What does the Palestinian government's declaration of a state of emergency mean?

Palestinian Prime Minister Mohammad Shtayyeh confirmed PA's refusal to receive clearance funds from Israel (Palestinian Prime Minister's Office)

RAMALLAH – The Palestinian government announced on Monday that the Department of Public Affairs is "in a state of emergency" and thus manages the available financial resources and the preparation of the budget and activities during 2024 in accordance with that situation.

"As much money as available," the government said it was committed to fulfilling its obligations to employees in the West Bank, Gaza Strip and Jerusalem "as well as to prisoners and families of martyrs."

In its statement, the government did not declare a "state of emergency" as is customary, but a state of emergency touch and a little less, which allows it to manage the available money, according to specialists for Al Jazeera Net.

In his speech at the start of the cabinet meeting, Prime Minister Mohammad Shtayyeh said that last December Israel deducted 517 million shekels (about $140 million) from the NIS 750 million (about $200 million) clearance funds, "and sent the rest to us, so we refused to receive it."

Press Coverage | The Palestinian government: "We have decided to manage public affairs as being in a state of emergency, and to prepare government budgets and activities for the year 2024 in accordance with these circumstances, and to ensure the continuation of the provision of government services to citizens." pic.twitter.com/LwYUiuRQcX

— Quds News Network (@qudsn) January 8, 2024

Prisoners and martyrs are a red line

The Palestinian Authority refuses to receive the clearance for the second time since the start of the Israeli aggression on Gaza on October 7, and it concerns tax revenues collected by Israel on goods imported into the PA territory, which it is supposed to transfer monthly.

The Minister of Communications in the Palestinian government, Dr. Ishaq Sidr, says to Al Jazeera Net, that the occupied territories are going through difficult conditions, so the government's decision came.

The government official added that "the country is going through emergency conditions as a result of an abnormal financial blockade on the Palestinian Authority and the Palestinian people with the aim of bringing the people and the leadership to their knees, and creating an atmosphere that weakens the Palestinian Authority in a way that does not enable it to carry out its duty towards our people."

The same spokesman pointed to the decline in the resources of the Palestinian Authority to about 20% since the start of the aggression on Gaza, stressing that "the entitlements of the families of martyrs and prisoners are a red line, and the second red line is Gaza and its salaries and there is no discussion about them."

Dr. Nasr Abdel Karim, an economist and lecturer at Arab American University, said, "It is less than declaring a state of emergency because the president is authorized to declare it on the one hand, and on the other hand, the same rules governing the organization or approval of the general budget are not adhered to."

He added that the declaration of the situation comes in view of the difficulty of having logical, certain or almost reasonable estimates of the Authority's revenues and expenditures, especially revenues, at a time when the clearance crisis is stagnating and there is no aid coming with certainty, and collection is not guaranteed.

The Palestinian Council of Ministers, headed by Mohammad Shtayyeh, declared the Department of Public Affairs in a state of emergency (Palestinian Prime Minister's Office)

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In the opinion of the Palestinian expert, the government should have added to its announcement to define its spending priorities – as in previous cases – such as employee salaries, Gaza relief and the poor sector, and develop plans to rationalize expenditures and austerity and show people aspects of savings, spending and expenditures.

Abdul Karim added that the Palestinian government wanted to send a message that it is living in a crisis that has no prospect of being resolved, and therefore will try to work with the available money.

In numbers, the economist says that the resources available today are only local collection based on customs and value-added tax, and these have declined due to the decline in consumption by about 40%, according to the latest estimates.

"About NIS 250 million (about $67 million) is collected per month instead of about NIS 450 to NIS 500 million ($120-$135 million) before the war, so that's what is available."

As for the clearing, Abdul Karim said that it was estimated at 750 million shekels before the aggression, and about 200 million shekels were deducted from this amount per month under various pretexts, and it was transferred incomplete to the Palestinian Authority.

Overall, the economist estimates that the revenues of the local government in the current circumstance do not exceed 20% of what was the situation before the war, adding that "foreign aid is not guaranteed while Israel is still intransigent in the issue of clearance."

The Palestinian expert said that the PA "bought time when it borrowed $ 450 million from banks to postpone the explosion of the crisis for about a month or 1.5 months, but the situation will become much more difficult if the crisis continues until the end of this month, and the government will find itself in a very difficult predicament."

Most affected groups

According to Dr. Tayseer Amr, former undersecretary of the Palestinian Ministry of Economy, the sectors of social affairs, health and education will be the most affected by the declared situation.

He added, in an interview with Al Jazeera Net, that among those affected is also the private sector, as the government will not be able to meet its obligations to this sector, which suffers as a result of large debts accumulated on the government, "and therefore the government will stop paying its debt, which was originally paid in small proportions."

The same spokesman explained that the impact will affect the rest of the economic activities, including companies that supply the needs of the government, including pharmaceutical companies, contracting companies and others.

As for the extent to which the PA can afford in light of this situation, Amr said, "The PA will remain there because there is an interest for everyone to remain in it, and the Americans are interested in Israel releasing the clearance funds."

The Undersecretary of the Ministry of Economy concluded by asking about "how can the parties that talk about strengthening the authority as the best option to participate in the administration of Gaza, accept to be plunged into a financial crisis?!"

Source : Al Jazeera