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

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)


Egypt to reduce subsidised staple food prices

Updated 16 November 2019

Egypt to reduce subsidised staple food prices

  • Nearly one in three Egyptians lives below the poverty line, according to official figures released in July
  • The supply ministry spokesman said the measures aimed to make goods available "in suitable quantities and prices"

CAIRO: Egypt is to reduce the prices of subsidised food staples from next month, the supply ministry spokesman said Saturday, as the country's economy shows signs of recovery.
"Prices of cooking oil, sugar, rice and flour will be reduced starting the first of December," said spokesman Ahmed Kamal.
He said the measures aimed to make goods available "in suitable quantities and prices".
Last month, the government reinstated 1.8 million Egyptians to a food subsidy programme as instructed by President Abdel Fatah El-Sisi.
Also in October, fuel prices were cut by 25 piastres (0.015 US cents) a litre following several rounds of price hikes under a tough austerity programme that triggered popular discontent.
The measures came after rare and small-scale protests in September calling for El-Sisi's removal after an exiled Egyptian businessman accused the president and top military brass of corruption.
Harsh austerity measures introduced by El-Sisi's government since he took office in 2014 have hit poor and middle-class Egyptians.
Nearly one in three Egyptians lives below the poverty line, according to official figures released in July.
The tough reforms including subsidy cuts and a devaluation of the local currency were tied to a three-year $12-billion bailout loan from the International Monetary Fund secured in 2016.
The IMF loan was disbursed in full earlier this year, in a boost for the economy.
Egypt's economy was sent into a downward spiral by the 2011 uprising that toppled longtime autocrat Hosni Mubarak and has also been hit by extremist attacks that damaged its vital tourism sector.
But the official statistics agency said inflation fell to its lowest level in nearly a decade last month, easing to 2.4 percent compared with 17.5 percent a year earlier.