Palestine may replace Israeli currency to reduce dependency

A Palestinian boy sells fresh mint in downtown Gaza City. Palestinians have long demanded scrapping of the Israeli currency. (AFP/file)
Updated 18 February 2018

Palestine may replace Israeli currency to reduce dependency

AMMAN: The Palestinian government has decided to begin reducing dependency on Israeli currency. Prime Minister Rami Hamdallah’s government decided on Feb. 6 to establish a committee to study “ways to shift from the use of the Israeli shekel to other currencies as well as studying the issuance of a national currency.”
Palestinians have been trying to find ways to wean themselves away from total dependency on Israel’s economy for a long time. Scrapping the Israeli currency, which is used throughout the occupied territories, has long been a demand of non-violent Palestinian activists.
Alex Awad, author of “Palestinian Memories: The Story of a Palestinian Mother and Her People,” explained the thinking behind the demand to shift away from using shekels as the primary currency for Palestinians.
“Why do we accept bills that have images of Israeli leaders on them? Why, with all of the evil measures against us, making our lives miserable, do we continue to use the currency of the very government that oppresses us? When are we going to end our addiction to their rules?” he said.
But Palestinian economists warn that the move could be disastrous for the local economy.
A retired senior monetary official told Arab News that until Palestinians are truly free and independent, there are no easy solutions to the currency issue. “When you tamper with currency you are risking a major economic problem for people,” he said.
The source, who asked not to be identified, noted that many Palestinians work in Israel. And, he added, the Paris agreement that regulates the Palestinian government’s tax and customs revenue specifies that Israeli shekels must be used in all economic dealings with Israel.
While it is easy to make some changes in the use of other currencies such as the US dollar or the Jordanian dinar, it is impossible to totally abandon the Israeli currency, the source said.
Samir Abdullah, a senior researcher at the Economic Policy Research Institute (EPRI) in Ramallah, told Arab News that it is possible to lessen dependence on the Israeli currency but that doing so would only affect a small portion of overall revenue.
“The biggest problem (is) the 7 billion shekels ($2 billion) in tax and custom revenues that come through Israel, which constitutes about 70 percent of overall revenue for the Palestinian government.”
Majed Arouri, executive director of the Civil Commission for the Independence of the Judiciary and Rule of Law, told Arab News that the Palestinian government’s decision was unwise and hasty.
“The Israeli government has been working on withdrawing the Jordanian dinar and US dollar from the Palestinian economy and has limited the availability of dinars,” Arouri said.
“The only dollar bill available in Palestine these days is the 100-dollar bill, which makes it difficult to conduct small-business dealings,” he added. Awad told Arab News that he sees the government’s decision as a small step toward Palestinian economic independence.
“This is a small act, but it is something everyone can do and it allows people to feel that they are not helping the occupiers,” he said.
Awad added that until Palestinians have their own currency, it is important to decrease their dependency on Israeli money.
“A large percentage of the currency coming to Palestine is in dollars, euros or Jordanian dinars,” he said. “Why are people so quick to change it into Israeli shekels?”
One possible solution to the dilemma that is being discussed by economists and activists is electronic banking and financial transfers.
A strong banking system and a tech-savvy population in Palestine would certainly mean that currencies other than the Israeli shekel could easily be used more often.
The EPRI’s told Arab News that one way to help lessen dependence on the shekel is to use credit cards.
“If we increase the use of credit cards, and at the same time work on a major expansion of points of sale that use these cards, we can use different currencies from the Israeli shekel,” he said.
Totally divorcing Palestinians from dependence on the Israeli economy and currency will be difficult, and the independent path that is being sought requires intense evaluation. But one thing is certain: The role of currency in a future Palestinian state is crucial.

Kurds split on next Iraqi president and throw government formation into further turmoil

Updated 26 September 2018

Kurds split on next Iraqi president and throw government formation into further turmoil

  • The failure of the Kurds to agree on a single candidate will threaten the stability of the Kurdish region
  • A close ally of KDP leader Massoud Barzani has been backed as a presidential nomination

BAGHDAD: Iraq’s main Kurdish political forces have failed to agree on a candidate for the post of president, highlighting the depth of the rift  between them and redrawing their map of influence in Baghdad, negotiators told Arab News.

Electing the president is the second step in the process of forming a government. According to the political power sharing agreement adopted by Iraqi political parties since the 2003 US-led invasion that toppled Saddam Hussein, the post is allocated to the Kurds.

By the end of Monday, the last day for nominations, more than 30 candidates, including a woman, had declared their nominations for the post but the absence of consensus between the Kurdish parties on a single candidate, meant the vote was delayed until Thursday.

The president in the Iraqi constitution does not have wide executive powers, but could play a pivotal role in resolving disputes between Baghdad and Erbil, the capital of the autonomous Kurdish region, and between the Shiite, Sunni and Kurdish powers in Baghdad. 

The Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP), the largest Kurdish parties in Iraq control more than 50 seats in parliament. The two parties have shared the federal posts allocated to the Kurds for the last 15 years. Voting for the PUK’s presidential candidate had become a tradition, but the insistence of the KDP to compete for the post this time has confused Iraq’s parties and forced them to renegotiate.

“It is time to get this position back to the larger Kurdish bloc,” Irdlan Noor Al-Deen, a KDP leader and MP said. “We are insisting to compete for the post ... and we will not discuss the option of stepping down.”

The failure of the Kurds to agree on a single candidate will threaten the stability of the Kurdish region and deepen the disagreement between the two Kurdish parties that arose in October last year when Kurdish forces associated with the PUK refused to fight Iraqi security forces after they launched a campaign to regain central government control over the disputed areas between Baghdad and Erbil. The offensive was in response to the independence  referendum held a month earlier.

The two parties are squaring up in elections scheduled for next week for the Kurdistan Regional Government.

Azad Warti, a PUK leader, said that if the political “fire” from the KDP continued after the elections “we will review our relationship with them.”

“There are a lot of joints areas between us ... and continuing with this approach means that we may not continue with them in the same front,” he said.

Last week, the PUK’s leadership nominated the Kurdish veteran politician Barham Salih, while the KDP nominated Fuad Hussein, the head of the Kurdistan Regional Presidency Office and personal secretary of Massoud Barzani, the most prominent Kurdish leader and former president of the Kurdish region.

It is not clear why Barzani, who headed the KDP, suddenly insisted on the presidential candidacy. Some observers see this step as an attempt to seek revenge against the Kurdish and Shiite forces that rejected the independence referendum and supported Prime Minister Haider Al-Abadi when he imposed a series of financial and administrative sanctions on Kurdistan.

“Barzani is looking to get revenge from the leaders of the PUK because he believes that they let him down in his battle with Baghdad when he held the referendum,” Abdulwahid Tuama, a political analyst told Arab News.

“Also, getting the post for the KDP candidate will reinforce the divisions between the PUK and its Kurdish allies in Baghdad, and this will provide the KDP with a great opportunity to be the touchstone in the ongoing negotiations to form a government in Baghdad.”

The major Shiite blocs, which initially declared their support for Barham Salih, have now said they do not mind if the KDP takes over the president, but stipulated the replacement of the party's official candidate.

“Fouad Hussein was rejected by all Shiite political forces. We told Barzani that we have no objection to voting for his candidate, but he has to nominate someone else,” A key Shiite negotiator told Arab News.

“Hussein is the private secretary of Barzani and if he is elected as president of Iraq, it means that the president will be Barzani’s secretary.

“This is an insult to the country and to all, and we will never accept it.”

Iran and the United States have been the most prominent international players in Iraq since 2003. Both are deeply involved in the ongoing negotiations between Kurdish, Shiite and Sunni parties. 

Brett McGurk, the US envoy to Iraq and Syria, has played a key role in naming Barham Salih as a candidate for the PUK, while Gen. Qassim Sulaimani, the commander of Iran’s Quds Force, flew to Erbil on Sunday evening to meet Barzani and “persuade him to abandon his stubbornness and accept a compromise that excludes both candidates (Salih and Hussein),” two Shiite negotiators told Arab News. 

“Sulaimani went last night to Erbil to smooth the tension and try to find a solution that would be accepted by all the related parties,” a key Shiite negotiator told Arab News.

“He will suggest to provide a new candidate who should be accepted by all Kurdish, Shiite and Sunni parties. 

The negotiator said parliament may vote to reelect Fuad Massum, the outgoing Iraqi president, as he is accepted by all.