Economic dependence on Israel impedes Intifada

Published December 4th, 2000 - 02:00 GMT

Israel’s suspension of the transfer of Palestinian National Authority allocations, which total on average 200 million shekels a month, represent a blatant violation of the economic agreement signed between the two sides, said Dr. Muhammad Ishtayah, director general of the Palestinian Economic Council for Development and Reconstruction (PECDAR) in an interview with Al-Hayah al-Jadidah


Ishtayah explained that the missing fund comes directly from the PNA’s general budget, meaning that there is not enough funding to cover ordinary obligations, including the salaries of employees. The PNA is the largest employer in the West Bank and Gaza. 


The money owed by the Israeli side is not a grant or a kind gesture, Ishtayah stressed. It involves Palestinian money that Israel collects on behalf of the Palestinian Authority at the crossings and the borders from taxes, value-added taxes and custom duties. The Palestinians were not able to do so because they because they have no sovereignty at these locations. 


Ishtayah noted that that the EU pledged in 1996 that it would cover Palestinian losses in the event that Israel ever abstains from transferring them. Thus far, he said, the Europeans had offered 27 million euros to support the PA's budget, and Saudi Arabia has donated $30 million to pay salaries.  


In a similar vein, Ishtayah called on the Israelis not to stop supplying Palestinian areas with oil products, gas and other strategic commodities like cement. If this happened, he said the remaining 25 percent of the economic activities that thus far have survived will be eliminated. 


The frailty of the Palestinian economy and its dependence on Israel is the Achilles heel of the Intifada, Ishtayah stated. Consequently, he stated, the Palestinians should learn from the experience, and rethink economic relationship with Israel. Arab crossings should be used for import and export operations, and not the Israeli port north of Ashdod. Furthermore, a cement plant must be established in the Palestinian territories.  


Addressing the Arab financial and economic assistance that was promised at October’s Cairo summit, Ishtayah expressed his doubt that the $1 billion pledged to the Palestinians would ever be collected. Realistically, he stated, half the amount was more likely. 


But, he said, the Palestinians require the Arab money urgently. It makes no sense that discussion be held about how to distribute the funding, when the Palestinians already have in place mechanisms for handling and monitoring contributions from donor countries. — (Albawaba-MEBG)

© 2000 Mena Report (

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