Palestinian Authority President Mahmoud Abbas. (Thomas Coex/AFP/Getty Images)

Palestinian President Fires Advisers as Financial Crisis Hits

Analysts: Move aimed at appeasing the Palestinian street

[RAMALLAH] Palestinian Authority President Mahmoud Abbas made two important decisions in one day that will have a direct impact on the political and financial future of both the PA and the Palestinian people.

The first move by Abbas was to terminate all of his advisers amid a financial crisis that has forced his government to make deep salary cuts.
Nasser Tahbub, a former PA official, told The Media Line that Abbas didn’t have a choice but to let his aides go. “The Palestinian street view toward the presidency is not positive,” he said.

“The decision is excellent but is superficial and not geared toward deep reform. The president began to realize that his group of advisers did not give him sufficient and positive communication channels with his people.”

In a second move, Abbas ordered former prime minister Rami Hamdallah and other cabinet ministers to return their salaries and bonuses.
Documents leaked earlier this year showed that the pay of cabinet ministers had risen from $3,000 a month to $5,000 — a 67 percent increase — and that the prime minister’s salary rose to $6,000 a month.

In addition, a $10,000 housing bonus was given to ministers living outside Ramallah, where the PA is headquartered. The same bonus, the documents showed, was also given to ministers with homes in Ramallah.

Abbas had secretly approved the raises, overriding a 2004 law that set ministerial salaries. The raises were applied retroactively to 2014, when the cabinet took office, resulting in bonuses totaling tens of thousands of dollars.

The revelations infuriated many in the West Bank, where the cash-strapped PA has been forced to slash the salaries of government employees.
Hamdallah defended the money he and cabinet ministers received, saying Abbas had approved the raises after taking into account the rise in the cost of living. But sources in Ramallah confirmed to The Media Line that the decision to dismiss Abbas’s advisers doesn’t apply to all. At least names The Media Line was told will stay on, among them Ali Muhanna, his Legal Counsellor, Majdi Al-Khalidi, the Diplomatic Counsellor, Mohammed Mustafa, Ismail Jabr and his religious affairs adviser Mahmoud Al-Habbash.

Jihad Harb, a Palestinian political analyst with the Palestinian Center for Policy and Survey Research, told The Media Line that Abbas felt betrayed by the former government after receiving a report in June on payments to ministers and officials.

“The president felt frustrated by the previous government, as well as by some of his advisers, for not alerting him not to sign the decision to increase pensions and the resulting popular reaction.”

Harb says Abbas was faced with a difficult situation. “The president is entering a new political phase and needs to deepen his relationship with the current government which is supposed to support him and help him implement his agenda. The PA wants to be seen as doing its part and not overspending or wasting money. He needs to have an austerity policy.”

The PA’s financial woes began last February when Israel began deducting about $10 million a month in tax transfers that it collects on its behalf.
Israel collects some $190 million a month in taxes imposed on goods headed for Palestinian markets that arrive in Israeli ports and are then shipped to the Palestinian territories.

The amount it deducted — $138 million in 2018 – is equal to what Israel says the PA paid Palestinian prisoners in Israeli jails, or their families, last year.
Tahbub said the moves by Abbas are “intended to appease the Palestinian street.” He said Abbas’s decisions are more symbolic than anything else and are “aimed to ease anger and growing public criticism of his authority.

“Many Palestinians have lost faith in PA officials. The Palestinian public feels that the institution of the presidency is weak, which has created a charged and tense atmosphere towards the office of the presidency.”

Tahbub said for Abbas to regain the trust of Palestinians, he needs to “do more than just sack his advisers, many of whom have other high-ranking positions within the PA or the Palestine Liberation Organization.

“The president must immediately form a socio-economic council representing all segments of Palestinian society and include elected groups, members of the government and academics so that decisions become relevant to the Palestinian people and represent their interests.”

The PA has already halved the salaries of most of its tens of thousands of employees to keep the government running.

Another cause of the financial squeeze is that the United States has cut hundreds of millions of dollars in aid to Palestinians. President Donald Trump’s administration has slashed funds to humanitarian organizations, including $360 million the U.S. used to give to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), in an effort to pressure the Palestinians to re-enter peace talks with Israel.

Despite recent reports that the PA is struggling to keep order in areas under its control in the West Bank, Tahbub said the PA has a strong grip on power.
“I don’t think there is yet a state of security chaos. Law and order exists even in areas not under full PA control,” Tahbub said. “The fear is not of security chaos, the fear is of peoples’ indifference to the existence of the Palestinian Authority and its decisions, and the marginalization of the Authority. The fear is that people feel indifferent towards the PA.”

The PA has been under pressure to end its boycott of the Trump administration, which Abbas imposed after Trump moved the U.S. embassy from Tel Aviv to Jerusalem.
Harb said that Israel, the U.S. and some Arab states are working to marginalize the PA’s role. In addition, he said that decisions Abbas has made in the absence of a Palestinian legislative authority have eroded the “people’s trust in him.

“Over the past three years, the president has been under considerable external and internal pressure. There is U.S.-Israeli-Arab pressure on him. But the danger is of internal pressure.”

Harb said Abbas “must listen to the people’s demands. They are calling for the restoration of unity between the West Bank and Gaza and an end to the political divisions between the two largest Palestinian factions. They want a cessation of the sanctions imposed by the president on the Gaza Strip, for him to combat rampant corruption, and stop undermining public freedoms.”

Harb has a pessimistic view of Abbas’s ability to meet those demands. “I think the Palestinian Authority has been put in a corner and doesn’t have many choices. Perhaps the only option is to dissolve the Palestinian Authority and end its agreements with Israel.

“There is a large portion of the Palestinian population which sees the Palestinian Authority as a burden on them, see it as being used and exploited by Israel, and who believe the PA will not bring about an end to the occupation.”

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