Palestinian Workers Left Broke After Israel Suspends Millions of Dollars in Tax Revenues as Punishment for Joining the International Criminal Court

Palestinian workers left broke as Israel freezes funds

January 21, 2015

AFP - Palestinian head teacher Abdelhakim Abu Jamus has just given his last shekels to his daughter for school and has nothing left to feed his family of eight.

Like tens of thousands of Palestinian public sector workers, he has not been paid since December after Israel suspended millions of dollars in tax revenues which should have been transferred to the Palestinian Authority, as punishment for joining the International Criminal Court.

"I gave my daughter the last money I had and now I don't know how we're going to manage tomorrow," said Abu Jamus who runs a school in the West Bank city of Ramallah.

On January 2, the Palestinians formally presented a request to join the Hague-based ICC in a first step towards suing Israel for war crimes.


Israel reacted furiously, freezing $127 million (110 million euros) in tax revenues that are usually transferred to the Palestinian Authority (PA) -- a move often employed as a punitive measure during diplomatic disputes.

Under an economic agreement between the sides signed in 1994, Israel transfers to the PA tens of millions of dollars each month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports.

Although the sanction has been imposed many times, it has rarely lasted more than one or two months, except in 2006 when Hamas won a landslide victory in Palestinian legislative elections.

On that occasion Israel froze the funds for six months.

Blocking the money deprives the PA of more than two-thirds of its monthly budget, excluding foreign aid, and prevents it paying its roughly 180,000 employees, which costs almost $200 million (170 million euros) a month.

- Quick solution needed -

"We know very well that Israel freezes the money for political reasons to put pressure on the Authority, but as civil servants we need to see the situation resolved quickly," Abu Jamus said.

Dalal Yassin, who works for Palestinian television, also has not been paid since Israel froze the transfers.
But she is in a better position than most because her husband works in the private sector.

"I see my colleagues struggling to pay their monthly bills and going through a really difficult time," she told AFP.

The Palestinian government has managed to raise enough funds to start paying 60 percent of the December salaries "through loans, Arab aid and its own resources".

Yasser Mussa, who runs a shop in Ramallah, is hoping that the partial payment of salaries will mean some of his customers pay off their outstanding debts.

"Every month, we extend credit to our clients, but this time, the salaries have not been paid at the same time as a major storm hit the region and we have had to sell many products on credit," he said.

Ahead of a major winter storm earlier this month, many Palestinians went out and bought heaters to combat a cold snap which has only just begun to ease.

Arab foreign ministers have promised to provide the Palestinians with a monthly "safety net" of $100 million (86 million euros), but the commitment has rarely been activated.

The funds could offer vital assistance for the PA, economist Nasser Abdelkarim said.

"Since the second intifada (the Palestinian uprising in 2000-2005), the economy has experience a major downturn," he said, with about 140,000 Palestinians who previously worked inside Israel losing their jobs.

In order to counter the soaring unemployment rate, the Palestinian public sector enlarged its ranks -- and with it, its monthly spending on salaries.

But the Palestinian government is facing an even bigger employee-related problem than the salary freeze.

In 2007, when Hamas seized power in Gaza, forcing out forces loyal to the Fatah movement of Palestinian president Mahmud Abbas, roughly 70,000 government employees were left jobless.

Hamas then took on 50,000 new workers who have served the Gaza administration for the past seven years.

Since a national unity government took office in June, ending seven years of separate administrations in the West Bank and Gaza, the Hamas employees have not been paid.

News that the consensus government plans to rehire the 70,000 staff who were employed before 2007, in place of the Hamas workers, has sparked a series of angry protests and strikes.

The dispute threatens a fragile reconciliation deal between Fatah and Hamas which took effect last April and led to the establishment of the unity government. 

Related:

1. Israel freezing tax payment to Palestinians over ICC bid AFP
2. Israel 'mulls war crimes suits against top Palestinians' AFP
3. Palestinian unity frays, hurting Gaza's rebuilding and statehood aims Reuters
4. Israel eyes tougher moves after Palestinian tax freeze AFP
5. Israel threatens more punitive steps against Palestinians Associated Press