Economic crunch hitting Palestinians hard

Lack of opportunities, rampant corruption, and the reality of occupation are putting the backs of all Palestinians to the wall, writes Khaled Amayreh in Hebron in the West Bank

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The Palestinian Authority (PA) has managed to survive several crises of public confidence, including the recent revelations by Al-Jazeera TV that showed PA negotiators and officials willing to give Israel far-reaching concessions pertaining to fundamental final status issues, such as Jerusalem and the right of return for Palestinian refugees.

However, like the many other Arab and Third World regimes, the PA could face a greater peril in the form of widespread unrest stemming from harsh economic conditions, increased poverty as well as rising unemployment.

PA officials readily agree that public indignation at worsening economic conditions is legitimate. However, they argue that there is little they can do to rectify the situation, given the fact that the PA itself is lacking sovereignty and has a very limited capacity to formulate independent economic policies.

Mohamed Abdel-Aziz is a newly retired bank clerk from the Hebron region. He receives a monthly salary of about 2,200 Israeli shekels (about $600). However, with a soaring cost of living, and with two daughters and one son in college, the 60-year-old retiree can hardly make ends meet. "We are not literally starving, but we don't make much of a living beyond that," says Abdel-Aziz.

To augment his income, the former bank clerk applied for the job of janitor at a local school but was told he was too old for the job. Now he wants to find another job, any job, to help his family survive the harsh economic hardships hitting the West Bank.

"Imagine trying to find a job at 60; it is really a hard task, especially when there are thousands of job-seeking young men and women."

Abdel-Aziz is not a special case. Tens of thousands of Palestinian households are experiencing unprecedentedly harsh economic conditions that are eroding the already hard-hit middle class, forcing many people below the poverty line.

This situation is further exacerbated by rising unemployment, constantly rising costs of living and disappearing government subsidies of basic consumer products such as flour, sugar and cooking oil.

According to the independent Palestinian National Bureau of Statistics, there were slightly over a million registered and unregistered workers in the West Bank and Gaza Strip in the first quarter of 2010. The unemployment rate was put at 23.4 per cent, or 234,000 workers, of whom 116,000 lived in the West Bank and a similar number, 118,000, in the Gaza Strip.

However, in reality the joblessness rate is likely to be significantly higher since many of the statistically employed workers are actually seasonal workers who don't have permanent jobs. More to the point, there are nearly 80,000 Palestinian workers working in Israel and Jewish settlements beyond the Green Line, the former armistice line between Israel and the West Bank. The jobs held by these Palestinians are precarious at best, subject to Israeli security whims.

The Palestinian Authority (PA) had sought to limit the number of Palestinian laborers working in the settlements, arguing that seeking work in these locales is unpatriotic, anti-nationalistic and borders on treason. It also contradicts the anti-settlement policy of the Palestinian government, which views the expansion of these colonies as an existential threat to the prospects of establishing a viable Palestinian state in the occupied territories.

According to Ghassan Khatib, a former minister of labour, the PA government has succeeded in reducing the number of Palestinian workers in the settlements from 25,000 a few years ago to about 9,000 now. "We don't really feel comfortable having to choose between seeing our labourers build settler units or having them stay home unemployed and succumbing to poverty. But we are working hard on this issue and we will not rest until we see zero Palestinian workers in the settlements."

Khatib added: "This is a complicated and multi- faceted problem, and it is illogical to expect the PA to find a magic solution for it. After all, we aren't an independent or sovereign authority and we can't do everything we would like to see done."

Khatib says the PA is trying hard to create jobs by attracting job-generating investment. A planned city, Rawabi, located not far from Ramallah, is expected to generate thousands of jobs, and could solve the problem of Palestinian workers working in Jewish settlements.

The Western-backed Salam Fayyad government has also decided to give civil servants a monthly salary hike of 15 per cent, which it hopes will enhance the "balance of payments" of many people. There are as many as 160,000 government employees in the West Bank and Gaza Strip, nearly half of them security personnel, who consume the bulk of the financial aid given to the PA by donor countries.

This aid comes with declared and undeclared political strings that restrict the PA's ability to operate freely in many respects, especially in matters related to national reconciliation with Hamas.

One of the main but least talked about factors contributing to the deterioration of poverty in the occupied Palestinian territories is the loss of hundreds of millions of dollars to corruption, including embezzlement, misappropriation of wealth, nepotism and favouritism.

Earlier this month, the PA asked Interpol to apprehend Mohamed Rashid, also known as Khaled Salam, for allegedly embezzling as much as $500 million in Palestine Liberation Organisation (PLO) funds. Rashid, the enigmatic financial advisor of former PLO leader Yasser Arafat, claims that the money was his and that he earned it in legitimate investment.

Critics say the Rashid affair is only the tip of iceberg of corruption within the PA, an entity where financial transparency is the exception rather than the norm.

Another factor exacerbating poverty has to do with takeover by the PA of zakat or charity committees, previously run by Islamist elements. The takeover, encouraged by the United States and Israel, effectively impoverished these committees as many religious donors locally and abroad stopped paying charity to the committees.

Still, the main and inherent factor inhibiting prosperity and causing poverty is the enduring Israeli occupation. This occupation, Khatib says, deprives Palestinians of the freedom to manage their own affairs. "And without freedom, you can't do anything correctly."