Amid a crushing financial crisis, finance minister Nabil Qassis is the last to speak!

Omar Shaban*

Many people have spoken about the stifling financial crisis the Palestinian National Authority is living through, which took shape in the postponement of the payment of its employees' salaries for the month of June until further notice. Ahmad Majdalani, the Minister of Labour, spoke; the news reported that he called for a unilateral separation of the Palestinian National Authority from the Gaza Strip on the grounds that it is the cause of the crisis. So too did Ghassan al-Khatib, director of the government press office, whose job appears to have been reduced to announcing the delay in paying the salaries of government employees or announcing the cessation of supplying the Gaza Strip with the industrial fuel needed to generate electricity because of the Gaza government's failure to pay what it owes. Then came the journalists and writers, among them the head of the journalists' syndicate Mr Abdel Nasser al-Najjar, who asserted categorically in an article of his that the Gaza Strip is the cause of the financial crisis the Authority is living through, as though he too wanted to propose a unilateral separation of the Palestinian National Authority from the Gaza Strip as a solution to this crisis; and, as was to be expected, President Abu Mazen met these repugnant proposals with categorical rejection. Many politicians of every political stripe and of microscopic organisations also spoke, among them some who know nothing of financial affairs, ending with Prime Minister Dr Salam Fayyad, who merely warned that the crisis is serious and heading for the worse without saying what the way out is!! Among them are those for whom this crisis provided a subject through which to come out and address the patient people, and those who saw in it a golden opportunity to reassert their patriotism and the injustice of the donors and the intransigence of Israel, which of course, according to these people, bears exclusive responsibility for all our problems. Everyone has spoken, and the Minister of Finance has remained the last to speak, even though he is the person primarily responsible for this issue that presses upon the whole of Palestinian society.

In fairness it must be said that Mr Kassis has contented himself with placing a scrolling item in red on the Ministry of Finance's page saying, word for word: “Minister of Finance: delay in disbursing salaries because of the financial crisis and the declaration of a state of austerity”. Without any additional word about this issue, which threatens not only the employees of the National Authority and their families but strikes at the well-being of Palestinian society as a whole. There is no doubt that the Minister embarked on a suicidal mission in accepting the post of Minister of Finance of the Palestinian National Authority at a time when it is suffering from a stifling financial crisis that has continued for months, indeed for several years. From here we declare our full solidarity with him and our wishes for success in the impossible mission.

And if the famous American film “mission impossible”, as everyone knows, is a work of imagination, the Palestinian people face a very real and genuine mission that touches its present and its future and in which there is no room for imagination and political outbidding, namely the financial administration of the Palestinian National Authority and the Palestinian people, both of them under occupation. Allow me on this occasion to have my say as others have done, hoping that you will bear with these observations, which aim to contribute to a process of genuine and serious reform of the Palestinian Authority's financial situation. And because genuine reform begins with candour, frankness and the strengthening of full transparency:-

– The Ministry of Finance's website is very poor and quite unworthy of you, for its level does not rise to that of many individual websites or the websites of local institutions suffering from a poverty of resources. Most of its pages carry the heading “coming soon”. The website needs enormous development, not only in filling in content but in providing a full and simplified explanation of the Authority's financial situation. The website presents reports on the Authority's financial situation in strange, very general terms under which much ambiguity may be hidden, perhaps deliberately, while some reports stopped at the year 2009 and we are in the year 2012. Nevertheless, I wrote a letter to you through the website several days ago asking for many clarifications so that my article would be supported by official information, and I waited for a reply from your office … but to no avail, as I have received no reply to date. We hope there is no cause for concern. Therefore I suggest that you delete the “contact us” section from the website, because it does not work.

– The item placed on the Ministry of Finance's website referred to above carried a glaring contradiction between the non-payment of salaries and the declaration of a state of austerity. It should have said: the Ministry of Finance declares a state of austerity so as to be able to pay the salaries of its employees. Or is the meaning that the state of austerity will begin with not paying the employees' salaries!! And if that is the case!! with whom, one wonders, will the state of austerity end!

Mr Minister: I suggest that you break your silence and speak about the National Authority's financial situation in a very high degree of detail, and I propose that you address these issues:-

First: with regard to employees:

– How many employees does the Palestinian National Authority have as of July 2012? And what is the total of their salaries and salary supplements of incentives and benefits …

– How many people are contracted with the Authority on consultancy contracts!! And is it true that the financial remuneration for these contracts reaches ten thousand dollars a month, and are their financial allocations delayed because of the financial crisis as is the case for the other official employees or not!! On what bases are these consultants contracted!! And is there any intention to halt these contracts as part of the declared state of austerity?? The budget law for 2012 affirmed that contracting allocations would be reduced by 30%.

Second: with regard to the Gaza Strip:

– How many Authority employees are there currently from the Gaza governorates, what are their job grades, who among them still receives their salaries, and what is the total value of the salaries and their proportion of the total salaries! How many new employees from the residents of the Gaza Strip have been appointed in the last five years, and how many have had their salaries cut off for various reasons! Previous reports of the Ministry of Finance state that the number of Gaza Strip employees falls from year to year and that no one from the Gaza Strip has been appointed in the last five years. Please clarify.

– What are the other items of expenditure that the Palestinian Authority bears towards the Gaza Strip, their values in detail, the number of beneficiaries from them, the mechanism of disbursement and the manner of follow-up?? The general budget law for 2012 says that the Gaza Strip consumes 45% of total public expenditure and not of the total general budget. It is therefore necessary to clarify what is meant by that!! and to detail the proportions allocated to the Gaza Strip from each item of the general budget individually. This issue needs clarification so that we may limit the culture of hatred and incitement practised by some of the short-sighted and those poor in national belonging.

Third: with regard to indebtedness

– What is the total debt of the Palestinian National Authority and the centres of indebtedness, as follows:-

– Debts to Palestinian banks

– Debts to the private sector.. contractors, medicine-supply companies… and others..

– Debts to foreign banks

– Other debts

– The value of the interest the Authority pays on these debts / loans.

– Is it true that the Palestinian National Authority has borrowed more than a billion dollars from the employees' pension and retirement fund! I have information that the sum is more than that. I hope I am mistaken. And if that is the case!! what is the Authority's plan to return the sum borrowed to the savings and pensions fund! And what are the possible scenarios for repaying this sum in the event that the National Authority is dissolved, as some propose from time to time!!! Allow me to remind you here that the Authority has no right to borrow from the fund without obtaining the approval of the savers and pensioners, since they are in the end the owners of this money.

Fourth, with regard to the donor countries:

– What are the sums paid by the countries that pledged to support the Palestinian National Authority and to contribute to the process of reconstructing the Gaza Strip at the donors' conference held on the second of March 2009 in the Egyptian city of Sharm el-Sheikh, which was organised specifically to support the reconstruction of the Gaza Strip shortly after the Israeli war on the Strip? The Palestinian National Authority presented its reconstruction plan with a total value of 2.8 billion dollars, of which 1.3 billion was allocated to the reconstruction of the Gaza Strip (40%), while the remainder was allocated to supporting the general budget of the Palestinian National Authority. The conference ended with pledges far exceeding what the Palestinians had asked for.

– Which countries and bodies are the greatest supporters of the National Authority, and to what extent do they honour their pledges!! We know that donor countries and bodies usually pledge to support the Authority annually and not monthly or daily. Likewise most donor countries and bodies, apart from the United States of America, do not link the continuation of support to particular political positions, as happened last September when the American Congress halted its support for the Palestinian National Authority in protest at President Mahmoud Abbas's step of going to the United Nations to request full membership for Palestine in the United Nations. How can the financial crisis that erupts from time to time be explained in light of the countries' annual pledges to support the National Authority?

– According to what many figures of the National Authority have stated, the crisis occurred because some Arab countries withheld what they had pledged … Can you clarify which countries these are!! and why they have not honoured their pledges!! and whether there are political conditions hidden behind those positions!!

Fifth: with regard to the National Authority's resources:

– Tax clearance with Israel accounts for 66% of the National Authority's public revenues, with a total of 1.5 billion dollars, as the general budget speech of the Authority for 2012 says. Therefore the net clearance with Israel, added to the other tax revenues estimated at about a billion dollars, is enough, even in the most difficult circumstances and in the event that external support stops, to pay two-thirds of the salaries of its employees.

– How many embassies and representative offices does the Authority have abroad, how many employees do they have, what is the size of the budgets allocated to them, and what is the benefit of that expenditure in light of the modest external diplomatic performance of the National Authority? It would be very useful if reference were made to the number of ambassadors and new employees in these missions who have been employed from the residents of the Gaza Strip governorates, and the method of appointment!!

With regard to the Palestine Investment Fund

– Where is the Palestine Investment Fund in contributing to solving the crisis!! The Palestine Investment Fund is the portfolio of the Palestinian people and is the supervisor of the management of its investments at home and abroad, and the late President Abu Ammar was far-sighted in diversifying investment domestically and abroad so as to avoid submission and subservience to the donor countries. Why does the Fund not contribute to confronting the crisis that threatens the survival of the Authority and its political project and causes severe confusion in the Palestinian street … The Palestine Investment Fund previously lent to the National Authority in 2005 and 2006. Why does the Fund not lend to / assist the National Authority amid its severe crisis, instead of inflating the wealth of individuals and monopolistic companies that benefit greatly from the Fund's investments! And what is the use of this white fund if it is of no use on the black day.

Mr Minister:: You have inherited a heavy legacy.. not easy to carry.. It is our right to know the truth.. Therefore it is your duty towards us and towards yourself to present to us the financial reality in detail, even if it is very painful..

And the discussion has more to come

10 July 2012