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
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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.


Russia, Iran, Turkey seeking deal on new Syria constitution body

Updated 5 min 35 sec ago
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Russia, Iran, Turkey seeking deal on new Syria constitution body

  • Foreign ministers near agreement on the composition of a Syrian constitutional committee
  • UN Special Envoy has tried since January to clinch agreement on the identity of 150 members

GENEVA: Russia, Iran and Turkey are nearing agreement on the composition of a Syria committee that could pave the way for the drafting of a new constitution and for elections after a devastating civil war, diplomats said on Tuesday.
The foreign ministers of the three nations, who support opposing sides in Syria’s nearly eight-year-old conflict, began talks in Geneva to seal their joint proposal and seek the United Nations’ blessing for it, they added.
Iranian Foreign Minister Javad Zarif, asked on arrival whether he expected to reach an agreement with counterparts Sergei Lavrov of Russia and Mevlut Cavusoglu of Turkey, told reporters: “I hope so.”
Staffan de Mistura, UN Special Envoy for Syria who steps down on Dec. 31, has tried since January to clinch agreement on the identity of 150 members of a new constitutional committee to revitalize a stalled peace process.
President Bashar Assad’s government and the opposition fighting to topple him have each submitted a list of 50 names. But Russia, Iran and Turkey have haggled over the final 50 members from civil society and “independent” backgrounds, diplomats say.
“The three countries are coming with a proposal for the third list, which has been the heart of the problem,” one diplomat following the negotiations closely told Reuters.
Turkey and other nations would consider working with Assad if he won a democratic election, Cavusoglu said on Sunday.
Turkey supports rebels who control part of northwest Syria. A year ago, Turkish President Tayyip Erdogan described Assad as a terrorist and said it was impossible for Syrian peacemaking efforts to continue with him.
Assad, whose forces have reclaimed most of Syria with Russian and Iranian support apart from Idlib, a northwestern province, has clung to power throughout the conflict and is widely seen as being loath to yield power after it ends.
The Damascus government has previously brushed off UN-led efforts to set up a constitutional committee.
Syrian Foreign Minister Walid Al-Moualem, in comments reported by state media on Monday, said it was “early to talk about” the constitutional committee starting work. He blamed attempts at “interference” by Western states for the hold-up in its formation, in addituon to “obstacles” laid by Turkey.
Syrian authorities have only ever signalled a readiness for “amendments” to the existing constitution and also said these must be put to a referendum.
De Mistura said at the weekend that the constitutional committee could be a starting point for political progress.
“It does touch, for instance, on presidential powers, it could and should be touching on how elections are done, on division of power, in other words a big issue,” he said.