Articles and Studies

PA Financial Crisis: Gaza is not the problem and full transparency is needed!!

By Omar Shaban

The Palestinian Authority (PA) is suffering a stifling financial crisis represented in delaying paying the salaries of PA’s employees. Many officials accused Gaza to be the reason for the crises as if they wanted to suggest unilateral separation from the Gaza Strip in order to exit from the crises. The last one who spoke about the crises while he should be the first to talk about is the minister of finance himself. Dr  Nabil Qeses who announced at the website that “ the ministry of finance will delay the payment of the PA salaries due to the financial crisis and austerity state announced.     Not only does the crisis threaten the life of 170,000 employees and their families, but also it affects the structure of the Palestinian society and the stability of PA itself . No doubt it is an impossible mission for the minister of finance to get out from this crisis as PA has been suffering from it  for many years . Unlike the American movie ” mission impossible”, this crisis is realistic, serious and critical.  These are some points and question need to be addressed by minister of finance of the PA ; :

– The website of the ministry of finance has very little  information about the financial situation of the PA . It contains old reports that cover periods until 2009. So the website needs to be developed to include updated information and sufficient details about the financial status and any  other developments.

– The news about the crisis which was been published on the website of the ministry of finance carried a great contradiction between two elements 1) not paying the salaries and 2) announcing the state of austerity. Actually it should have been said that “ the ministry of Finance announces state of austerity in order to pay the salaries. If the state of austerity starts with not paying the salaries, I wonder with whom it will end !!  I suggest, to the Minister of finance, to break this silence and talk about the financial status of the PA  frankly, with full transparency and enough details to answer the following questions:

1. PA Employees:

– How many are the PA’s employees up to day ? How much is the overall salaries, incentive, allowances and remunerations?

– How many consultancy  contracts does  PA have ? Does PA really need them where   the allowances of each contract reach up US$ 10,000 a month ? Is there a plan  to stop these consultancy contracts within this state of austerity? The budget law of 2012 asserted that the consultancy  contracts’ salaries will be reduced up to 30%.

2. PA and the Gaza strip:

– How many of the PA employees are from the Gaza strip who still receive their salaries? How much are the overall salaries and its percentage from  the total budget of the PA !! How many employees from the Gaza strip were recruited in the last five years and how many of the Gaza based employees  were fired? Previous reports for the ministry of finance state that the number of Gaza employees has been reduced since 2007 and  no single employee was assigned from the Gaza strip since then !.

– What are other financial responsibilities of PA towards the Gaza strip ? The general budget law of 2012 states that Gaza strip consumes up to 45% of the  recurrent budget but not from the general budget . My assessment this not accurate where Gaza does not  consume  more than % 18 of the general budget . This issue needs to be clarified in details to limit the culture of hatred and incitement practiced by some people and authorities.

3. General Debts of the PA :

– How much are the debts of PA to the following bodies :

– The Palestinian banks

– The private sector; contractors, companies supplying medicine,… etc.

– International  banks.

– Other debts

– The rate of interest on these debts/ loans.

– Is it true that the PA borrowed up to one billion US dollars from the pension fund? My information say that the amount borrowed exceeded this amount , it reaches up to 2 Billion $ US, so what are the possible scenarios to get this money back in case of dismantling PA. It’s worth noting that PA doesn’t have the right to borrow from the pension fund without the consent of the savers and retired people.

4. Donor countries:

Sharm Elsheikh Donors Conference was held in 2nd of March 2009 to reconstruct Gaza strip. In this conference donors specified 5.2 billion dollars for reconstruction. The figure was beyond the expectations of PA as asked for 1.4 billion dollars (40%) to reconstruct Gaza strip, while PA asked another 1.8 US Billions to support the general budget . my question is how much of these pledges were executed and on which items !! As most of the donors, except U.S.A, don’t link their support to the PA  with certain political conditions . How could the crisis be justified every month while the donors give their commitment at annual  bases ? According to some PA officials, the crisis caused  by the lack of commitment  of the donors from paying what they promised? What are these countries? Why they didn’t comply with their promises? Are there political restrictions stand behind these positions?

5. PA resources:

– As  the state budget of 2012, taxes reconciliation with Israel provides 66%  of the PA overall revenues (1.5 billion US dollars) in addition to other revenues which is another one billion US dollars are  enough to pay 2/3 of the employees’ salaries without the international aid.

– How many of PA embassies and representatives are there around the world !!! Do we really need  them !!  Having in mind the poor foreign diplomatic performance of PA? It will be useful to mention the number of ambassadors and the new employees who have been recurred  recently from Gaza strip and the mechanism of assigning.

6. Palestine Investment Fund (PIF):

– The Palestinian invest fund, PFI  participated earlier in helping PA to in solving financial problems in 2005 and 2006. Why this fund doesn’t lend PA in this crisis instead of inflating the wealth of some people and monopolistic companies who highly benefit from PIF.

At the end , the Palestinian people have the right to know the truth, the details and the scale  of the crisis whatever stiff it is.

10th of July 2012


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