Protesting West Bank’s economic woes

For those familiar with the scene in Ramallah, the bustling city was not as busy as it usually is on Monday morning. The streets were missing the usual yellow and orange, as taxi drivers declared a one-day strike across the West Bank.

At Al-Manara Square, taxi drivers led the demonstrations against the rising cost of living.

Tens threw their car keys onto the street in protest of the hike in fuel prices, and held banners that read: “Gulf weather, Paris expenses and Somalia wages,” in reference to the soaring prices and low salaries.

At the nearby taxi station, students and workers stood by in confusion trying to find a way to get to work or to school. Ramallah, as most other West Bank cities, was almost paralysed.

Akram Hamed, 40, is a construction worker from Silwad. It took him almost two-and-a-half hours to get to Ramallah. The 14km drive from his village northeast of Ramallah usually takes just 20 minutes.

“I had to hitchhike,” Hamed said. “We went from one private car to another and waited,” he said.

This inconvenience is the least of Hamed’s problems. Like many others, he hopes the protests will drive the Palestinian Authority (PA) to do something about the poor economic conditions.

The PA is in debt, it’s facing a projected $1.3bn deficit in 2012 and foreign aid is lagging. The government has already delayed paying salaries for its 154,000 employees several times this year. More than a fifth of the population is unemployed and the PA has introduced a hiring freeze.

And if that was not enough, Palestinian officials say revenues from Gaza went down from 28 per cent to four per cent since Hamas took over the strip, yet Gaza takes up to 48 per cent of the PA’s budget.

Cost of Occupation

According to a PA study produced in 2011, the cost of the Israeli occupation to the Palestinian economy amounted to $6.8bn – that mean 84.9 per cent of the GDP.

That staggering cost can be understood once it is put into context: Israel has exclusive military, civil and administrative control over 60 per cent of the West Bank, as well as the occupation measures restricting movement and access, leaving little room for growth, let alone sustainable development.

It cannot go un-noted that the Palestinian economy is highly dependent on the Israeli economy as per the Paris Protocol. The treaty that governs the economic ties between the PA and Israel established a “custom union” model between the occupier and the occupied.

The Paris Protocol, signed as part of Oslo in 1994, stipulates that Palestinian VAT is only allowed to be two per cent less than that of Israel, and that the difference in gasoline prices cannot be more than 15 per cent of the price to the Israeli consumer, even though the average Israeli income is 30 times more than the income of a Palestinian.

Palestinians import most of their basic goods. As the price of petrol and food increased worldwide, Palestinians imported this increase as well.

And Palestinian Prime Minister, Salam Fayyad, is being blamed.

Youths burning tires and blocking main streets have been burning effigies of Fayyad, asking him to leave.

Singled out, Fayyad has been meeting journalists and running between local TV and radio stations to explain what is going on. He said repeatedly that he is not clinging to his post as premier, but confirmed that he will not turn his back on the crisis and shall take responsibility as a prime minister.

Long term goal

Fayyad said that he does not have a magic wand.

And his words were echoed by President Mahmoud Abbas, who called on Palestinians to be patient and promised to do the best he can to mitigate the crisis. Because solving it, for now, remains a long term goal.

Although some analysts have been lashing out at Fayyad for adopting an economic model based on services and increasing the overall GDP on the account of long term investments, others have praised his moves that aim to minimise dependence on foreign aid.

His fiscal policy aside, critics and supporters agree that Fayyad – the man, not the prime minister – is being used as a scapegoat by many political circles.

The Palestinian street is boiling: the peace process coffin is full of nails, Fatah-Hamas reconciliation is stumbling and foreign donors are either unwilling or unable to save the authority.

If anything, no one seems to have a definite solution.

However, one thing seems to be clear: even taxi drivers prove to be more organised than the Palestinian factions!

Follow Rania Zabaneh on Twitter: @RZabaneh