by Avi Trengo, Economics Correspondent
Palestinian Prime Minister Salam Fayyad has been crowned as "the Palestinian Ben-Gurion at the recent Herzliya Conference. However, there is a great gap between the achievements attributed to him and his abilities in practice.
Fayyad is credited with changing the corrupt PA apparatus, but even in the financial realm where his expertise lies, his abilities are mostly manifested through the drafting of impressive documents as well as fundraising.
Meanwhile, the absurdity inherent in his statements regarding "Palestinian independence within two years" is clear to anyone familiar with the Palestinian economy. Fayyad is a former World Bank official, but even on the financial front his deeds are far from the image he has nurtured.
The Palestinian economy is the only place in the world where the per capita GDP is less than half the disposable income per capita. This is the result of three factors:
1. The Palestinians barely produce anything. Most of their GDP comes from government expenditures by the PA itself.
2. The Palestinians receive immense sums donated by the world.
3. Tax collection is almost unheard of, aside from the taxes collected (for Fayyad) by the Israeli government, which provides the PA with NIS 450 million (roughly $120 million) monthly; this comprises about 40% of the PA's budget.
The result is clear: Low GDP, but high disposable income. Indeed, it's an economic miracle.
Meanwhile, the situation is even more extreme in the Gaza Strip, where the PA spends 57% of its budget. Fayyad hands over salaries and allowances to 150,000 people, yet tens of thousands of them don't work, while others receive two salaries: One from Fayyad and another from Hamas. This is why the only industries active in Gaza are imports through smuggling tunnels and real estate - the surplus of cash in Gaza's banks prompts them to offer mortgages, and this results in a rise in real estate prices.
The former finance minister in Fayyad's government expressed it vividly in an interview with Le Monde: He said the Europeans are unaware that their money funds Hamas. Hamas doesn't know what to do with all the money in its pockets so it buys real estate. As result, the price of upscale beachfront real estate in Gaza increased by 300%. The money from the EU and from the taxes collected by Israel ultimately reaches Hamas, he said.
When Hamas took power, Fayyad was supposed to ensure (in line with the international community's demand) that the salaries he hands over do not reach Hamas hands. He indeed proceeded to remove 20,000 people form the list of salary earners, but two months later added more than 10,000 of them to the list of recipients of government allowances.
By doing so, Fayyad showed that he too is familiar with the Palestinian concept of the "revolving door." However, this is not his only economic failure.
Palestinian PM’s dubious schemes show he’s nothing like Israel’s founding father
http://www.ynetnews.com/Ext/Comp/ArticleLayout/CdaArticlePrintPreview/1,2506,L-3845482,00.html
On the security front, Palestinian PM Salam Fayyad counts on the IDF and Shin Bet. Despite his claims that the IDF should not be operating "in the Palestinian state's territory," he knows that he has no control on the ground, neither in the Gaza Strip which he dreams of reuniting with the West Bank, nor in his own backyard in Judea and Samaria.
If Fayyad is indeed interested and capable of reuniting Gaza and the West Bank, when and how does he intend to do so? Will he be leading a Palestinian army that will deploy in Rafah and move north until it retakes Gaza City from the hands of Hamas? Obviously not. He is in fact creating the conditions for boosting Hamas, so that the IDF will ultimately have to enter Gaza, retake it while paying a heavy diplomatic price, and then end the "occupation" and hand it over to Fayyad, without him having to do a thing.
And back to the economic front: About two years ago, the World Bank demanded that Fayyad not only cut down PA salaries (no results thus far) but also that he minimize the second-highest PA budget clause: Payments aimed at covering electricity and water bills which PA residents refuse to pay (the accumulated electricity debt of Gaza residents stands at $2.7 billion.) This clause, which constitutes about 8% of the PA's budget, is hidden by Fayyad under the heading “Net Lending.”
Fayyad seemingly charges local authorities for the electricity provided to their residents by Israel, yet immediately “loans” them the money. As such, they appear as a local authority debt to the Palestinian Treasury. Two years ago, he attempted to force PA residents to present proof of payment on their electricity bills before receiving government allowances. The PA’s “public service sector” immediately embarked on a warning strike, and Fayyad got the hint and has refrained from demanding that the bills be paid.
A few months ago, Fayyad came up with an original solution: As he hands over immense sums for the salaries of tens of thousands of security officials in Gaza, who no longer work since Hamas took power there, he raised their salaries by 4% and even got EU funding for this. However, at the same time he deducted a similar sum from these salaries for “electricity bills.”
Everyone was pleased until Hamas authorities found out about it. They viewed it as financially detrimental to their government, and in response stopped handing over to the Palestinian fuel authority the sums of money collected from Gaza residents who do pay for electricity. This was the reason for the latest fuel crisis in the PA.
In conclusion: Ben-Gurion, who was a man of real work and pioneering spirit would be turning in his grave had he heard that Fayyad - a man who excels in dubious schemes and in drafting impressive donation requests that include words like “transparency,” “responsibility,” and “economic stability” - has been crowned as his successor in the 21st Century.
View the original article at Yediot Ahronot
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Monday, February 8, 2010
Sunday, October 11, 2009
INCITEMENT WINS OVER THE ECONOMY AMONG THE PALESTINIANS AT THE END OF THE DAY
Originally published in Maariv
by Ben Dror Yemini
There have been numerous reports in the past number of months about the flourishing economy under the leadership of Palestinian Prime Minister Salam Fayyad. Various data demonstrate a significant rise in the GDP and the quality of life. Ramallah, the reports inform us, has Tel Aviv-style pubs. Cool. And Jenin, the city that achieved infamy because of the massacre that never occurred, has put on a new face with a new commercial center. Just like the Azrieli mall. And Zakariya Zubeidi, the guy who once used to be a wanted man, has changed his vocation.
But we’ve seen all this before.
In the 1990s a veritable fortune flowed into the Palestinians’ coffers. Every Palestinian received USD 1,330, as opposed to the Marshall Plan for the rehabilitation of Europe after World War II, which granted every European USD 272. In other words, four times as much. Yes, that much. That aid also contributed to an average growth rate of six percent between the years 1994-1999. Even Israel failed to achieve a growth rate of that sort in those years. What followed afterwards is well known. A particularly violent Intifada, which caused thousands of casualties and an economic breakdown. The Palestinians are still 30% away from the GDP per capita that they had a decade ago.
We all know the theory. “It’s the economy, stupid.” That might be a theory that applies to the West. But here in the East the story is a little different. Here the rules are different. In the competition between economic rationalism and religious incitement-the incitement wins. That didn’t begin this week. Nor did it begin nine years ago. That’s our history.
The Economy is of No Interest to Them
Jewish settlement brought in its wake economic prosperity. Cooperation would have led to shared prosperity. That isn’t what happened. Prosperity was an option. Incitement prevailed. Hajj Amin al-Husseini, Hitler’s friend and protégé, turned the Zionist plot to seize control over the Temple Mount into the focal point of his incitement. This very same Husseini also joined forces with the Muslim Brotherhood while they were building their influence and strength in Egypt.
The Muslim Brotherhood is the mother movement of both Hamas and the northern chapter of the Islamic Movement in Israel, headed by Sheikh Raed Salah. So that it is no coincidence that everyone, Husseini, Haniya and Salah, are all focused on el-Aksa Mosque.
They take no interest in the economy. They’re interested in incitement. They know that el-Aksa Mosque was once a focal point of rioting, just as it is a focal point of friction at present. That is where the masses throng to. Setting the fire is relatively easy. And when you pump the masses time and time again, as Sheikh Salah does, that the Zionists are seizing control of el-Aksa Mosque, the message gets through.
Israel Will be the First to Fall, Then Paris, Rome and London
Salah, say security officials, treads the line. He does not engage in hostile terrorist activity. He isn’t the one who established the terror cells. But he is the one who lays the emotional groundwork. He incites. He encourages. He inflames the passions. Ideologically, he is a Hamas man in every sense and form. He too advocates the establishment of an Islamic caliphate that will gradually seize control of the entire world. He wrote a series of articles about the revolution he yearns for. Israel, in its capacity as a Crusader castle, will be the first to fall. Then Paris, Rome and London will follow in its wake.
The prevailing discourse of rights has turned Salah into a person who enjoys immunity. In some Arab states he is a persona non grata. His requests to enter have been denied. After all, they don’t need another provocateur. But here he operates freely. Abets and incites. Lays the groundwork for subversive activity. Salah is a living reminder of the fact that democracy is not only the rule of rights, which are geared to protect minorities. Democracy is supposed to defend sometimes, only sometimes, the majority as well. Salah is protected. The majority has been left vulnerable. Democracy, and not only Israeli democracy, needs to do some soul-searching. Unless, that is, Salah and his ilk succeed in doing away with it before it manages to defend itself.
So that anyone who thinks that economic prosperity will ensure calm is deluding himself. All that is needed in order to bring about a renewed outburst is bitterness, incitement-which there is no lack of-as well as “continued construction” in the heart of Arab neighborhoods, or the seizure of more land, which is never evacuated, deep in the Arab population centers. That lethal combination of incitement, bitterness, provocateurs-mainly from the Palestinian side-exist at present as well.
We oughtn’t to be surprised if it explodes in our face.
by Ben Dror Yemini
There have been numerous reports in the past number of months about the flourishing economy under the leadership of Palestinian Prime Minister Salam Fayyad. Various data demonstrate a significant rise in the GDP and the quality of life. Ramallah, the reports inform us, has Tel Aviv-style pubs. Cool. And Jenin, the city that achieved infamy because of the massacre that never occurred, has put on a new face with a new commercial center. Just like the Azrieli mall. And Zakariya Zubeidi, the guy who once used to be a wanted man, has changed his vocation.
But we’ve seen all this before.
In the 1990s a veritable fortune flowed into the Palestinians’ coffers. Every Palestinian received USD 1,330, as opposed to the Marshall Plan for the rehabilitation of Europe after World War II, which granted every European USD 272. In other words, four times as much. Yes, that much. That aid also contributed to an average growth rate of six percent between the years 1994-1999. Even Israel failed to achieve a growth rate of that sort in those years. What followed afterwards is well known. A particularly violent Intifada, which caused thousands of casualties and an economic breakdown. The Palestinians are still 30% away from the GDP per capita that they had a decade ago.
We all know the theory. “It’s the economy, stupid.” That might be a theory that applies to the West. But here in the East the story is a little different. Here the rules are different. In the competition between economic rationalism and religious incitement-the incitement wins. That didn’t begin this week. Nor did it begin nine years ago. That’s our history.
The Economy is of No Interest to Them
Jewish settlement brought in its wake economic prosperity. Cooperation would have led to shared prosperity. That isn’t what happened. Prosperity was an option. Incitement prevailed. Hajj Amin al-Husseini, Hitler’s friend and protégé, turned the Zionist plot to seize control over the Temple Mount into the focal point of his incitement. This very same Husseini also joined forces with the Muslim Brotherhood while they were building their influence and strength in Egypt.
The Muslim Brotherhood is the mother movement of both Hamas and the northern chapter of the Islamic Movement in Israel, headed by Sheikh Raed Salah. So that it is no coincidence that everyone, Husseini, Haniya and Salah, are all focused on el-Aksa Mosque.
They take no interest in the economy. They’re interested in incitement. They know that el-Aksa Mosque was once a focal point of rioting, just as it is a focal point of friction at present. That is where the masses throng to. Setting the fire is relatively easy. And when you pump the masses time and time again, as Sheikh Salah does, that the Zionists are seizing control of el-Aksa Mosque, the message gets through.
Israel Will be the First to Fall, Then Paris, Rome and London
Salah, say security officials, treads the line. He does not engage in hostile terrorist activity. He isn’t the one who established the terror cells. But he is the one who lays the emotional groundwork. He incites. He encourages. He inflames the passions. Ideologically, he is a Hamas man in every sense and form. He too advocates the establishment of an Islamic caliphate that will gradually seize control of the entire world. He wrote a series of articles about the revolution he yearns for. Israel, in its capacity as a Crusader castle, will be the first to fall. Then Paris, Rome and London will follow in its wake.
The prevailing discourse of rights has turned Salah into a person who enjoys immunity. In some Arab states he is a persona non grata. His requests to enter have been denied. After all, they don’t need another provocateur. But here he operates freely. Abets and incites. Lays the groundwork for subversive activity. Salah is a living reminder of the fact that democracy is not only the rule of rights, which are geared to protect minorities. Democracy is supposed to defend sometimes, only sometimes, the majority as well. Salah is protected. The majority has been left vulnerable. Democracy, and not only Israeli democracy, needs to do some soul-searching. Unless, that is, Salah and his ilk succeed in doing away with it before it manages to defend itself.
So that anyone who thinks that economic prosperity will ensure calm is deluding himself. All that is needed in order to bring about a renewed outburst is bitterness, incitement-which there is no lack of-as well as “continued construction” in the heart of Arab neighborhoods, or the seizure of more land, which is never evacuated, deep in the Arab population centers. That lethal combination of incitement, bitterness, provocateurs-mainly from the Palestinian side-exist at present as well.
We oughtn’t to be surprised if it explodes in our face.
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