Thousands
of Palestinians take to the streets. In Hebron, demonstrators burn an
effigy. In Tul Karm, Ramallah, and other cities, they block streets and
set tires ablaze. Teens hurl stones. All of the West Bank's bus, truck,
and taxi drivers go on strike for a day. In Bethlehem, truckers park
sideways, blocking streets. In Nablus, kindergarten teachers join the
strike; elsewhere storekeepers shut their shops. Universities announce
they, too, will strike.
These are updates from the West Bank over the past week. They sound
as if taken from the start of the first Palestinian uprising against
Israel 25 years ago. But the leader burned in effigy in Hebron was Salam
Fayyad, prime minister of the Palestinian Authority. The Palestinian
government in Ramallah, rather than Israel, is the direct target of
protest. Economic frustration sparked the fury. This sounds like a
variation on revolts in other Arab states—except the Palestinian
Authority isn't an independent state. Set up as to provide short-term,
limited autonomy until a peace agreement, it has become the lasting
means by which Israel outsources its rule over Palestinians in occupied
territory. Donor countries foot the budget; the PA provides local
services. Israel's current government acts as if the arrangement can
last forever. The protests show how unstable it really is.
The immediate reason for anger was the PA government's decision to
increase fuel prices and the value-added tax on goods and services. The
cost of filling a gas tank is, of course, a function of world markets.
But in the Palestinian Authority, it's also a result of the price that
the Israeli government sets, including Israeli taxes. The 1994
Paris Protocol,
which governs economic relations between Israel and the supposedly
temporary Palestinian Authority, specifies that gasoline can't be more
than 15 percent cheaper in PA territory than in Israel. It also links
the level of value-added tax in the PA to the Israeli rate—so when
Israel hiked its rate this month, so did Fayyad's government.
The protocol did leave a little wiggle room for smaller increases.
But the PA is short on cash. Much of its budget comes from state
donors—including the United States and European and Arab countries. The
Education Ministry building in Ramallah has a sign saying it was donated
by the Kingdom of Norway. If the PA's operating budget were a building,
it would also have a donation plaque at the door.
But donors sometimes don't pay pledges, or pay late. As of June, the
PA suffered a shortfall of $300 million in donor funds, according to one
economic source. More recently, Palestinian Finance Ministry officials
reportedly
placed the shortfall at $1.2 billion, a quarter of the Authority's
annual budget. PA employees—nearly a sixth of the West Bank
workforce—can't be sure when they'll get their monthly salary, or how
much of it they'll receive. Rumors that Gulf states are holding back
funds at Washington's request—in order to pressure Palestinian President
Mahmoud Abbas to drop his request for U.N. recognition of Palestinian
statehood—are rampant. Actually, says political analyst Mouin Rabbani,
the Gulf states have always paid late or not at all, as a result of
inter-Arab disputes with the PA. The rumors do, however, testify to the
level of America's political credit among Palestinians.
The foreign donations are supposed to lay the foundation for
Palestinian independence. Fayyad, an American-trained economist and
ex-IMF official, promised in 2009 that he would build a state from the
bottom up by 2011. He has made PA finances more transparent, earned
Western respect—and angered veteran members of Abbas's Fatah movement.
What he can't do is build a self-sustaining economy. The Paris Protocol
locks the PA into a customs union with Israel. The West Bank's currency
is Israel's shekel. Israel controls the borders, imports and exports.
Almost 60 percent of West Bank land is still defined as Area C, under
Israeli rather than PA administration. Area C is where there's open
space that could be used for industry, but it now serves as a reserve
for settlement growth. Instead of building a state, the donors are
reducing the cost to Israel of governing the West Bank. Yet when the
donors hold up funds, they impoverish people in Bethlehem and Tul Karm.
On Tuesday, Fayyad announced a partial rollback of the tax and price
increases and promised to pay some overdue salaries. So far,
demonstrations and strikes are continuing. Increasingly, demonstrators
demand that the PLO renegotiate the Paris Protocol. But without a
political change—meaning independence—there's little chance of altering
the economic relationship. No one knows whether the protests will grow
or sputter out now only to flare up again later. They could force a
change of power in the PA or its collapse or turn more directly against
Israel. The outsourced occupation depends on the whims of donors; it
produces high prices, hunger, unemployment, and unpaid salaries.
Economically, it cannot be sustained.
The subtext of the last week's protests is that the donors are
essential to the PA on a day-to-day basis. But in the longer run, Europe
and the United States are helping Israel maintain the political
stalemate. Rather than just write hurried checks, they should set a
condition for both Israeli Prime Minister Benjamin Netanyahu and Abbas:
renew negotiations now on a two-state agreement. Europe is busy with its
own problems, though, and Washington certainly can't be bothered until
November. What Ramallah will look like in November is anyone's guess.
Source
http://prospect.org/article/rebellion-ramallah
