Palestinian Authority cuts back wages in tax, prisoner dispute with Israel

Norwegian Foreign Minister Ine Marie Eriksen Soreide attends a joint press conference with her Palestinian counterpart Riyad al-Maliki in the West Bank city of Ramallah, on March 10, 2019. (AFP)
Updated 10 March 2019
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Palestinian Authority cuts back wages in tax, prisoner dispute with Israel

  • Israel cut tax payments to PA over prisoner stipends
  • PA then refused to accept any Israeli transfers

RAMALLAH: The Palestinian Authority is scaling back wages paid to its employees in response to a cash crunch deepened by a dispute with Israel over payments to families of militants in Israeli jails, it said on Sunday.
In February, Israel announced it was deducting five percent of the revenues it transfers monthly to the Palestinian Authority (PA) from tax collected on imports that reach the occupied West Bank and Hamas-run Gaza Strip via Israeli ports.
Israel said the sum represented the amount the PA pays to families of Palestinians jailed in Israel or killed while carrying out attacks or other security offenses.
Palestinians see their slain and jailed as heroes of a national struggle but Israeli and US officials say the stipends fan Palestinian violence and are scaled so relatives of prisoners serving longer sentences receive larger payments.
After Israel’s deduction announcement, Palestinian President Mahoud Abbas said the PA would not accept any of the tax revenues, which totalled 700 million shekels ($193 million) in January and account for about half of the authority’s budget.
As a result, Palestinian Finance Minister Shukri Bishara said the PA would pay full salaries — which had been due on March 1 — only to its lowest-earning employees, or the 40 percent of its workforce that takes home 2,000 shekels ($550) or less a month.
Civil servants earning more than that, including cabinet ministers, will have their wages cut by half, he told a news conference.
However, Bishara said prisoners’ families will continue to be paid their full allocations.
“No force on earth can alter that,” he told a news conference.
Bishara said the PA will have to take bank loans of between $50 million to $60 million for the coming five to six months to weather the crisis.
An Israeli official, commenting on condition of anonymity, said the PA had a cash-flow problem as a result of US cuts in aid to the Palestinians and the tax revenues dispute but that the situation would not spiral out of control.
“The nightmare scenario of the PA collapsing, or of PA security coordination with Israel ceasing, won’t happen,” the official said.
“No one, including us and the United States, would allow that. If need be, we’ll look for ways of preventing this.”
The US has cut all aid to the Palestinians, including $360 million it used to give to the United Nations Relief and Works Agency for Palestinian refugees. The cuts were widely seen as a bid by Washington to press the Palestinians to re-enter peace talks with Israel that collapsed in 2014.


($1 = 3.6288 shekels)


UN agency to donors: Back Palestine efforts anew, keep funding at 2018 levels

The UN Relief and Works Agency provides food assistance to 1 million people in Gaza every three months, which is half of the area’s population. (AFP)
Updated 19 March 2019
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UN agency to donors: Back Palestine efforts anew, keep funding at 2018 levels

  • ‘Exceptional’ contributions enabled the UN Relief and Works Agency to fund its entire 2018 budget of $1.2 billion
  • ‘Countries that supported us last year I would say were extremely proud to contribute to the solution’

UNITED NATIONS: The head of the UN agency that helps 5.3 million Palestinian refugees on Monday urged donors who filled a $446 million hole in its budget last year after the Trump administration drastically cut the US contribution to be equally generous this year.
“Last year we had an extraordinary crisis and an out of the ordinary response,” Pierre Krahenbuhl said in an interview with The Associated Press. “Our humble request to all the donors is: Please keep your funding levels at the same level as 2018.”
He said he has been thanking donors for their “exceptional” contributions that enabled the UN Relief and Works Agency to fund its entire 2018 budget of $1.2 billion.
Krahenbuhl said the agency, known as UNRWA, also adopted a $1.2 billion budget for 2019, and this year it is getting nothing from the United States. Last year, the Trump administration gave $60 million, a dramatic reduction from the $360 million it provided in 2017, when the United States was the agency’s largest donor.
US President Donald Trump said in January 2018 that the Palestinians must return to peace talks to receive US aid money — a comment that raised alarm from leaders of 21 international humanitarian groups, who protested that the administration’s link between aid and political objectives was “dangerous.”
Krahenbuhl said the campaign that UNRWA launched immediately after the US slashed its contribution succeeded as a result of “very important donations,” starting with the European Union, which became the agency’s biggest donor. He said 40 countries and institutions increased funding to UNRWA, including Germany, United Kingdom, Sweden, Japan, Canada and Australia. Qatar, Saudi Arabia, United Arab Emirates and Kuwait each gave $50 million, he said.
“Countries that supported us last year I would say were extremely proud to contribute to the solution,” Krahenbuhl said.
Last year, he said, the number of multi-year funding agreements with donors rose to 19.
So UNRWA right now is in “a somewhat better position” than it was last year, with a shortfall of just over $200 million, Krahenbuhl said.
So far this year, the agency has received $245 million and is expecting $100 million more, he said, which means it should be financially OK until about May.
“But from then on we’ll start to ... reach some crisis points,” Krahenbuhl said.
He said UNRWA is thinking about holding some events in the next two or three months “to collectively mobilize the donor community.” In June, he said, there will be a pledging conference at which the UN and donors will take stock of the agency’s financial situation.
Krahenbuhl said he is committed to making up for the $60 million that UNRWA is losing from the United States this year through internal cost saving measures to reduce the agency’s expenditures.
“That’s going to hurt, but that’s where we feel our financial responsibility, so that we preserve the trust that was generated by the level of donors,” he said, noting that UNRWA last year saved $92 million.
Krahenbuhl said donors recognize the agency does important work. He pointed to the 280,000 boys and girls in UNRWA schools in Gaza and the food assistance the agency provides to 1 million people there every three months. “That’s half of Gaza’s population,” he said.
The UNRWA chief also said that continuing the agency’s services to Palestinian refugees in Syria, Lebanon, Jordan, Gaza and elsewhere in the Mideast “is in everybody’s interest” and important for stability in the region.
“If you take Gaza right now ... it’s continuously at the razor’s edge,” Krahenbuhl said, stressing that any shift in humanitarian assistance or conditions that people live in “can trigger the need for justification, or the excuse ... to go back to war.”
Noting his own experience in the 2014 war between Israel and Hamas, which controls Gaza, Krahenbuhl said, “this is absolutely devastating and needs to be avoided.”