Palestinian Authority Finance: Fighting Bankruptcy with Wasteful Expenditure

From the car procession of Palestinian President Mahmoud Abbas (AFP)

The severe financial crisis and the accumulated debt suffered by the Palestinian budget did not prevent the Palestinian Authority from continuing to buy new cars and making promotions and appointments, which angered official and civilian monitoring bodies, especially in light of of the increasing obligations whose failure to meet them threatens to stop vital services for citizens.

The Office of Financial and Administrative Supervision of the Palestinian Authority has revealed financial and administrative abuses that have affected most ministries and government and semi-governmental bodies.

At the time, the civilian team to support public budget transparency of the “Aman” coalition for integrity and transparency estimated the government’s total financial commitments at about 30 billion Israeli shekels ($ 9.67 billion), including 12 billion shekels in public debt, and 18 billion in arrears to the private sector and the pension fund.

The Financial and Administrative Supervision Bureau of the Palestinian Authority reveals financial and administrative abuses affecting most ministries and governmental and semi-governmental bodies

Despite criticism of the supervisory reports for what they describe as the financial and administrative abuse of the government, the latest issue of the official “Al-Waqa’i” newspaper, released on October 27, showed that President Mahmoud Abbas has issued a decision to promote 32 civil servants to senior positions, meaning additional funds will be allocated to The public budget burden burdened with deficits, according to observers.

The Palestinian Authority has been suffering from successive financial crises for years, but this has recently come to the fore, after the Israeli occupation authorities threatened to cut off electricity to several cities in the West Bank due to the Authority’s failure to pay its debts. millions have been estimated. of shekels to the Israeli company that supplied the electricity, and also announced by The Syndicate of Gas Station Owners in the West Bank that it would stop supplying fuel for public and security service cars due to the accumulation of large sums of money on the government.

The Palestinian economy has already been depleted due to the financial crises that the year 2019 saw, especially the withholding of cleaning funds from the occupation government, and a significant decrease in external support, as the local revenue raised by the Palestinian government is only about 25 make out. % of total revenue, while the percentage of grants and grants reached Externally, whether subsidized by governments or international institutions, is about 25% of revenue.

The PA’s treasury revenue has fallen by 90% over the past 5 years, due to the occupation’s settlement of a large part of the cleaning funds

As for the remaining 50%, it comes from cleaning up revenue that the Israeli occupation government collects and transfers in exchange for Palestinian import taxes through Israeli ports and crossings. This composition varies from time to time, depending on the clearance of transfers, foreign grants and the government’s ability to collect local taxes.

The revenue of the government’s treasury has decreased by 90% over the past 5 years, due to the occupation’s deduction of a large part of the cleaning funds, the decrease in internal tax collection and which resulted from the Corona pandemic, but the most prominent reason behind the crisis is the virtually complete cessation of Arab and American support, since the arrival of former US President Donald Trump to the White House in 2017.

The clearance is the Palestinian tax revenue collected by the Israeli government on behalf of the Government, on the latter’s imports from abroad, with a monthly average of about $ 188 million, and Israel deducts a 3% commission for that.

This was reflected in the Palestinian Authority’s ability to finance its expenditures, as it took advantage of loans from local banks, which led to an increase in its debt to banks to almost two billion dollars, and to the pension fund with about $ 3 billion, and the private sector’s arrears amounted to nearly half a billion dollars.

Sources reveal to Al-Araby Al-Jadeed that more than 500 state cars were purchased this year, including about 150 cars last September alone.

The government has more than once announced its intention to pursue austerity policies and procedures or improve tax collection to address the financial crisis, but these efforts or efforts have, for various reasons, including failure, not real results to a sustained reduction of the budget deficit. fundamentally reduce spending due to the weak will of senior officials’ commitment In responsibility centers or the weak impact of the weight of these expenditures on the current expenditure structure, according to well-informed sources who requested anonymity.

The sources revealed to Al-Araby Al-Jadeed that more than 500 state cars were purchased this year, including about 150 cars last September alone. About 2,500 new employees were hired in 2021, the contract employees hired were not included, and there are 890 promotions to various levels of government.

Al-Araby Al-Jadeed tried to get a comment from Palestinian Authority spokesman Ibrahim Melhem on this information, but he did not respond for days. At the same time, civil society organizations interested in monitoring the performance of the government indicate that they are suffering from a serious lack of information provided by the competent government authorities regarding the procedures they take, such as recruitment, promotions, purchases, etc. does not enable them to determine whether these steps are urgent in the light of the crisis.

The head of the National Team for Budget Transparency Support, Lamis Farraj, told Al-Araby Al-Jadeed that “there is a serious weakness in the government’s policy on achieving transparency in the management of public money, and following the participatory approach in setting priorities. in spending and enhancing the reality of income, which, if available, will be able to determine spending priorities. And let’s decide whether, in the midst of the financial crisis, for example, we should buy cars? Whether employees should promote or hire others. , for example.”

About 2,500 new employees were hired in 2021, the contract workers hired were not included, and there are 890 promotions to various levels of government

Farraj gives an example by saying: “When we tried to find out the details of the current budget by looking at the budgets of the ministries, we did not reach the reality of the detailed numbers due to the ministries’ lack of commitment to publish their budgets on their websites, which raises doubts about the existence of a comprehensive policy that deliberately hides information, does not present and publish it to the citizen, Note that the citizen’s budget published on the Ministry of Finance’s website, while the detailed budget was not published.

And she adds that, “in light of the crisis, it is accepted that spending rationalizes, controls and directs spending so that it does not affect the path of social justice. Promotions are part of the employee’s claim, and an acquired right, according to the Public Service Act, but we do not know if recent promotions are payable or not? Is it because old cars are no longer usable? We do not have an answer because it is not transparent but we say that the expenses are related to the availability of assets and income. “

Farraj calls for the publication and provision of access to information, “so that we are able to analyze and evaluate priorities. The current situation makes us unable to be held accountable and to give advice to rationalize and reduce spending. control.”

This comes at a time when the European Union has announced the resumption of support for the Palestinian Authority after stopping for many months.

Shadi Othman, head of the European Union’s Media and Communications Office in Jerusalem, told Al-Araby Al-Jadeed: “The trade union will spend part of the financial aid to the Palestinian Authority in the coming period to help it. to alleviate his suffocation. financial crisis, and fulfill part of his obligations regarding the salary bill. civil servants, without specifying their value, ”while Othman emphasizes that the real way out is to fully reinvest the cleaning funds without losing any part of it. to subtract.

Othman points out that the aid, which is estimated at about 200 million euros a year, has been suspended since the beginning of this year, for reasons related to the union itself, and this suspension included many regions and was not limited to Palestine not.

Officials of the European Union’s Information and Communication Office in Jerusalem: Refugees’ appointments and promotions despite the financial crisis’s a debt purchase

The author and political analyst Khalil Shaheen believes that what has been mentioned in the reports of the Review Bureau, “Aman” and others, clearly indicates a mismanagement of financial, economic and social affairs, all of which are linked, “so it is requires thinking about future options, because it will bring about a change of a nature. ” It is radical in the functions, tasks and budgets of the government, but we see no introductions into the internal situation that indicate that we are on the verge of a strategic shift. ”
Shaheen explains this by saying to Al-Araby Al-Jadeed: “The daily exercise of power, whether political or economic, confirms that none of this will happen and will not happen, so the economic crisis is exacerbated.” Personally at the expense of the public benefit.
Shaheen added, “It has become a tangible and common thing at the higher levels, and part of the appointments and promotions despite the financial crisis may be to attract more supporters to the ranks of the influential and expand the base that promises fidelity to the government, or personalities in it, supports the survival of the present situation as it is, and benefits from it in any future political struggle, whether over the leadership of the government or its advanced positions.

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