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Financial Crisis in Palestinian Government Deepens, Expert Warns of Dire Consequences

Posted On: 14-05-2024 | National News , Economy
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Ramallah/PNN/ Palestinian economic expert Dr. Haitham Draghma stated that the current financial crisis of the Palestinian government is an artificially created crisis with American industry and Arab hands.

Dr. Draghma said in Interview with Palestine News Network (PNN) correspondent in Ramallah that the current financial crisis has been ongoing since the 18th government took office, and then the siege on the authority began to blackmail political positions.

He added that the occupation and behind it the United States do not want to give the families of martyrs and prisoners their dues as part of the scene, while negotiations in this file, from America's point of view and the occupying state, seek to achieve results according to their desires, and here the financial blockade has become inevitable, with the participation of Arab countries as well, where aid from Gulf Arab countries stopped by Washington, in addition to the cessation of American aid since the era of President Donald Trump.

There is no magic wand to solve the escalating financial crisis that is affecting the Palestinian territories, as it is not a new crisis but rather part of the financial siege imposed on the authority. If it continues in this way, it will explode into situations that may lead to a state of security chaos and perhaps an uprising.

Dr. Draghma explained that this is part of the reasons for the crisis, but the most important thing is that the authority and those responsible for managing public finances, as well as those in decision-making positions in the Ministry of Finance, have kept the Palestinian economy tied to external aid and linked salaries to deductions, making the Palestinian economy weak, in light of the occupation's efforts to keep its footprint in shaping Palestinian foreign policy indirectly. Reports have indicated corruption in authority institutions on more than one occasion, and there are foreign institutions that have come up with unrealistic results regarding corruption. Not to mention that the Palestinian division has deepened the financial crisis, as the Gaza Strip remained completely isolated in terms of revenues, while the authority continued its commitments towards Gaza. Everything Hamas receives in the sector goes to it and nothing reaches the authority's treasury, creating a difficult situation, which has exacerbated the crisis, in addition to all the damages incurred during the global COVID-19 pandemic, where the State of Palestine was one of the most affected countries after all Palestinian economic sectors stopped.

Dr. Draghma emphasized that the financial crisis has been consecutive since the government of Dr. Mohammed Ishtayeh and before it, and this financial siege is an American and Israeli product and their allies. There is no solution on the horizon, and no one can say when the crisis will be resolved.

When addressing the international community within its efforts to resolve the crisis, including America, the Gulf countries, and other Arab countries, the demand was for a technocratic Palestinian government that respects transparency. Efforts have been made in this direction, and a government led by Dr. Mohammed Mustafa has been formed, but they did not commit to providing financial support. We also did not commit to some demands insisted upon by some Arab countries, including general elections, which gave reasons for Americans and their allies not to pay any money to the new government.

If the current financial crisis continues, which affects everything, and with the fact that our sole sovereignty as an authority is now to provide and commit to salaries, and in case that becomes impossible, the consequences will be catastrophic. We are witnessing a reduction in the working hours of public sector employees, which affects the provision of services to citizens.

Dr. Draghma warned that the inability of the government to meet its obligations towards employees and the security establishment may lead matters to a security collapse with dire consequences. This should be dealt with more seriously in Palestine and by the international community as well.

The Palestinian diplomacy should intensify its efforts to lift the financial blockade because any security collapse may not be isolated from the Israeli state and may reach internally. Recently, Israeli reports have suggested that this crisis may escalate the situation to reach a state of uprising, and an unethical situation in the Palestinian territories with the spread of crime and other destructive phenomena.

Dr. Draghma believes that there is no magic wand to solve the financial crisis now, but what is beneficial is to take steps that would make us acceptable internationally. Since 2006, there have been no elections in Palestine, amidst international calls to inject new blood and to respect transparency.

We always raise slogans only. The current government promised financial stability to stop the waste of money. It raised its ceiling, and the citizen is waiting. It worked on withdrawing movement vehicles from a number of official institutions, while promotions are still ongoing. We need to control expenses and reduce the phenomenon of draining public money.

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