, and we pay interest to the banks on this amount.”
It’s like the Palestinian Authority is being run by your college roommates, but with less beer and pizza.
And where do these borrowed $115 million go every month? The Prime Minister explained that 350,000 salaries are paid every month to military and civilian personnel; then there are payments to 120,000 needy families, including 81,000 families in the Gaza Strip; an additional amount goes to 140,000 employees in the PA and Gaza; more goes to 75,000 retired military and civilian personnel in the PA and Gaza, as well as the families of prisoners and martyrs at home and in the Diaspora.
And, naturally, there’s the interest on these loans.
Hass noted that before the coronavirus outbreak, the Palestinian Central Bureau of Statistics predicted that the PA’s GDP for 2020 would be $16.1 billion (compared to Israel’s $340 billion). This figure has been downgraded to $13.6 billion and may drop even further. The PA unemployment rate is more than 35% after about half a million in the PA and Gaza have lost their jobs or are deep in debt because of the coronavirus crisis.
The amazing thing is that at any moment, day or night, Shtayyeh and his pals can pick up the phone to Washington to accept President Trump’s deal, and son-in-law Jared Kushner would change their miserable economic reality like a particularly well-dressed genie. And they won’t do it.